Tank Storage Magazine June/July by Tank Storage Magazine

June / July 2020 | Volume 16 | Issue 03

FLOATING STORAGE: THE NEW NORMAL?

THE AWARD WINNERS

TANK SHORTAGE 2020

Latest analysis on the rapid expansion of global floating storage and changes to trade flows in the wake of the COVID-19 pandemic

Read why these companies are leading the way in safety, innovation & sustainability

With dramatic demand drops amid worldwide COVID-19 quarantines, we take a closer look at the impact itâ&#x20AC;&#x2122;s having on the US market

Established 2005. Trusted. Valued. Influential.

> BUILDING WITH INTEGRITY. > BUILDING WITH INTEGRITY.

The safety and well-being of our employees, clients and communities are always at the The safetyofand well-being forefront everything we of do.our employees, clients and communities are always at the We are the industrial strength solution. forefront of everything we do. We are the industrial strength solution.

UP FRONT CONTENTS

CONTENTS June/July 2020 | Volume 16 | Issue 03 UP FRONT 04 Contributors

06 Comment

TERMINAL NEWS 08 Europe 13 The Americas 16 Asia 19 Africa & the Middle East 22 Incident report

PROFILE 23 Moda Midstream: flexibility is the key to growth

MARKET ANALYSIS 26 Tank Shortage 2020 28 Floating storage: the new normal?

30 COVID -19 and the oil markets 32 The bright light amidst todayâ&#x20AC;&#x2122;s energy uncertainty

TANK STORAGE AWARDS 34 The winners of 2020

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UP FRONT CONTENTS

TECHNICAL FEATURES

43 Safety as standard, no matter the scenario 47 Technical news 52 COVID-19: cyber security lessons learnt 54 External hazard effects on steel and RLG tanks 58 Hurricane Preparedness plans for storage terminals 60 Tank bottom life, risk-based inspection and corrosion 63 Managing your aluminium dome asset 65 Integrating design, safety and construction 68 Microbial contamination in biodiesel storage tanks

EVENTS

70 iTanks Innovation zone review 73 Latest industry events

AT THE BACK 72 Advertisersâ&#x20AC;&#x2122; index 72 Social storage: Most viewed posts this month

PAGE 02

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

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UP FRONT CONTRIBUTORS

CONTRIBUTORS June/July 2020 | Volume 16 | Issue 03

PUBLISHER

SUBSCRIPTION RATES

Margaret Dunn +44 (0)20 3551 5721 margaret@tankstoragemag.com

A one-year, 7-issue subscription costs €210. Individual back issues can be purchased at a cost of €45 each.

INTERNATIONAL SALES MANAGER

CONNECT WITH US

David Kelly +44 (0)20 3196 4401 david@tankstoragemag.com

@tankstorageinfo

Tank Storage Magazine

DATABASE MANAGER

Tank Storage Magazine

Alison Church +44 (0)20 3196 4305 alison.church@easyfairs.com

CONTACT

MARKETING MANAGER Lisa Mattes +44 (0)20 3196 4394 lisa.mattes@easyfairs.com SENIOR SALES EXECUTIVE Baron Bray-Sackey +44 (0)20 3196 4387 baron.braysackey@easyfairs.com CEO EASYFAIRS UK & GLOBAL

June / July 2020 | Volume 16 | Issue 03

FLOATING STORAGE: THE NEW NORMAL?

THE AWARD WINNERS

TANK SHORTAGE 2020

Latest analysis on the rapid expansion of global floating storage and changes to trade flows in the wake of the COVID-19 pandemic

Read why these companies are leading the way in safety, innovation & sustainability

With dramatic demand drops amid worldwide COVID-19 quarantines, we take a closer look at the impact it’s having on the US market

T +44 (0)20 3196 4300 F +44 (0) 20 8892 1929 margaret@tankstoragemag.com www.tankstoragemag.com Easyfairs 2nd Floor, Regal House 70 London Road Twickenham TW1 3QS United Kingdom

Established 2005. Trusted. Valued. Influential.

Front Cover Courtesy: CST

ISSN 1750-841X

Matt Benyon +44 (0)20 3196 4310 matt.benyon@easyfairs.com model in sub-saharan africa. introducing the independent storage Oiltanking matola explains how it is

as it explores gas storage. is ensuring greater energy security The sharjah national oil corporation

model in sub-saharan africa. introducing the independent storage Oiltanking matola explains how it is

IN A CAPTIVE MARKET AN INTERNATIONAL CONCEPT

NEW GAS CHAPTER SPEARHEADING THE UAE’S

IN A CAPTIVE MARKET AN INTERNATIONAL CONCEPT

Aug / Sep 2019 | Volume 15 | Issue 04

Tank Storage Magazine, (ISSN 1750-841X) is published seven times a year (in February, March, May, August, September, October and November) by Easyfairs UK Ltd, 2nd Floor, Regal House, 70 London Road, Twickenham, TW1 3QS, UK. The US annual subscription price is $243. Airfreight and mailing in the USA by agent named WN Shipping USA, 156-15, 146th Avenue, 2nd Floor, Jamaica, NY 11434, USA. Periodicals postage paid at Jamaica NY 11431. US Postmaster: Send address changes to Tank Storage Magazine, WN Shipping USA, 156-15, 146th Avenue, 2nd Floor, Jamaica, NY 11434, USA. Subscription records are maintained at Easyfairs UK Ltd, 2nd Floor, Regal House, 70 London Road, Twickenham, TW1 3QS, UK.

PAGE 04

UP FRONT COMMENT

A YEAR WE’LL NEVER FORGET IT STILL seems inconceivable that just a few weeks ago in April, crude oil was worth less than toilet paper. When the price of oil turned negative for the first time in history it sent shockwaves across the world. Suddenly everyone was talking about tank storage, or the lack of it. The price of oil had been steadily falling since coronavirus first broke out in China at the end of 2019. The combination of major economies shutting down and travel routes grinding to a halt led to a catastrophic imbalance between oversupplied oil and the biggest slump in demand for 25 years. All this has led to a super-contango, which terminal operators have been awaiting for years, but it’s safe to say nobody expected this. So, what does all this mean for the storage sector? With major terminal operators such as Vopak announcing that its tankage is almost full, the industry has reacted quickly and come up with ingenious storage options, even to the extent of closing off pipelines for extra capacity. Within this edition Michael Mashburn Director of Liquid Operations for Colonial Terminal discusses the safety implications of using rail cars for storage and analysts at Vortexa explore whether floating storage will become the new normal. Life has turned on its head in 2020 and no one is quite sure how long it will last. Major industry events such as the ILTA in Houston, EPCA’s annual meeting and the

PAGE 06

Tank Storage Association conference in the UK have been postponed or moved online. Over the next few months Tank Storage Magazine will do our best to keep the storage terminal sector connected. Launched earlier this year, our brandnew website continues to be updated every day and website traffic has significantly increased. The industry is changing faster than ever, so we’re here to keep you updated. If you haven’t already, please sign up to our weekly newsletter at www.tankstoragemag.com to get the latest updates sent straight to your inbox. I hope you enjoy this edition of Tank Storage Magazine. I must admit putting it together with two young children at home ‘helping’ has certainly been a challenge! I hope you and your families stay healthy and happy and I hope to see you all again in the not too distant future, With very best wishes,

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TERMINAL NEWS EUROPE

TERMINAL NEWS: EUROPE The Netherlands

NESTE ACQUIRES COUNT TERMINAL ROTTERDAM Neste, the world’s leading producer of renewable diesel and sustainable aviation fuel produced from waste and residue raw materials, has acquired 100% of the Dutch Count Companies BV’s Count Terminal Rotterdam BV and its supporting entities, part of the First Dutch Group of Peter Goedvolk. The transaction was closed on 7 May 2020. Count Terminal Rotterdam stores, refines and blends renewable waste and residue-based raw materials in the Rotterdam harbour area. Count Terminal Rotterdam will be the first terminal asset Neste owns for renewable feedstock aggregation, thus enabling Neste to further develop its raw material logistics

for the future. The transaction will also enhance Neste’s competitiveness in the global renewable waste and residue raw material market. Neste has been active in the Netherlands since 2011 when the Rotterdam refinery for renewable products started its operations. The Rotterdam refinery, together with the company’s Singapore refinery, are the world’s largest renewable diesel refineries.

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PAGE 8

Neste’s Sluiskil plant is responsible for the storage and pre-treatment of renewable raw materials, and Neste Demeter B.V. delivers raw materials to the company’s renewable diesel refinery. Last year Neste opened a new office in Hoofddorp, in greater Amsterdam which serves as the global hub for the growing Renewable Aviation business.

TERMINAL NEWS EUROPE

The Netherlands

HES HARTEL COMPLETES PIPELINE CONNECTING TO BP REFINERY HES Hartel Tank Terminal, a project of HES International, has completed a project to connect underground pipelines with the nearby refinery of energy major BP. HES Hartel Tank Terminal, a project of HES International, has completed a project to connect underground pipelines with the nearby refinery of energy major BP. Visser & Smit Hanab, a 100% subsidiary of VolkerWessels, officially handed over the subsea pipelines to HES on 16th April. The completion of this part of the project represents another step forward in the development of the state of the art 1.3 million m3 liquid bulk storage terminal. The installation of these high-tech subsea pipelines must be done with absolute precision. The total package of pipelines installed, consist of 1 steel pipeline of 24 inches (600mm), 4 of 16 inches (400mm) and an HDPE pipe of 315 mm all with a length of around 1,000 metres.

The pipelines were installed by means of Horizontal Directional Drilling (HDD). Visser & Smit Hanab have also installed pipelines in the pipeline corridor and the created manifolds. Director of Visser & Smit Hanab, Aldo Krijgsman says: ‘The HDD that have been executed were complex and challenging, nevertheless they have been installed in a safe and controlled manner. The cooperation between Visser & Smit Hanab and HES Hartel Tank Terminal on an engineering, operational and safety basis has been excellent.’ Project Director of HES Hartel Tank Terminal, Charles Smissaert says: ‘Due to the constructive and professional cooperation with the team of Visser & Smit Hanab, the subsea pipelines were handed over to HES within budget and on time. Moreover, the work is executed without any incidents and we attach great value to that. Safety is crucial for the success of this terminal and our future business.’

Port of Rotterdam Authority completed works on the maritime facilities at the end of 2019. Complying with the COVID-19 measures, construction works on tanks and the related civil and piping works are currently continuing unabated. HES Hartel Tank Terminal will be the first terminal in the Netherlands that will be built according to the latest PGS 29 regulations for tank storage, meaning that the terminal will meet very high safety and environmental standards. After commissioning the terminal will be operational 24/7 and it will provide jobs for approximately 80 people.

In addition to transport by pipeline, loading and discharge will predominantly take place by vessels and barges. In recent months significant progress has been made in the development of the 1.3 million m3 tank terminal for the storage and transhipment of petroleum products and biofuels in the Port of Rotterdam. The

PAGE 9

TERMINAL NEWS EUROPE

Belgium

TEMPORARY LEGISLATION CHANGES GRANTED TO FETSA MEMBER STATES COVID 19 presents some unusual issues that need both national and EU level solutions. The Federation of European Tank Storage Associations (FETSA) has been working in Brussels and with its national associations in national capitals to ensure legislation is amended to take these into account. FETSA has had major concerns with the planned changeover from winter to summer grade gasoline in light of significantly falling fuel demand due to COVID 19 movement/ transport restrictions. This has had the impact that there are substantial excess levels of winter grade fuels that need to be sold by, or in, May (precise date can vary per Member State). Under normal circumstances, vapour pressures would now start to be changed in order to ensure that fuel can be blended into a summer grade fuel. Under the current circumstances of

full capacity of winter grade fuel and a crash in demand, storage terminals have experienced a lack of physical or technical means (due to a lack of ullage) to import new fuel products in order to blend the winter fuel grade into a summer grade. This had the potential consequence that storage terminals across the EU currently will struggle to be able to supply the fuel supply chain, notably petrol stations with summer grade fuel unless EU legislation on fuel quality changes temporarily. Because of the crash in winter fuel usage, even if ‘lockdowns’ were to end soon, there would still be insufficient capacity to stock or blend summer fuels in the coming months. Without legislative action, this would shut down fuel distribution across the EU until winter fuel can be used again. THE SOLUTION To ensure fuel supply chains continue to function, FETSA requested that the European Commission grants a temporary derogation from the need to supply summer grade fuel, lasting for at least two months. This may be required to be extended further depending upon the future situation. This means creating a two month, renewable derogation from the

obligation to supply summer fuel grades contained in the Fuel Quality Directive. This issue is a result of an over 70% reduction of fuel consumption due to a completely unforeseeable ‘pandemic’ event leading to unprecedented government enforced ‘lockdowns’. The European Commission agreed with FETSA’a proposal and has said that temporarily, the winter/summer fuel changeover can be delayed by Member States. This has given the supply chains the flexibility they need to adapt to reduce winter fuel stocks in a commercially sensible way. This lobby success shows the value that can be achieved when companies, national and European trade associations in our sector work closely together to achieve concrete and commercially relevant objectives. For more information: This article is written by Ravi Bhatiani, Executive Director of FETSA, the Federation of Tank Storage Associations. FETSA represents the bulk liquid storage sector in Europe. Bulk liquid and liquified gas terminals are present in ports, airports, logistic platforms and along rivers, canals and pipelines. In total FETSA represents over 140 companies operating 692 terminals across Europe. Find out more at: www.fetsa.eu

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TERMINAL NEWS EUROPE

France

RUBIS & I SQUARED CAPITAL FINALISE TERMINAL DEAL Rubis, a Paris-based terminal operator and I Squared Capital, a leading global infrastructure investor, finalised their partnership in Rubis Terminal that was announced in January. According to this agreement, Rubis and I Squared Capital will jointly control Rubis Terminal, holding respectively 55%and 45% of the company’s shares. With a portfolio of 13 facilities and a capacity of 3.6 million m3 across four countries (France, Belgium, The Netherlands and Turkey), Rubis Terminal provides critical bulk liquid storage infrastructure to a diversified base of industrial customers and across a broad range of petroleum, chemical and agrifood products. The joint venture will accelerate Rubis Terminal’s strategic plan to strengthen its position within its current footprint, diversify its product offerings and explore potential expansion outside Europe. The transaction has been secured through a €410 million refinancing facility provided by a bank consortium formed by J.P. Morgan, Crédit Agricole CIB and Société Générale. It also includes a Revolving credit facility of €75 million to secure Rubis Terminal’s future organic development. Société Générale has acted as Rubis’ advisor to set up the partnership with I Squared Capital. ‘I Squared Capital has developed 17 infrastructure platforms in the last few years and will use the same approach of operational optimisation, bolt-on acquisitions and select greenfield projects to develop in partnership with Rubis, a leading global storage company,’ says Sadek Wahba, Chairman & Managing Partner of I Squared Capital and a board member of Rubis Terminal. ‘Since we entered into exclusivity in December, the Covid-19 crisis has further demonstrated the critical role storage assets play in the global supply chain. With occupancy levels at nearly 100% following a surge in global demand for storage capacity, this investment further contributes to our strategy of portfolio diversification.’

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TERMINAL NEWS EUROPE

The Netherlands

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VOPAK TANKS ALMOST FULL & ALL TERMINALS OPERATIONAL The world’s largest terminal operator Vopak has said its oil tanks are almost full as the Dutch company benefits from a drop in demand and prices for crude which has left producers and traders desperate to find storage. The oil and chemical storage company said on 21st April that it expected to feel the full benefit in Q2, as it reported a small rise in adjusted core earnings for the first three months of 2020.

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In Q1 2020, the company posted a net profit of €83 million, the same result as in Q1 2019. EBITDA was €200 million versus €215 million in the same quarter last year, which was prior to the divestment of Vopak terminals in Algeciras, Amsterdam and Hamburg.

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The company noted an occupancy rate for subsidiaries of 84% in Q1, slightly down from the 81% registered in Q1 2019. According to Vopak, this figure reflected high levels of planned inspection and maintenance out-of-service capacity, mainly focused in Rotterdam and Singapore. Vopak plans to get this capacity back online as quickly as possible. US oil futures collapsed below $0 per barrel on 20th April for the first time in history, with traders effectively paying buyers to take crude off them as they struggle to find places to store a huge surplus that has built up during lockdowns across the world to tackle the coronavirus pandemic.

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Vopak’s available capacity in oil storage is full, with the exception of tanks undergoing maintenace and a new fuel facility in Panama that is filling up quickly.

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The company, which operates tank terminals around the world, said it had seen limited impact on its own operations from the coronavirus outbreak so far, with all its 66 terminals operational, though that could change in the future. The company said the pandemic posed challenges, such as causing potential delays to projects, and added a long-term recession would also be a risk.

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TERMINAL NEWS THE AMERICAS

TERMINAL NEWS: THE AMERICAS

ENERGY TRANSFER ASKS FOR PERMISSION TO TURN PIPELINES TO OIL STORAGE Pipeline giant Energy Transfer will be asking the Texas Railroad Commission to allow it to idle two pipelines in Texas and turn them into storage for around 2 million barrels of oil, the company has told Argus Media. US oil producers are struggling amid collapsing demand and oil prices while inventories across America are growing. Producers in Texas struggle to place their barrels with the US Gulf Coast refineries, which are cutting crude processing rates in response to plunging fuel demand. The massive demand drop in the US and overseas due to lockdowns in the COVID-19 pandemic has had US oil producers scrambling to find storage for their produced barrels when no one wants more oil right now.

But many analysts think that available storage in Cushing will fill up by the middle of May, or the end of May, at the latest, if demand doesn’t materially pick up by then. This is an unlikely scenario, considering the lockdowns and work from home policies in many states.

pipelines for storage is approved, ‘After that it will be a matter of adding pumps to the lines, which we can easily achieve,’ Energy Transfer told Argus. ‘We estimate we can be ready by midMay,’ a spokeswoman for the company told Bloomberg.

If Energy Transfer’s plan to idle two Texas

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Earlier this month, Enterprise Products Partners asked to open the northbound capacity of its Seaway pipeline, offering US oil producers struggling to place their oil near the Gulf Coast to ship their barrels to the primary storage hub at Cushing, Oklahoma. ‘Given the current turmoil in the crude oil market, including impacts on both refinery and export demand, there is strong market interest to access the Cushing storage market,’ the pipeline operator said in a filing with the U.S. Federal Energy Regulatory Commission (FERC), as carried by Reuters.

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PAGE 13

TERMINAL NEWS THE AMERICAS

TERMINAL NEWS XXXXXXXXX

PHILLIPS 66 GRANTS SHIPPERS PERMISSION TO STORE CRUDE IN PIPELINE NETWORK Energy company Phillips 66 Partners LP says it will allow shippers to store crude on its Gray Oak pipeline network in Texas, giving respite to companies desperately searching for storage space. The COVID-19 pandemic, combined with an oil price war between Saudi Arabia and Russia, has brought an oversupply of fuel around the world and the United States is increasingly struggling to find storage solutions for the glut of excess crude. On Friday, a Phillips 66 spokesperson said in a statement: ‘In response to shipper demand, Gray Oak Pipeline is modifying its rules and regulations to accommodate on-system crude storage. Current events have significantly impacted demand for West Texas Crude oil, resulting in an urgent need for crude oil storage.’ The announcement by the company will free up one million barrels of extra storage, to be used by shippers carrying West Texas Immediate and West Texas Light oil.

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It is thought the storage will be made available within the pipeline’s injection or origin points, throughout the network’s storage tank facilities. The Gray Oak Pipeline is one of the largest new pipelines in the country, transporting crude from the US’s Permian Basin to delivery locations in and around the Houston Ship Channel. It currently shifts about 900,000 barrels a day. Late last month Greg Garland, chairman and CEO of Phillips 66, said that although it was significantly reducing its capital spending due to ‘these times of uncertainty’, it was ‘well positioned to manage through the challenging environment’ with its ‘high-quality, diversified asset base and strong balance sheet’.

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PAGE 15

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TERMINAL NEWS ASIA

TERMINAL NEWS: ASIA And true to form, Hin Leong did rise from obscure beginnings to become a trusted name in the oil and bunker trade.

Singapore

HOW HIN LEONG ‘BET ON THE WRONG HORSE’ Hin Leong, the Singapore-based oil trading giant founded in 1963, has sought bankruptcy protection as a lastditch effort to stave off insolvency and the liquidation of all its assets. Those assets include the veritable Universal Oil Terminal and a fleet of vessels under the name of Ocean Tankers. There is no doubt that Universal Terminal is in its own league. It has the largest oil storage facility in Singapore, and is also one of the world’s largest with 2.40 million m3 of storage capacity. It has more than 75 tanks in 12 tank farms. And Ocean Tankers too is a titan in its own right, chartering or operating one of the largest fleet of tanker fleets of up to 150 vessels from VLCCs to coastal barges. In China, Hin Leong means ‘prosperity’.

So what went wrong? In a court affidavit, Founder Lim Oon Kuin attributed the collapse in global oil prices triggered by the COVID-19 outbreak and a ruthless price war among oil majors. A lack of hedging policies was also singled out as a factor. However, according to a source speaking to Tank Storage on condition of anonymity, hedging was what caused the dismal state of affairs inferring that they ‘bet on the wrong horse.’ To add to its troubles, the price of brent crude had slipped to prices unseen in modern times before settling for $29 in early May 2020. The oil trader is now facing a $3 billion debt; a figure hugely astronomical by Singapore standards. Not making it any better is a news report from Singapore’s Channel News Asia (CAN), which cited an affidavit signed by

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its founder of how the company suffered about $800 million in futures losses over the years but [that] these were not reflected in the financial statements. ‘In this regard, I had given instructions to the finance department to prepare the accounts without showing the losses and told them that I would be responsible if anything went wrong,’ Lim had said, adding that the company ‘has not been making profits in the last few years’ despite its financial statements for the 2019 fiscal year reporting a net profit of $78 million. As to be expected, the near and impending collapse of Hin Leong sent shock waves throughout the industry. Since the collapse in oil prices, banks throughout the world have been weary of lending to oil majors, for fear they might default on payments. Banks were already pulling back from financing oil and gas trades after the oil price crash, with credit shortages due to the coronavirus outbreak hitting the commodity business more widely than expected. And now Hin Leong symbolises what banks have always feared. Reportedly, a total of 10 Singapore banks are just waiting to pounce on the oil major and some banks won’t issue new letters of credit to the trader because of concerns over its ability to repay short-term debts. So where does Hin Leong go from here? If anything, it will opt for the judicial management of its assets, in which case it will be shielded from third-party legal proceedings, and with a manager to oversee its business dealings. Yet the larger fallout is perhaps a tightening of the nation’s regulatory framework happening as this did, on the back of yet another scandal, the Noble Group.

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PAGE 16

‘Hin Leong [now] joins a rather long list of big names that have bitten the dust due to big bets on commodity prices that went wrong,’ said, Vandana Hari, founder of oil analysis outfit Vanda Insights. ‘Some started with a small loss and just dug themselves into a bigger hole.’

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TERMINAL NEWS ASIA

Singapore

SINGAPORE REPORTS HIGH COMPLIANCE WITH IMO 2020 IN Q1 2020 In Q1 2020, most ships calling at the Port of Singapore have complied with the International Maritime Organization’s (IMO) 2020 sulphur regulations since they came into effect on 1 January 2020, according to the MPA (Maritime and Port Authority of Singapore). Under MARPOL Annex VI Regulation 14.1, the sulphur content of any fuel oil used on board ships operating outside an emission control area shall not exceed 0.50% m/m from 1 January 2020. Likewise, the sulphur content of fuel oil used or carried for use on board a ship shall not exceed 0.50% m/m from 01 March 2020. Based on pre-arrival notification submitted to the MPA from January to March 2020, about 96% of the ships that arrived in the Port of Singapore used compliant fuel. This excludes ships installed with open-loop scrubbers that switch to using compliant fuel upon arriving in the Port of Singapore.

In the first quarter of 2020, MPA conducted a total of 326 Port State Control (PSC) and Flag State Control (FSC) inspections in the Port of Singapore. During these inspections, MPA found 12 ships, which were not fitted with scrubbers, using fuel that marginally exceeded the sulphur limit. This was likely due to remnant residues of high-sulphur fuel in the fuel oil tanks and piping. It is expected that in time, the fuel oil tanks and piping will be properly flushed with the continual use of compliant fuel. MPA had informed the respective managers and flag administrations of these ships about the non-compliance. Additionally, two foreign-registered ships were found to be using non-compliant fuel. They were each issued a PSC detention order, and were only allowed to depart from the Port of Singapore after it was verified that they had switched to using compliant fuel. In light of Singapore’s prohibition on the discharge of wash water from open-loop scrubbers, no ship installed with an openloop scrubber was found to be operating its scrubber in the Port of Singapore. During the first three months of 2020, there was no Singapore-registered ship detained by port state authorities for non-compliance with the IMO 2020

regulations. Two ships reported the non-availability of compliant fuel, and submitted the required Fuel Oil NonAvailability Report. Amongst the small number of Singaporeregistered ships installed with scrubbers, there were 31 reports of scrubber malfunction as at 29 February 2020. Goh Chung Hun, MPA’s Director of Marine, said, ‘As a leading maritime nation, Singapore is committed to reducing the environmental impact of shipping. By engaging the industry proactively, providing the necessary technical guidance and maintaining an adequate supply of compliant fuel in Singapore, we have ensured a high degree of compliance with IMO 2020 sulphur regulations. Singapore will continue to play its part to make shipping clean and sustainable.

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TERMINAL NEWS AFRICA & MIDDLE EAST

TERMINAL NEWS: AFRICA & MIDDLE EAST South Africa

OILTANKING MOGS SALDANHA TERMINAL OPENS IN CAPE TOWN, SOUTH AFRICA

The first phase of the terminal comprises nine tanks with a total storage capacity of 1.6 million m3 (9.9 million barrels) which will be brought into operation in phases, with the final phase expected to be completed in Q3 2020. Depending on the developments in the crude oil market, the terminal has

the potential to be expanded with three further tanks of 175,000 m3 (1.1 million barrels) each for which an investment decision still has to be taken. This possible expansion would bring the total capacity of the terminal to 2.1 million m3 (13.2 million barrels) of storage capacity.

The Oiltanking MOGS Saldanha terminal in Cape Town, South Africa, a joint venture between Oiltanking MOGS and Industrial Development Corporation of South Africa has taken receipt of approximately 143,000 m3 (900,000 barrels) of crude oil on April 17, 2020. The new crude oil terminal in the Port of Saldanha Bay is built as a state-of-the-art facility in accordance with the highest safety and environmental standards. The terminal will be equipped to blend crude oil and be connected to an existing jetty which can handle vessels up to VLCC (Very Large Crude Carrier) size.

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TERMINAL NEWS INCIDENT REPORT

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

12/4/2020

13/4/2020

ALASKA, US

INDIA

Alyeska Pipeline Service Company

Galaxy Surfactants

Alyeska Pipeline Service Company has removed 326 barrels of oily water at the Valdez Marine Terminal after a mix of water and oil leached under snow and into the water. The company, owned by Alaska’s major oil producers, created an incident management team to coordinate the spill response. Response activities included deployment of sorbents sweeps, sausage boom and containment boom. Alyeska recovered about 326 barrels, or 13,692 gallons, of oily water, the company reported. The cause is under investigation, but early indicators suggest that the crude/water mixture was leaking from a sump that overflowed.

Two workers were killed and three others injured in an explosion at a chemical plant in Maharashtra’s Palghar district, India. The company, Galaxy Surfactants, claimed there was no fire after the blast and added there were not more than 67 employees at the plant in the Tarapur MIDC area when the incident occurred. In a statement, Galaxy Surfactants said the blast took place in a small intermediate feed tank and its cause was being ascertained.

29/4/2020

7/4/2020

ACADIA PARISH, LOUISIANA, US

LONG VIEW, NORTH CAROLINA, US

Vernon Oil

OneH2

A lightning strike hit a tank battery that ignited two of the site’s four fiberglass tanks. The site was a “shut in” site, meaning all product was removed from the site with only residual materials remaining. The two tanks that caught fire were previously housing saltwater.

An explosion at a hydrogen fuel plant caused significant damage to surrounding buildings, although no injuries from the explosion were reported. Around 44 workers had been at the facility when the explosion happened at 08:00 local time. The company said that its hydrogen safety systems operated effectively and prevented any injuries at the plant. OneH2 goes on to say that during the event, there was no detonation of any onsite storage tanks.

PAGE 22

PROFILE MODA MIDSTREAM

FLEXIBILITY IS THE KEY TO GROWTH With the pressure on for more storage capacity around the world, Moda Midstream has space to expand. However, as its CEO Bo McCall reveals, growth plans must be flexible as well as prudent 01

LIQUID terminal provider Moda Midstream completed its 10 millionbarrel crude oil expansion in April, adding 495,000-barrels of tankage at its facility at Moda Ingleside Energy Center (MIEC) in Texas, USA. The company was able to bring this project around six months ahead of schedule, at a time when storage capacity is in high demand. The company is now working on a further 3.5 million barrel construction and expects to start commissioning tanks at the end of 2020. Upon completion of this construction, MIEC will have a total storage capacity of more than 15.5 million barrels. In addition to the 3.5 million barrels of crude storage, the company says it is discussing more storage expansions with customers. ‘We have plenty of space for further expansion – our total footprint is close to 1,000 acres,’ CEO Bo McCall explains. ‘We are currently in discussions with additional customers looking for additional services as the need for market

optionality has been reinforced by recent events. Moving forward we will work to adapt to the challenges that the current energy market faces, as well as potential customers’ logistics challenges.’

Furthermore, MIEC will start receiving deliveries from Harvest Midstream’s Ingleside Pipeline, which is currently under construction and is anticipated to come online later this year.

‘We are aware companies may be pressing pause on new long-term contacts, so we are offering different contract scenarios to meet their needs.’

One project MEIC is working on is to recommission LPG storage at the site. ‘MIEC has LPG storage, refrigeration and loading capabilities that we are in discussions with various customers to bring back into service,’ McCall adds.

‘We’re not going to build on speculation. Any construction projects would need to be aligned with a long-term business model. We will have to make very prudent choices on what we do next, so our continued ability to remain nimble and flexible is essential.’ MEIC is the last link in the supply chain for producers out of the US basins. It also boasts the fastest loading rates in the US – a combined rate up to 160,000 barrels per hour. The terminal has direct connectivity to about 2.5 million barrels of Permian and Eagle Ford crude supply per day from four long-haul pipelines, with the Gray Oak Pipeline and the EPIC Crude Oil Pipeline having recently started operating at full capacity.

‘No one could have anticipated the demand we’re seeing today,’ McCall concludes. ‘But it has been encouraging to see how the quickly the industry has reacted to providing storage alternatives, with measures like bringing out-ofservice infrastructure back into service, repurposing assets and using pipelines for storage – it’s been really impressive to watch.’

01 Moda Midstream completed its 10 million barrel crude oil expansion in April six months ahead of schedule

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MARKET ANALYSIS THE AMERICAS

TANK SHORTAGE 2020 With dramatic demand drops amid worldwide COVID-19 quarantines, everyone’s talking about storage. Paul Wiseman takes a close look at the impact it’s having on the US market USUALLY the rest of the world, including the oil and gas upstream sector, takes tank storage for granted. It is just a stop for petroleum and refined products on the way to buses, cars or boats. But with COVID-19 quarantines slashing global energy demand by as much as 30%, even the historic production cut agreement with OPEC+, combined with significant capex cuts by non-OPEC producers, still leaves much more production than the market will bear. Excess production of both oil and refined products is running out of places to go. In April, Texas Railroad Commissioner Ryan Sitton predicted all available storage would fill within 50 days. That was before the OPEC+ agreement to cut production by more than 9 million barrels per day, but that agreement was not scheduled to start for several weeks after his statement. REACHING THEIR LIMIT As onshore tanks fill across the Americas, experts see more oil being stored on tankers. The US Department of Energy is also in negotiations to lease out a portion of the vacant space its Strategic Petroleum Reserve space in Texas and Louisiana to small- and mid-size producers after Congress failed to fund US President Donald Trump’s offer to buy oil to fill the SPR. In an April newsletter article entitled ‘Caribbean Vacation for Surplus Crude?’ Sandy Fielden, Director of Research Commodities and Energy at Morningstar, reported that producers across the Americas were looking to the Caribbean for relief because the islands are centrally located. Fielden wrote, ‘Data from Ursa Space Systems suggests that available commercial capacity on the islands is still underutilized. Its satellite survey covers commercial and refinery storage capacity in the Caribbean, including commercial tanks at 10 island terminals. Among them, these terminals have 69 mmb of commercial crude storage capacity with 45 mmb of that capacity still available, according to Ursa’s latest survey April 2.’ With nine deepwater ports that can accommodate the largest VLCC tankers, the area allows easy access to large loads.

PAGE 26

Storing crude and products offshore is actually nothing new, said Matthew Smith, director of commodity research at ClipperData. Usually, however, floating storage (defined as being in the water for seven days or more) is centered on Asian terminals near Singapore and Malaysia, in amounts nearing 50 million barrels. ‘They’re sort of the parking lots of Asia,’ Smith said. As floating storage increases, it has spread out to include places like New York Harbor (three million barrels), and other east coast locations. Origins of this oil include Canada and offshore UK. Canada and the US West Coast are also hosting more tankers. Not all the floating storage belongs to import, said Smith. About 16 million barrels of crude were recently counted in the Gulf of Mexico, but most of that was produced in the US. Some of that oil is waiting on a call to go elsewhere, but even in normal times some midstream companies have Gulf Coast floating storage as a temporary overflow relief valve. Smith added that the EIA reports refineries have reduced gasoline output to historically low levels, and yet inventories of that fuel increased by 10 million barrels during a week in April. ‘What you’re going to see – because you typically don’t see anywhere near as much product storage for gasoline as you do for crude, because (gasoline) goes stale – but if you do see floating storage of products building, that is a really bearish signal because it shows that there really is stress in the market.’ If floating crude storage is around 100 million barrels, floating gasoline is about 20 million, he said. Total US onshore storage is approximately 650 million barrels. With contango in full force, there is much incentive, Smith pointed out, for traders to buy and store as much oil as possible

now, since they are confident in the prospect of selling at a significant profit in a few months. To further enlarge storage capacity, two midstream companies have asked Texas regulators to allow them to convert pipelines into storage. Energy Transfer and Enterprise Products Partners have asked the Texas Railroad Commission to let them convert a total of three lines to storage. The two Energy Transfer pipelines will add about 2 million barrels of storage to the marketplace. 2019 – A VERY GOOD YEAR FOR US EXPORTS The year 2019 was good for US crude oil exports, according to the EIA. ‘US crude oil exports averaged 2.98 million barrels per day (b/d) in 2019, an increase of 930,000 b/d (45%) from 2018. The number of destinations for U.S. crude oil exports increased from 41 to 44, and Canada continued to receive the largest share (15%, or 459,000 b/d), followed by South Korea (14%, or 426,000 b/d).’ The EIA also reported that in 2019 US energy production exceeded consumption for the first time in 62 years. But in the current environment, few export customers are buying. For the week of 4 April 2020, the EIA reported: ‘US commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 19.2 million barrels from the previous week. At 503.6 million barrels, US crude oil inventories are about 6% above the five year average for this time of year.’ This report may have contributed to the historic plunge to prices well below zero the week of 20 April. The year was good for one of the main export facilities, the Port of

MARKET ANALYSIS THE AMERICAS Corpus Christi, said POCC CEO Sean Strawbridge. New pipelines added more than a million barrels per day of throughput. POCC began the year handling 700-800 thousand barrels per day and ended in December with 1.7 million. About 600k bbl went to Valero’s Three Rivers refinery, the rest to exports. The facility also increased LNG passthrough by 6 million tons (US) Due to Chenier adding a second train to POCC. With throughput increases, tank storage also grew during that span. From a 2015 level of 22 mm bbl of storage for crude and refined products combined, capacity grew to 30 mm bbl of crude in early 2020, with another 10 mm bbl of storage for refined products. All storage is owned by private companies. The US Army Corps of Engineers is also moving ahead with projects aimed at deepening and widening the Corpus Christi Ship Channel from 47 feet to 54 feet and widens it to 530 feet. Deepening will allow large carries to be filled closer to capacity onshore, and widening will speed traffic by allowing ships to pass each other. In April, Moda Midstream announced completion of a 10 million barrel expansion at its Moda Ingleside Energy Center and the Moda Taft Terminal in Taft. They plan to add another 3.5 million barrels of crude storage, with those tanks available in Q4. As demand and storage options shrink, US shale producers have slashed 2020 capex plans by 50-80 percent, and drilling has dropped by more than two thirds. With shale’s steep decline curve, experts expect US production to drop by around 2 million barrels per day by the end of 2020, and even further in 2021 and 2022. The hardest-hit areas may be shale plays in parts of the Bakken and Oklahoma. CHALLENGES FOR CANADA After years of struggling with takeaway challenges and delays in the two main projects expected to bring relief – Trans Mountain Pipeline (from Alberto to the British Columbia coast) and Keystone XL (to US markets in Cushing, OK and on to the Gulf Coast) – Covid-19 may have obviated both. Kevin Birn, vice president, IHS Markit Crude Oil Markets and an expert on Canadian petroleum, said 2020 actually started off with optimism on the takeaway front. ‘The Trans-Mountain Pipeline saw a number of court cases in its favor now, and there was, in term of Line Three (Enbridge’s Line Three replacement going 1,097 miles from Edmonton to Superior, WI) moving to procedural permits in Minnesota, which appeared to be taking longer than anticipated was moving forward.’ Another project hit a new snag. After US

President Trump pushed to get the longdelayed Keystone pipeline back on track, it was derailed once again, this time by a ruling from the U.S. District Court for the District of Montana. The court withdrew a nationwide Clean Water Act permit for the project, saying the US Army Corps of Engineers had failed to follow Endangered Species Act requirements. Prices for Canadian crude had been discounted before the Coronavirus shutdown due to the pipeline backlog, and Birn pointed out that at prices which dipped below $10 per barrel, ‘No upstream operators make any money at those prices. It’s just a question of how ready your company is to withstand this price environment, what’s your fiscal position and how long will this low price environment last?’ While oil sands get most of the publicity in Alberta, Birn said there is also significant unconventional production, operated mostly by smaller independent companies that tend to be highly leveraged, although they can make a profit at lower prices than can the larger producers. In western Canada by percentage, oil sands accounted for two thirds of the 2019 hydrocarbon production, including condensate, vs. one third by unconventional/conventional wells. Oil sands produced 2.9 million barrels per day as opposed to 1.5 million barrels per day of non-oil sands. Due to the extreme capital investment required for oil sands, however, companies producing those fields tend to be large, better funded and more integrated than the unconventionals. For oil sands companies, ‘Their balance sheets coming out of 2019 were quite strong.’ So many oil sands costs are fixed, including equipment and personnel operations approaching the size of a small city to heat the formation and recover the oil, simply slowing production is unprofitable. Plus, ‘On the thermal side, there is a risk to the reservoir if they were to totally turn those things off, because they need to be kept warm,’ Birn said. MEXICO AND SOUTH AMERICA Kent Williamson, executive director, Refining & Marketing, Latin America at IHS Markit, said areas south of the Rio Grande River are being hit hard. Coronavirus shutdowns have uniquely hurt what Williamson calls the informal economy that is based on cash and services – things that requires personal contact for every transaction; they have slashed demand for gasoline and diesel as they have around the world; and travel restrictions have crashed the tourist economy Latin America so depends on. Petroleos Mexicanos, or Pemex, has

not cut its capex for 2020 – one of the temporary sticking points in the OPEC+ agreement of April. Having lost $18 billion in 2019 with oil prices around $50, greater losses appear to be coming. The company’s debt load overall exceeds $100 billion. New President Andrés Manuel López Obrador, or AMLO, promised during his 2018 campaign to reverse the previous administration’s 2015 opening of the country to outside investment in oil and gas. Actual reversals have been slow, and in this environment investors have little interest in the upstream sector anyway. But as the world’s sixth largest market for gasoline and diesel, downstream markets appeal to US refiners watching American demand for gasoline plateau over the last two years, before Coronavirus shutdowns. While Pemex still controls approximately 80% of the retail market, AMLO is alarmed by the increase in refined product imports from the US over the last year. ‘Private diesel imports are about 30-40% of all imports,’ Williamson said. ‘Gasoline has gone up by around 20%.’ Pemex is building a new refinery and upgrading their existing facility. The company fears its market share could drop below 50%, Williamson said, which would give them little market for product shipping from the new refinery. In response, regulatory rulings have begun to favor Pemex in regards to competitive pricing, low-sulfur diesel formulas and in other ways. To handle increasing imports, private storage terminals have boosted capacity. Pemex has 15 million barrels of operative storage, and private tankage is currently around 3 million barrels. Over the next two years, Williamson sees private storage catching up to that of Pemex. Valero is overseeing the building of terminals at Veracruz and near Puebla and Mexico City. The latter will be linked with Mexico’s rail system. Tuxpan, north of Vercruz, is also the site of tank expansion. Because of its connection to Pemex pipelines connecting to Mexico City, Tuxpan is the main entry point for imported gasoline, largely from the US. The new terminal is already leased out to several companies including ExxonMobil. In Brazil, Petrobras has reduced production by approximately 200,000 barrels per day, with more reductions likely. Plans in the works to sell of four of the company’s eight refineries to private companies have been put on hold. Those assets include tank storage and pipelines. For at least the next few months, the eyes of the world will be on how to store crude and refined products. Now everyone realizes the important service tanks provide to sellers and to buyers.

PAGE 27

MARKET ANALYSIS FLOATING STORAGE

FUEL FLOWS AND FLOATING STORAGE: THE NEW NORMAL? Oil analytics firm Vortexa shares its insights on the rapid expansion of global floating storage across the oil complex, and how oil flows are being reshaped in unexpected ways in the wake of the COVID-19 pandemic GLOBAL markets in the first half of 2020 are oversupplied with oil products at levels not previously experienced by the industry. Transportation restrictions have forced refiners to reduce output, to adjust product yields and bring forward maintenance. The net result is a glut of historic proportions that has accumulated in onshore and offshore storage for both crude and refined oil products. In this low demand-high supply scenario, storage acts as a critical buffer in the supply chain. Diverting oil into storage can buy some time for demand to recover (and potentially avoid a costly refinery shutdown), for supply to fall further, or a new compromise of the two. Storage capacity, where large enough and in the right locations, can assist in balancing this supply-demand disconnect, but it has its limits. Those limits have been tested, especially at key oil storage hubs, where we see a rapid expansion of floating storage, that is, cargoes on board tankers stationary for at least seven days. Floating storage provides an indication to market participants – including storage operators – as to where the marginal barrel is being stored. This points to where the next surplus and deficit may emerge, and where onshore storage demand is waning or on the rise. Aside from an ever-present level of operational floating storage, what we saw in Q1 and Q2 this year was refiners, traders and other market participants scrambling to secure tonnage for use in commercial floating storage. The latter strategy became more attractive after a steepening in the contango market structure – where prompt product prices are lower than those for later delivery dates – across the oil price complex. This steepness of the contango reflects both oversupply but is also a prompt to traders that more oil needs to be stored to balance supply with demand. The growth of floating storage began

PAGE 28

with the discharge delays that emerged in early January-February, particularly in China, but is a phenomenon that is now observable around the world as tighter onshore storage availability forces barrels onto water. Global oil floating storage (crude and refined products) reached around 300mn bl by end-April, the highest in at least four years.

to produce the road fuel – ventured into negative territory in the northwest European market in the first half of March and has remained there since. In normal times, the US acts as a major outlet for Europe’s excess gasoline production. But in March gasoline flows tapered until finally collapsing in April. The drop in flows from Europe to the US in April, was reflected in US EIA data posting an all-time record low (going back as far as 1991) for gasoline demand. In a bid to clear some of the surplus gasoline in Europe, traders shifted cargoes to storage terminals across the world – from St Croix in the Caribbean to Iceland. It’s little surprise then that the seasonal rise in flows, in the run up to peak US summer gasoline demand, has failed to materialise this year (see chart 2).

CHANGING FLOWS Alongside the ramp up in floating storage volumes, Vortexa note numerous examples of jet fuel, gasoline and diesel cargoes pivoting away from usual destinations since the beginning of the year – including tankers making turns midocean, to discharge at locations where storage capacity was likely to be higher. One of the first unusual trends that emerged earlier in Q1 took place as a result of widespread lockdowns in China and South East Asia. Thousands of flights were grounded within the region, creating a regional glut of jet fuel. This drove a steady rise in trans-Pacific flows to the US west coast, until the US subsequently implemented its own transport restrictions, as shown by the drop in April flows (see chart 1)

Similar movements into Caribbean storage were observed on global diesel flows. Diesel cargoes loaded from huge global exporters such as Russia and India, sailed past their usual European discharge locations during Q1, and instead placed volumes into the US Atlantic coast and the Caribbean.

While jet fuel was the first to show the stress that refined products demand came under, gasoline demand soon followed with the sharp downturn in transatlantic gasoline flows. The gasoline crack spread – the margin derived by refining crude

Amid the rise in global floating storage and the re-routing of flows, Vortexa’s data has also unearthed pockets where there has been a surge of import activity. Often this has been at locations where there is access to pipelines and/or oil storage caverns.

Date Quantity (t) ##### 341086 Jan-20 382763 Feb-20 399470 Mar-20 437481 Apr-20 195594 ##### 414188 Jan-19 366651 Feb-19 323214 Mar-19 433328 Apr-19 349458

NICHE LOCATIONS

Asia to PADD 5 jet fuel exports (t)

vs 12m ago

500000 450000 400000 350000 300000

Date ##### Jan-20 Feb-20 Mar-20 Apr-20 ##### Jan-19 Feb-19 Mar-19 Apr-19

Quantity (t) 341086 382763 399470 437481 195594 414188 366651 323214 433328 349458

250000 200000 150000 100000 50000 0

Dec-19

Jan-20

Feb-20

Ma r-20

Apr-20

MARKET ANALYSIS FLOATING STORAGE To give that some historical context, typical floating storage volumes for both products combined ranged between 1-2mn t during 2019.

vs 12m ago

2500000

2000000

At the beginning of May, notable ports and regions of floating storage include offshore the Mexican Gulf coast, ARA, west Africa, Singapore and Fujairah – all of which are either key production, demand or storage hubs for the products stored offshore.

1500000

1000000

500000

b1 M 8 a r18 Ap r-1 M 8 ay -1 Ju 8 n18 Ju l-1 Au 8 g1 Se 8 p1 O 8 c t1 N 8 ov -1 D 8 ec -1 Ja 8 n1 Fe 9 b1 M 9 a r19 Ap r-1 M 9 ay -1 Ju 9 n19 Ju l-1 Au 9 g1 Se 9 p1 O 9 c t1 N 9 ov -1 D 9 ec -1 Ja 9 n2 Fe 0 b2 M 0 a r20 Ap r-2 0

Le Havre jet fuel imports (t)

When aggregated globally, these floating storage tankers have led to a significant tightening in vessel availability, which has led to a surge in short term freight costs. Vortexa data shows that up to 16% of the clean tanker fleet was deployed in floating storage at the end of April. For dirty tankers, used to transport crude and dirty petroleum products, the figure was close to 10%.

vs 12m ago

700000

600000

500000

400000

300000

200000

100000

WHERE NEXT FOR FLOATING STORAGE?

As onshore storage nears limits – be it at a refinery, third-party tanks/caverns, or otherwise – the next logical step in the supply chain is the deployment of tankers for floating storage, both for crude and refined products. For the latter, this trend gathered momentum from early Q1, with a rapid rise in March-April, particularly for diesel and gasoline. Excess diesel production was also exacerbated by refiners seeking to blend more jet fuel into the diesel pool as the slump in jet fuel demand deepened.

01 Asia to PADD 5 jet fuel exports (chart 1)

Global gasoline and diesel held in floating storage stood at around 5 mn t each on 1 May, up from 2mn t and 2.8mn t, respectively, a month earlier (see chart 4).

05 Gasoline and diesel volumes in floating storage (chart 4)

02 Europe to US gasoline exports (chart 2) 03 Le Havre, France jet fuel imports (chart 3) 04 Map view of gasoline, diesel and jet fuel floating storage (map 1)

05 Global diesel and gasoline in floating storage (t)

10000000

Gasoline/Components (t) Diesel/Gasoil (t)

9000000 8000000 7000000 6000000 5000000 4000000 3000000 2000000

PAGE 29

30-Apr-20

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14-Apr-20

12-Apr-20

10-Apr-20

08-Apr-20

06-Apr-20

04-Apr-20

02-Apr-20

31-Mar-2 0

27-Mar-2 0

29-Mar-2 0

25-Mar-2 0

23-Mar-2 0

21-Mar-2 0

19-Mar-2 0

17-Mar-2 0

15-Mar-2 0

11-Mar-2 0

13-Mar-2 0

09-Mar-2 0

07-Mar-2 0

05-Mar-2 0

03-Mar-2 0

01-Mar-2 0

28-Feb-20

26-Feb-20

24-Feb-20

22-Feb-20

20-Feb-20

18-Feb-20

16-Feb-20

14-Feb-20

12-Feb-20

10-Feb-20

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08-Feb-20

06-Feb-20

29-Jan-20

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27-Jan-20

02-Feb-20

25-Jan-20

23-Jan-20

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19-Jan-20

17-Jan-20

15-Jan-20

1000000

13-Jan-20

Date Quantity (t) Quantity in floating storage on Diesel/Gasoil (t) Gasoline/Components (t) 01-Jan-20 1763267 1670688 02-Jan-20 1781200 1614911 03-Jan-20 2005950 1590975 04-Jan-20 1920324 1456210 05-Jan-20 2012228 1267171 06-Jan-20 2072920 1307235 07-Jan-20 2021452 1351641 08-Jan-20 1958533 1326754 09-Jan-20 2139003 1237898 10-Jan-20 2239506 1380398 11-Jan-20 2387475 1438221 12-Jan-20 2364754 1377219 13-Jan-20 2275890 1568541 14-Jan-20 2264973 1628188 15-Jan-20 2384093 1519060 16-Jan-20 2048688 1494108 17-Jan-20 2098386 1577649 18-Jan-20 2304323 1395374 19-Jan-20 2384658 1298533 20-Jan-20 2159721 1341512 21-Jan-20 2165296 1405697 22-Jan-20 2042899 1571478 23-Jan-20 2088975 1581180 24-Jan-20 2164272 1479725 25-Jan-20 2219419 1330947 26-Jan-20 2028716 1345819 27-Jan-20 1904625 1402262 28-Jan-20 2001959 1466761 29-Jan-20 1906724 1424951 30-Jan-20 1902434 1456473 31-Jan-20 2038814 1373404 01-Feb-20 2025320 1420681 02-Feb-20 1891683 1433666 03-Feb-20 1869099 1413066 04-Feb-20 1992050 1247008 05-Feb-20 2158446 1320093 06-Feb-20 2393867 1120448 07-Feb-20 2415195 1304166 08-Feb-20 2357635 1263394 09-Feb-20 2521667 1361464 10-Feb-20 2823207 1516367 11-Feb-20 2449319 1612185 12-Feb-20 2514250 1626288 13-Feb-20 2386104 1691678 14-Feb-20 2234819 1558944 15-Feb-20 2410366 1662790 16-Feb-20 2577241 1556738 17-Feb-20 2679554 1558294 18-Feb-20 2992115 1488656 19-Feb-20 3065590 1348239 20-Feb-20 2935529 1345479 21-Feb-20 2866915 1410503 22-Feb-20 2515565 1451839 23-Feb-20 2674264 1466395 24-Feb-20 2413254 1438702 25-Feb-20 2078815 1259862 26-Feb-20 2167693 1080142 27-Feb-20 2074620 926737 28-Feb-20 2104545 1031578 29-Feb-20 1997413 957110 01-Mar-20 2094378 918590 02-Mar-20 2236834 1024360 03-Mar-20 2380650 1095204 04-Mar-20 2466553 1061425 05-Mar-20 2487160 1058105 06-Mar-20 2229824 970274 07-Mar-20 2142512 948159 08-Mar-20 2003620 1150132 09-Mar-20 2678318 1209065 10-Mar-20 2776930 1065058 11-Mar-20 2951630 1142650 12-Mar-20 2979304 1006560 13-Mar-20 2871454 956599 14-Mar-20 2696256 1016977 15-Mar-20 2567926 1029646 16-Mar-20 2760591 1248526 17-Mar-20 2874946 1133098 18-Mar-20 2999366 1099097 19-Mar-20 2913538 1233785 20-Mar-20 2757504 1058830 21-Mar-20 2618596 1204063 22-Mar-20 2681701 1270848 23-Mar-20 2782805 1225334 24-Mar-20 2803726 1236048 25-Mar-20 2885380 1219308 26-Mar-20 2892678 1336368 27-Mar-20 2825168 1532023 28-Mar-20 3043354 1526296 29-Mar-20 2978487 1533571 30-Mar-20 3260739 1676557 31-Mar-20 3154580 1763317

11-Jan-20

09-Jan-20

Caverns storage is typically a cheaper storage option than land-based tanks due

The activity of the current and future fleet of floating storage tankers is a clear indication of how supply/demand fundamentals are changing day by day. The measure of offshore stocks will remain a key metric used by industry to try and pinpoint the key shifts in supply and demand.

FLOATING STORAGE

07-Jan-20

On diesel, one of the most interesting trends to emerge is the recent spike in diesel flows to Sweden. The remarkable surge in diesel imports by a country that is historically a net exporter is the result of huge volumes of Russian Baltic diesel ending up in storage dotted along the Swedish coastline, including in oil caverns. This marks a radical shift from the normal flow of these diesel cargoes going to the typical large consuming markets such as Germany, France and the UK.

Market participants will continue looking intently for any signals of demand recovery around the world. Most recently, European gasoline blending components have been heading in greater volumes to China as the country begins its own recovery post-lockdown. In a similar vein, European flows of naphtha to east of Suez markets is also likely to hit multiyear highs in May as Asian petrochemical feedstock demand ramps up.

to the inherent lack of flexibility regarding the moving in and out of product. The location also tends to be further away from end consumers, another factor reducing the appeal for most traders in normal markets. But it is evident that this has not dissuaded traders from filling such capacity.

05-Jan-20

A noteworthy example of the former is the record jet fuel imports during March into the French port of Le Havre. The port received more than 600,000t that month, a record high going as far back as at least January 2016. The significance of Le Havre is that is an entry point into the CEPS Nato pipeline network that transports jet fuel to numerous airports in western Europe. One month after the record high, imports at Le Havre collapsed (see chart 3) – a strong indication that that any rush to fill pipeline capacity was all but over.

03-Jan-20

Quantity (t)vs 12m ago 345642 173883 194179 404071 436131 338347 236220 106331 354411 371219 236361 350730 278856 144208 514047 508236 366742 459281 435597 298195 278388 398245 321208 334271 348578 386718 305148 373713

Europe to US gasoline exports (t)

01-Jan-20

278856 144208 514047 508236 366742 459281 435597 298195 278388 398245 321208 334271 348578 386718 305148 373713 468410 357193 416815 397009 413751 361633 319513 403079 470872 215954 631527 100926

Ja n18 b1 M 8 a r18 Ap r-1 M 8 ay -1 Ju 8 n18 Ju l-1 Au 8 g1 Se 8 p1 O 8 c t1 N 8 ov -1 D 8 ec -1 Ja 8 n1 Fe 9 b1 M 9 a r19 Ap r-1 M 9 ay -1 Ju 9 n19 Ju l-1 Au 9 g19 Se p1 O 9 c t1 N 9 ov -1 D 9 ec -1 Ja 9 n2 Fe 0 b2 M 0 a r20 Ap r-2 0

Quantity (t)vs 12m ago 1413101 725867 816513 1578024 1114178 1036087 1243238 1022079 1297300 362829 662268 547692 760657 1070945 1184562 1761909 1594699 1510534 1443387 1637289 1275333 792088 585675 757464 1036317 942574 1388412 2079411

760657 1070945 1184562 1761909 1594699 1510534 1443387 1637289 1275333 792088 585675 757464 1036317 942574 1388412 2079411 1617196 1641580 1867819 1448889 1400674 1176859 1113695 655073 826874 1084583 1051330 472545

TECHNICAL COVID-19 IMPLICATIONS

COVID-19 AND THE OIL MARKETS ANYONE who thinks they could try and forecast how this pandemic will play out in the oil markets must be a very brave person indeed. I have been around long enough to have seen a few oil crises in my time, but the nearest I can get to match this one, is the Yom Kippur war of 1973 and the subsequent quadrupling in the price of oil during the first quarter of 1974. I was then one of BP’s crude shipping and refining operations team.

STOCK AND PRODUCTION SURPLUSES IN 2020 COVID-19 SCENARIOS Production surplus

mmbd

Stock shock absorbers million bbls

675

Days to fill tanks

135

67.5

Figure 01 The speed of stock building

Subsequently, the Arab nations took the side of Egypt and accused the West of aiding and abetting the Israelis. An oil embargo was instituted by members of AOPEC (Arabian Oil exporting countries) against perceived supporters of Israel, primarily the USA, UK, Canada, The Netherlands, S Africa and Portugal (My guess is that they used this as an excuse to hike the price of oil and to nationalise their oil fields). This resulted in a scramble for oil from other sources and drove the price up by 400%.

This recycling of Petrodollars pushed up wages and the cost had to be borne by the refiners without the ability to pass it on. Not only that, but 1974 was the year when most Arab countries nationalised their oil industry and the majors got little in compensation. Furthermore, they had to agree to minimum volume offtake contracts. A lot of them scrambled to invest in alternative cash generating companies, or so they thought. None had the right skill sets to run mining investments or electric typewriter manufacturers. The result was that as soon as the oil industry started to take off again, these diversionary investments were sold off, usually at a loss. We will see a bit of this activity coming back again as investments by the majors in green energy start to take off. If demand for fossil fuels does not recover as quickly, as the oil companies hope, then the climate change pressures may reduce and activists might disappear.

I remember well thinking at the time, that if I strung together in the English Channel, the VLCCs waiting to discharge their cargoes, I could easily build a bridge between France and the UK.

We are now looking at a similar scenario to 1974. The lockdown in most consuming countries is resulting in a cut in demand, of what we are told by the forecasters, is anywhere between 20 and 30 million barrels per day (mmbd). The OPEC + + agreement is to cut somewhere between 10-15 mmbd. That still leaves a sizeable surplus of production over demand.

The storage companies made an absolute killing and it also made a fortune for the few brave traders who went long (without any hedging options) and who are still around today. The oil majors, on the other hand, suffered badly as their obligations to maintain supplies to their customers,

Refineries typically hold between 10-15 days storage of crude oil and 20-30 days storage of products, i.e. about a month’s offtake. The global independent and government-owned storage capacity is reckoned to be around 1.7 billion barrels. If we add about 80 VLCC’s to this, we will

The result was a massive scramble for oil storage capability and a huge number of floating storage tanker charters.

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High Case

meant that they had to absorb the expensive crude they had bought at least a month prior. Thus, they took a hit on the higher cost of storage and the lower cost of product at the pump. In addition to this, there was financial inflation generated by the recycling of petrodollars.

The price rise resulted in a massive drop in demand and a massive surplus of crude oil that could not be absorbed easily in the refining system. The oil pipeline of ships on the water that had loaded 30 days prior could not be reversed.

Medium Case

The Yom Kippur war was started on 6 October 1973 when Egyptian and Syrian Forces and the Egyptian Air Force launched an attack on Israel during the holy day of Yom Kippur. They caught the Israelis off guard, but the counterresponse was fierce.

The reaction in Europe and the United States was a major deflationary effect on demand for petroleum products, together with a ramping up of exploration in ‘safe’ areas, such as the North Sea, Canada and Alaska.

Low case

achieve a further 165 million barrels of crude oil. Plus, another 50 million barrels or product held in floating storage. So, let us be generous and call the total available land-based and floating storage around 2.0 billion barrels, of which about 80% would be in constant use. Therefore, the shock stock capability of the independent sector would be about 555 million barrels. Made up of 340 million land-based storage and 215 million in floating storage. Refining capacity globally is around 100 mmbd. Again, making a broad assumption that the refineries had a base load working stock of 60% of nominal capacity. Then, based on 30 days storage, they can add a further 120 million barrels to go to tank tops. This gives us a total shock absorption capacity of 675 million barrels. If the production is cut by only 10 mmbd, then we will be over producing by anything up to 10 mmbd anyway. Now we can paint a few scenarios. The demand reduction projections all seem to cluster around the 20 mmbd. Taking this figure and assuming the OPEC ++ do achieve a cut of 10 mmbd, which is never certain, then the world’s stock shock absorber capacity will be filled within 60 days. We have already had three to four weeks of lockdown at a production rate of 100 mmbd. The chart on the next page shows how we are progressing. It can readily be seen that we exceed our buffers prior to end of April and that thereafter cuts will be imposed on the oil producers by virtue of an inability to lift the oil produced. This may come about by a declaration of Force Majeure by the refineries or the traders supplying them. This could also happen by more and more tankers being taken over as floating storage, leaving very few to transport oil. We have news that the Izmir refinery is closing until demand returns. The first of many.

TECHNICAL COVID-19 IMPLICATIONS So, what will the world look like when we come out of the long lockdown that some governments are predicting? I doubt that aviation demand will take off that quickly and therefore the biggest mover is likely to be gasoline and diesel, as most people will not want to travel on packed commuter trains and buses if they could possibly avoid it. The stock surplus generated will need to be absorbed by the refineries before they start their replenishment programme.

SUPPLY / DEMAND Production

Cumulative stock build

MARCH

APRIL

MAY

100 100 100 100 90 90 85 85

Demand March April May

Storage companies will become cash cows again and their profitability will attract infrastructure funds to return to the market. Some of the deals may be from one infrastructure fund to another as some funds reach their exit term mandates. We note that Zenith Energy was put up for sale

MMBD

March April 1-13 April 13-30 May

Stock build

This is what happened in 1974 and it took over a year before some semblance of balance was restored. This implies a contango market structure being maintained for at least 12 months and possibly longer.

80 80 80 80 90 90 mmbd

14.3

-5

million bbls

620

430

-155

million bbls

1050

895

and was the Interpipeline network. These have been shelved for the moment but will return to the market. Bunker fuel supply business will continue to be seen as a profitable area, now that VLSFO is no longer considered a surplus by-product and the majors could return to this market in aggressive takeovers. The refining system will remain depressed, as margins will continue to be pressurised by the surplus stock position and although the price of the crude oil held in stock will be cheap, competition will keep margins very tight. These are a revisiting of the scenario that we saw in 1974 and there is no reason why it should not play out in a similar fashion. The ingenuity of the oil industry to overcome such shocks has been tested time and time again and it has always proven up to the challenge. I see no reason why it should not succeed in solving this problem yet again. For more information: This article was written by Charles Daly, Chairman of Channoil Consulting: www.channoil.com

Figure 02 The stock build scenario

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MARKET ANALYSIS COVID-19

THE BRIGHT LIGHT AMIDST TODAY’S ENERGY UNCERTAINTY COVID-19’s impact on the infrastructure market has been widely publicised. Some assets, formerly viewed as safe investments, have faced unexpected and unprecedented challenges. But amidst this challenging environment, storage terminals have benefited from the supply/demand imbalance worldwide IT’S CLEAR that traditionally ‘safe’ investments are experiencing difficulties. European airports, for example, are now either fully or largely closed - not a downside scenario that could have been anticipated. Likewise, ferries, toll roads, motorway services and equipment leasing companies are experiencing a difficult trading environment as lockdown measures across the country persist.

For the above reasons, Europe is an attractive market for liquid bulk storage investors. Despite EU governments’ containment of the supply/demand imbalance, local refining capacity continues to shrink, driving demand for short-term storage solutions. This is a stark reminder of the post-2008 Global Financial Crisis, where a number of European refineries either closed (Wilhelmshaven in Germany, La Mede in France and Coryton in the UK); operated at reduced capacity (UK’s Stanlow and Lindsay), or converted to alternative plants (Porto Marghera and Gela in Italy).

SURPLUS ENERGY With the sharp reduction in demand for transportation fuels, crude oil prices (WTI) recently reached unprecedented minimum barrel prices, including negative prices for a short period of time. Power prices have also decreased across Europe, with most manufacturing grinding to a halt. The lower electricity demand benefited existing renewable energy power plants, but has made the business case for new plants more challenging. LIQUID STORAGE TAKES CENTRE STAGE However, these market dynamics have driven one bright corner in the energy infrastructure world: liquid storage. As the oil markets enter the biggest contango since the global financial crisis, traders (both strategics and speculators), are busy buying cheap commodities (such as refined oil products), to store in tank storage facilities, with the expectation that the commodities value will recover and offset their storage costs for a healthy profit. The marketplace is currently full of anecdotes about remote storage facilities in the Baltics or Scandinavia which have been empty for years until the first few weeks of March 2020, when they were contracted for 100% of their capacity for the next few years. The current demand for liquid bulk storage is so large that

PAGE 32

COVID-19 HAS DEALT ANOTHER BLOW TO EUROPEAN REFINERIES

traders are even renting rail cars and containers to store products – a good sign for oil storage terminal owners. NOT ALL STORAGE TERMINALS ARE CREATED EQUAL However, not all storage terminals will benefit from this market dynamic. Infrastructure investors continue to have long-term investment horizons (in some cases up to 25-30 years) and appreciate stable and predictable cash flow profiles. The current spike in profits is unlikely to change investors’ appetite for acquisitions outside of their focus criteria, such as terminals which: • Facilitate trade flows • Rely on economic activity rather than short-term trading profits • Are integrated in their customers’ supply chains • Are in strategic locations, such as: - Close proximity to customers’ petrochemical plants and refineries; or - Major ports / rail connections • Facilities with diverse modalities

The reduction in European refinery activity was already evident preCOVID-19, however, with pressure from increased competition from newer, more modern refineries in the Persian Gulf and India. In addition, the shale oil boom in the US has made US refineries more competitive than their European peers. In the last decade, European refineries have been squeezed between US and Middle- Eastern competitors driving refinery activity to the brink. Furthermore, there is a significant build-up of refining capacity in China. According to the IEA, China registered the highest growth in refining capacity in the period 2016-17 adding c.30mt1, and Chinese total refining capacity is expected to exceed that of the US by 2025. The growth in China is expected to displace refining capacity in the rest of the world, with the Mediterranean region likely to be the most impacted in Europe. In short, the supply/demand imbalance in Europe is likely to outpace the drop in demand for transportation fuels even in the most optimistic forecast for EV implementation. According to S&P Global Platts, since 2009, Europe has lost some 2.2 million barrels per day worth of crude oil refining

MARKET ANALYSIS COVID-19 capacity across the continent2, and, according to FuelsEurope, out of the 100 refineries operating in Europe, 18 mainstream refineries were closed3. Despite efforts to diversify sources and grades of crude, as well as maximise margins and flexibility, Europe is expected to see further closures going forward. As above, the shrinking refinery production has driven demand for storage tanks – and with IMO 2020 and EU Renewable Energy Directive regulations in mind – the range of liquid bulk products, as well as the demand for blending capabilities, have increased significantly. Therefore, one could conclude that liquid bulk storage has an attractive future in the European market. THE INVESTOR VIEW Infrastructure investors have already begun to act – proactively investing in the sector over the last few years with examples including: • JP Morgan’s infrastructure fund acquiring Koole • IFM acquiring a stake in VTTI • Aberdeen Standard Investments (ASI) acquiring Oikos • ASI and DIF Capital Management acquiring UniTank

• First State Investment acquiring some three of the Vopak terminals, and more recently, Caldic This trend could well continue as COVID-19 places storage under the Microscope, with investors taking shortterm measures to increase returns. However, environmental and social governance (ESG) concerns have recently driven a paradigm shift in investors’ attitude towards investing in liquid bulk storage facilities. It is understood that some investment committee members and fund LPs see storage terminals as investment into ‘dirty’ oil assets and at odds with a greener future. Commercial due diligence advisers should take the lead in explaining the role of liquid bulk storage terminals in the overall energy transition – this will play an essential part in allowing the smooth transition to a green future, and in an economically viable manner.

increase following the rise in maritime fuel varieties. The process of blending different oils and renewable-based fuels requires more storage capacity, and is a trend supported by new regulations including IMO 2020 and the EU Renewable Energy Directive • However, investors should realise that storage facilities play a significant role in the wider energy transition theme and have an attractive investment case. References 1 www.iea.org/reports/oilinformation-2019 2 www.plattsinsight.com/insight/ commodity/oil/european-oil-refineryclosures-modernizations/ 3 www.fuelseurope.eu/wp-content/ uploads/SR_FuelsEurope-2019-32.pdf

THE FUTURE IS BRIGHT FOR LIQUID BULK STORAGE

For more information This article was written by Martin Krastev, DC Advisory UK’s energy expert, www.dcadvisory.com

• The supply/demand imbalance in European market is likely to continue widening as a result of the closure of several European refineries • Storage facility demand is set to

01 Martin Krastev, UK energy expert, DC Advisory

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PAGE 33

TANK STORAGE AWARDS THE WINNERS OF 2020

TANK STORAGE AWARDS: THE WINNERS OF 2020 This year’s Global Tank Storage Awards was one of the last events before corona virus restrictions came into force across the globe. Find out more about why this years winners deserved to be recognised for their achievements in safety, sustainability and innovation

DESPITE the challenging circumstances nearly 200 attendees gathered at Rotterdam’s Floating Pavilion on the 10th of March for the fourth edition of the awards ceremony, celebrating excellence within the terminal industry. The evening honoured the sector’s high achievers, recent innovations, emerging technologies, environmental breakthroughs, and leading ports and terminals. Tank Storage Magazine caught up with the winners to share their achievements…

CLH Group

TERMINAL EFFICIENCY CLH Group Spanish company CLH Group was founded close to 100 years ago has grown into an international leader in the transportation and storage of oil products. CLH was recognised at the Global Tank Storage Awards for its terminal efficiency processes, which has seen it implement advanced technologies and renewable energy systems across its terminals. Gorki Penalva, assistant manager of logistics services at CLH, says innovation and safety were at the core of its business model, and the company’s overarching goals were to maintain operational excellence while

PAGE 34

developing new services and promoting international expansion. ‘We are preparing the ground to become a data driven company, so that we can make strategic decisions based on data analysis and interpretation,’ he says. ‘For example, we’ve carried out individualised analysis of our equipment to establish customised maintenance protocols for each piece of equipment, optimising life cycles and performing more efficient maintenance.’ Penalva noted that one of CLH’s most exciting technological advances over the past couple of years was the improvements it has made to the SCADA system, a powerful computer tool that enables the company to manage more than 4,000km of pipelines in Spain by satellite. ‘The new SCADA is more agile and flexible and allows our specialists to centralise a wide range of tasks. It is also a safer system, as it incorporates the latest software updates that protects it against cyber attacks,’ he says. Another recent development has been the implementation of a digital delivery note system, which allows road tanker drivers to download loading operation documentation onto their mobile devices rather than having to print them out. On the environmental front, CLH has been working at making its operations carbon neutral by 2050, powering equipment with solar energy and using other renewables for electricity generation. It recently signed an agreement with American company Plug Power to use

hydrogen in its work towards creating a zero emissions solution, while forming an agreement with the Spanish Association of Oil Product Operators to promote the development of low-carbon liquid fuel. ‘We’re also working on a ‘from waste to resource through recycling’ project in cooperation with a cluster of companies across various industries, acting as a research leader for obtaining fuel from urban plastic waste,’ Penalva explains. Penalva says the company was thrilled to receive the Terminal Efficiency Award because it felt it recognised the strategies CLH had implemented and gave it further incentive to continue to improve on its work.

TANK STORAGE AWARDS THE WINNERS OF 2020

Sprague Energy

SUSTAINABLE IMPACT Sprague Energy For 150 years, Sprague has been working in the energy industry and is one of the largest independent suppliers of fuel, natural gas and electricity in the northeastern US. Sprague has a large regional network of terminals and was recognised at the Global Tank Storage Awards for the sustainable impact it has been making by implementing solar tanks across its network. Sprague’s first solar tank system was installed on the top of a former storage tank, and now produces nearly 100,000 kWh/year in power, while reducing the

energy demand and related costs for the terminal by about 10% per annum.

either on-site or selling onto the electrical grid,’ says Leduc.

‘The panels are less than half an inch thick, lay flat to the surface, and can be walked on, so there’s no impact to daily operations,’ explains Jay Leduc, managing director of health, safety, environment and sustainability at Sprague.

‘With the tremendous amount of space available on the roofs of storage tanks, terminals have the opportunity to become very large clean energy power plants while continuing to support their existing and future storage business.’

Aside from reducing greenhouse gas emissions, Sprague says the technology has allowed for operators to lower costs while increasing the value of its existing assets.

He says it was vital the terminal sector was seen as a supporter of sustainability efforts, working to change attitudes some may have towards the industry.

The company says although so far it has implemented its solar tank technology solely within its own terminal network, it plans to expand throughout the industry. ‘Particularly, we want to work with other companies interested in saving costs, reducing their environmental footprint, and producing renewable energy for use

‘The more we can do as an industry to promote our sustainability efforts, from solar tanks to wind energy, biofuels and beyond, the better the public will understand the work being done to provide essential services and products in an even more sustainable manner,’ Leduc says. Sprague is in the process of creating two more solar tanks at its terminal near Albany in New York state, and when installed, the technology is anticipated to offset the entire annual electrical demand for the facility. Along with its solar tank technology, Sprague is also investing in giving back to the community through charity work, offering low carbon fuel options, employing a diverse workforce, and creating innovative technologies. Sprague says it was honoured to win the Sustainable Impact Award and to be recognised by industry peers. ‘We hope our efforts help others see the sustainability value of solar tanks,’

Fujairah Oil Terminal

SAFETY EXCELLENCE Fujairah Oil Terminal The Global Tank Storage Award for Safety Excellence this year went to the Fujairah Oil Terminal (FOT) which is located in the United Arab Emirates. The judges said the terminal demonstrated an impeccable safety record, specifically when it came to implementing safety procedures and minimising lost time, while it also had exhaustive strategies in place for both personnel and assets. The award recognises FOT’s commitment to create and practise a well-developed safety culture throughout its operations. ‘We consistently work to explore new ideas for implementation and strive to always remain pioneers in safety measures,’ says Cliff Shi, Managing Director at FOT. FOT operates 24x7 and has a capacity of more than 1 million m³ across 36 storage tanks. PAGE 35

TANK STORAGE AWARDS THE WINNERS OF 2020 The terminal has made many safety improvements over the past year, including the implementation of boardlevel QHSSE (Quality, Health, Safety, Security and Environment) visibility. ‘We’ve also adopted digital innovation to enhance safety performance, improved ergonomic solutions to reduce personnel injuries, installed a new highlevel security surveillance and remote monitoring system, and implemented a shareholder audit system,’ says Muthukrishnan Pattabiraman, the QHSSE manager at FOT. Focused on keeping its terminal workers safe, FOT developed an Integrated Risk Management procedure and assessment, which communicates all

risks and appropriate precautionary measures to the employees and other related parties.

it started spreading in our region,’ explains Malek Azizeh, commercial director at FOT.

‘FOT has been constantly encouraging its staff to identify and report what we deem to be ‘high potential incidents’ which has helped to drastically to reduce the recordable incident trends from the commissioning,’ explains Shi.

Azizeh adds FOT regularly reviews its current operational practices, sources of different exposures and mitigation measures to minimise the external exposures.

This management of potential risk can be seen in the way FOT has handled the coronavirus pandemic, with proactive measures driven by Shi. ‘Shi closely monitored the virus’ development in China and made sure to prepare our terminal and our employees to take all protective and preventive measures early on and well before

‘We provide training to our staff, instantly updating colleagues on any developments, while adopting a work from home policy. We’ve also developed and implemented a dedicated Covid-19 Impact Management Procedure that focuses on preventive measures, eliminating employee exposure to external parties and back-up system for the business continuity,’ says Shi.

UMF

PORT INNOVATION UMF (Union Maritime et Fluviale de Marseille Fos) UMF was recognised at the Global Tank Storage Awards for its Smart Ports technology – a cargo intelligent system that connects different logistics business to improve processes, tracking, security and competitiveness. Smart Ports uses Blockchain technology and artificial intelligence to send real-time information to users’ mobile devices. The client-focused and intuitive system is reducing business administration costs while optimising cargo flows. By digitally connecting all port and logistics players, Smart Ports focuses on managing information through early notifications which are traceable and secure, giving customers efficient service. Marie-Hélène Pasquier, general secretary at UMF, says the company was highly-experienced in developing new solutions dedicated to logistics, and had been working on IT innovation for more than 30 years. ‘The Smart Ports system is undoubtedly a major asset for innovation, namely in regards to the digital and circular economy,’ she says. The Smart Ports technology features two systems – the Cargo Community System (Ci5) and the Port Call Management Application (Neptune) which are digital services for both ships and cargo. Ci5 was developed by data company Marseille Gyptis International (MGI), and works by connecting all port players and tracing all cargo statuses to improve processes.

PAGE 36

‘Ci5 creates better port fluidity, enhanced productivity and improved supply chain monitoring,’ says Pasquier. Neptune is a digital app created by Grand Port Maritime de Marseille that manages ship calls while coordinating port services and supplies. Ci5 and Neptune are interconnected and work together to create a flawless information flow. Pasquier says feedback from within the port industry has been very positive, and UMF had now created an annual event to connect with other port communities to discuss further changes in the logistic and supply chains. ‘We launched a pitching contest last year for start-up companies to uncover new ideas and concept, involving those who

participated in the Petrochemical Global Logistic Convention,’ she explains. UMF has signed partnerships with incubators and accelerators to embrace further technological advances and is part of the ‘Smart Port in Med’ collective which works at launching new digital projects. Pasquier says one positive to come from the coronavirus situation was that it will encourage more people to embrace digital tools. Like all ports around the world, Marseille-Fos has been affected by COVID-19 but the port was still 100% operational, functioning under specific measures. ‘Thankfully Smart Ports allows equipped facilities to pilot their supply chain from their office or at home, without the need for transport or handle paperwork,’ she says.

TANK STORAGE AWARDS THE WINNERS OF 2020 apprenticeship programme. The training links the industry to trade bodies and was a culmination of two years of hard work, involving the development of new qualifications and training material.

Reynolds Training

RISING STAR John Reynolds, Managing Director at Reynolds Training

‘Watching the apprentices grow over a two-year period is amazing, and so too is knowing we provided them with the first steps in what can be an exceptionally rewarding industry, while giving them many career pathways to follow,’ he says.

The Rising Star Award is presented to a person who is paramount to the success of their company and who has the potential to become a key contributor to the tank storage industry. This year, the award was received by John Reynolds, managing director of Reynolds Training – a business that provides training, competence assessment and management for the bulk liquid and gas storage sector and associated industries. Reynolds Training provides an effective training platform across a broad range of technical and academic subjects and is actively nurturing the next generation of tank professionals through its apprenticeship programme. Reynolds says he believed the company’s point of difference was their experience blended with a willingness to listen and learn from industry, and

that it isn’t shy in investing in the latest training technologies. ‘We communicate clearly with our clients and work closely to help them achieve their training vision,’ he says. ‘We support our training with additional investment, expanding the plant at our HQ in CATCH this sees us bringing in the latest of systems from Honeywell.’ Reynolds says his proudest achievement to date was starting the company’s

Reynolds acknowledges like with all businesses, the global pandemic has affected Reynolds and caused the company to evaluate its delivery methods. These include locking down and working from home while embracing new technology to ensure companies can maintain the same level of regulatory and technical knowledge and skill. ‘Our future goals as we move forward are clear – finalise the plant expansion, embrace new training delivery methods, recruit for cohort 2 for the science and manufacturing bulk liquid terminal technician apprenticeship and work with our clients, past present and future to assist them with their training and competence delivery requirements,’ he says.

TEPSA

OUTSTANDING ACHIEVEMENT Nuria Blasco, General Manager of TEPSA The Outstanding Achievement Award winner was selected by the tank storage market and this year Nuria Blasco was chosen, based on her role in the growth in TEPSA’s storage activities. Blasco is proud to have been with TEPSA for more than 20 years. She started as a technical and health and safety officer and says she has thoroughly enjoyed working her way up to her current position in the company. Blasco believes the award acknowledges not only her work, but that of the ‘outstanding TEPSA team’. ‘The prize belongs to all the 150 dedicated professionals, who work hard every day. It’s their effort, involvement and enthusiasm that made this possible. I’m very proud of the people I lead, and I’m incredibly grateful to them,’ she says. Last year saw record turnover and profits for TEPSA, with positive performance across its three business lines – chemicals, biofuels and fossil fuels. The company also renewed its top management with terminal leaders who Blasco says have ‘extensive knowledge of the sector’.

‘We have defined the 2020-22 plan and strengthened our client portfolio, promoting the hub and industrial terminal model, combined with traditional distribution at the four ports. The first phase of expansion at the Tarragona terminal is now operational and we have already managed to contract 100% of its capacity,’ she explains. Blasco says health and safety is always a number one priority for TEPSA, especially during the COVID-19 outbreak, but that the economic future of companies and individuals was also paramount. ‘We need to make a common effort, with common policies to help the entire world overcome this crisis. The world, as a whole, needs help from governments. So, what can we do? Spread this

message: first, health and safety; next, financial help to overcome this situation,’ she says. Sustainability is crucial in TEPSA’s business, and Blasco describes this as ‘essential in the long-term for businesses like tank storage’. As a board member of The Chemical Business Association of Tarragona (AEQT), Blasco is not unfamiliar with sustainability work. AEQT was formed as a committee to contribute to the sustainable development of the chemical sector in southern Europe. ‘We need to minimise our environmental impact while also reducing our energy consumption. It’s also important for our organisational and financial structures to be streamlined and sustainable,’ she explains.

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TANK STORAGE AWARDS THE WINNERS OF 2020 offloading for tank farm filling purposes with fuel oil, vacuum gasoil and class-3 blend components.

Tecam

ENVIRONMENTAL PERFORMANCE

‘Once the problem and all its variables were analysed, Tecam proposed a custom-made Regenerative Thermal Oxidizer (RTO) as the most optimal solution, taking into account the volume, nature and characteristics of the emitted vapours,’ Sala explains.

Tecam Tecam was recognised at the Global Tank Storage Awards for its dedication to environmental performance and work in making companies safer and more efficient.

Tecam says its technology had not only been well-received by KTM but by many within the tank storage sector and it says it will continue to roll out its technology solutions to other ports around the world.

The Tecam provides environmental technology for the petrochemical, pharmaceutical, chemical, oil and gas, automotive and packaging industries, by treating air impurities and reducing industrial waste pollution. For its Environmental Performance Award, Tecam was recognised specifically for its integrated system for vent gas treatment at the Port of Rotterdam which has seen a 99.9% reduction of polluting emissions. This means 13,860 tonnes of Volatile Organic Compounds (VOC) emissions will not be released into the atmosphere. As a further win, the technology was implemented without interrupting any terminal operations. Bernat Sala, Tecam’s CEO, says Tecam was pleased to win the award, as the company was working towards creating

Toptech Systems

TERMINAL OPTIMISATION Toptech Systems The Terminal Optimisation Award is given to a business that has provided software, a service or model that succeeds in optimising, streamlining or improving storage terminals around the world. At the 2020 Global Tank Storage Awards,

‘We are expanding internationally, especially in Europe and South East Asia,’ Sala says. an industry with less pollution, while making operations more cost-effective. ‘We are focused on customised solutions for emissions and hazardous waste treatment aimed at helping companies in different sectors manage their environmental needs,’ he says. Koole Tankstorage Minerals (KTM) one such company to contact Tecam for its assistance in reducing its emissions through Tecam’s vent gas treatment process. KTM wanted to eliminate the vapours and odours generated during barge and ship

the Terminal Optimisation prize was awarded to Toptech Systems for its Synetics business intelligence tool, which allows users to easily analyse detailed facility data. Toptech Systems says Synetics empowers facility managers, allowing them to easily make effective changes to their operations, while giving them the opportunity to spot trends and investigate unusual activity. Product manager at Toptech Systems, Annelies Godefroit, says data management is critical for terminal optimisation, whether analysing customer, transaction or load rack data. ‘Having organised, accurate customer data is directly connected to the level of customer service the terminal is able to provide. It has far reaching effects such as the amount of time between contract signing to first truck load, the customer’s ability to load, and the terminal’s ability to readily find important documentation,’ she explains. Through Toptech’s suite of products, terminals are able to put accurate transaction data at their fingertips, which improves the speed and accuracy of billing and the terminal’s ability to track

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Like with many businesses, Covid-19 is slowing down business growth plans and Tecam’s production unit is currently closed until further notice. However, Sala insists this will not affect the development of ongoing projects since its team can work off-site. ‘Our team is continuing to provide remote support to our customers, answering questions that may arise in the development of ongoing projects. Our commitment is to mitigate, within our possibilities, any potential impact on operations with our customers while keeping our people safe and sound,’ Sala explains.

product. With this clear and easy-to-read information, safety and efficiency of loading processes are also improved. Godefroit says the company’s technology has been in demand because the terminal market is in need of improved access to the data surrounding its operations. Toptech Systems’ other software, Load2day, has changed the customer data management process with a selfserve data maintenance model. Terminal customers use the tool to enter in their own data and this is then sent to the terminal management system. ‘This greatly reduces manual data entry and makes on-boarding new customers a breeze,’ Godefroit explains. Toptech’s newest terminal management system is the TMS7, which like the TMS6 model, automatically collects transaction data and sends it to the host system, providing greater data accuracy. Acknowledging Toptech’s win, Godefroit says it motivates the company to continue its hard work. ‘We pride ourselves in solving the problems of tomorrow and driving the industry towards greater efficiency,’ she says.

TANK STORAGE AWARDS THE WINNERS OF 2020

Diakont Advanced Technologies

EMERGING TECHNOLOGY Diakont Advanced Technologies The Emerging Technology Award was given to Diakont this year for its tank inspection tool that can be used remotely, analysing tanks for leaks with its robotic crawler technology. ‘We aimed to meet these core design criteria with the technology: certified explosion-proof equipment, nondestructive evaluation that is better than out-of-service methods, ensuring high reliability, and having minimal or no effect on on-site operations,’ says Edward Petit de Mange, managing director at Diakont. The robotic technology was designed after Diakont realised a gap in the tank storage inspection market. Petit de Mange explains that over the life of the tank, most of the structure can be easily inspected, such as the roof, shell and seals, but many operators struggled to easily inspect the floor condition of the tank. ‘Yet our technology allows operators to conduct quick assessments, or complete floor inspections – and to do so while the

tank remains filled and in operation. It is used to appropriately-prioritise their tank maintenance schedule, and also to extend the inspection interval on tanks in good condition,’ he says. The inspection tool accesses the condition of the storage tank floors, checking, measuring and characterising metal loss and coating damage on both the product and soil sides of the tanks. Through its 3D sonar technology, the crawler is able to safely and efficiently navigate the area during tank floor inspections, while reducing the risk for personnel having to enter the tank, saving both time and money. ‘Any technology that safely and effectively takes humans out of harm’s way, especially eliminating human entry to hazardous confined spaces – that’s a big win for our entire industry,’ says Petit de Mange. When using the technology, a Diakont field team member launches a remotelyoperated, certified explosion-proof robot into the tank, and completes a fullyencoded high-resolution magnetic flux leakage and ultrasonic testing inspection of the entire accessible tank floor. ‘It does this without requiring any manned entry, without having to drain the tank and take it out of service for weeks, and while also substantially

OUTSTANDING ACHIEVEMENT The 2020 Global Tank Storage Award for Innovative Technology was presented to TWTG, industrial Internet of Things (IoT) technology company, for its innovative NEON product line.

NEON products can wirelessly connect

‘Running a facility’s tank integrity program can historically be a little like playing a card game against your tanks – but now our technology lets you see their cards. It can have a major impact on the facility operator’s bottom line,’ he says.

‘Our products put the focus on safety – for example the valve sensor checks and verifies whether valves are open or closed, so spillage due to human error can be reduced. This is an advantage economically, but also a bonus from a safety perspective as workers are operating these valves,’ he says.

TWTG

TWTG has deployed its NEON sensors at the Vlaardingen Vopak Terminal in the Netherlands, retrofitting them on top of existing manual quarter-turn and multi-turn valves to determine and communicate whether a valve is open or closed. The range has seen strong uptake and in response, TWTG is expanding within the oil and gas, petrochemicals and other industries.

He adds the technology is driving a paradigm shift for tank operators.

Gavric describes as ‘granular insight into existing assets such as pumps and valves’.

TWTG

NEON is an ATEX (ATmospheres Explosible) / IECex (International Electrotechnical Commission Scheme for Certification) zone 1 industrial IoT range of products for the oil and gas storage industry. This means the NEON range is certified to be used in hazardous and potentially explosive environments.

reducing VOC emissions. Particularly when implemented at a facility using a risk-based inspection program – the cost savings for the tank operator can be staggering,’ Petit de Mange explains.

via LoRaWAN (Long Range Wide Area Network), are battery-powered and feed into existing distributed control systems. This allows operators to remotely access data about the valves from an interactive dashboard. ‘Having this reliable information available is the essence of good decision making to ensure safety in working environments, especially in industrial sites,’ explains Goran Gavric, CEO of TWTG. ‘As a result, businesses will run more efficiently and operations will be streamlined.’ The complete NEON product line provides a number of different conditionbased monitoring systems, such as the NEON Vibration Sensor, giving what

Gavric adds the products are ‘incredibly well-engineered’ and fill a gap in the market that hasn’t previously been possible before due to cost. ‘NEON products are retrofitted on top of existing infrastructure, making them more sustainable while lowering the total cost of ownership,’ he explains. ‘Oil and gas companies aren’t likely to replace billions of Euros worth of equipment for added technology insight, but by being able to place it on top of existing infrastructure saves these companies a lot of money.’ Gavric says TWTG was pleased to win the Emerging Technology Award as it recognised the benefits the company’s IoT technology is bringing to the oil and gas industry. ‘It makes us, as a striving company, very proud, but it also verifies our position in the market,’ he says. PAGE 39

TANK STORAGE AWARDS THE WINNERS OF 2020 for human presence in the confined storage container. The company’s technical operator remains a safe distance away in the Zone 1 control unit, where they can monitor activity and progress, through a series of ATEX cameras fixed to the robot, inside the tank being cleaned. The unique features of the large robot make it ideal for cleaning the storage tanks. A combination of specially designed 3,500 PSI jetting water nozzles, powered by a high-pressure low flow pump, play a vital part in the cleaning process.

Re-Gen Robotics

SAFETY TEECHNOLOGY Re-Gen Robotics Within less than a year of launching, ReGen Robotics won the Safety Technology Award. Tank entry is widely recognised as being one of the most hazardous operations in the tank cleaning business and every year as many as 200 people across Europe, lose their lives working in confined spaces. Traditionally personnel have been required to enter hazardous oil tank environments to implement inspections, de-sludge and clean for product change. Re-Gen Robotics’ automated robots, in combination with competent staff, eliminates confined space entry, cleans safely, with precision and efficiency. In Spring 2019, Re-Gen Robotics launched the first and only Zone 0 EX Certified, remote-controlled, ‘No Man Entry’ robotic tank cleaning company in the British Isles. The company invested £2.5 million in creating three purposebuilt, Ex Zone 0 rated robots. The large robots are designed to fit through a standard 600mm entry hatch via an extending ramp and desludge, wash and clean large-scale tanks, including fixed

PAGE 40

roof and floating roof tanks. The robot has the power to clean the largest oil tanks with no hassle and can handle heavy fuel oil, crude oil, sludge and the like. The robots are designed to operate in the most inhospitable environments and with specialised access cranes, remote camera systems and engineering expertise, any size or shape of tank can be cleaned. Re-Gen Robotic’s unique, closed-loop cleaning system can reduce cleaning time by up to 45%, significantly decreasing downtime and loss of production whilst oil tanks are not operational. At no time during the Re-Gen Robotics cleaning process is there a requirement

The auger system at the front of the robot breaks down heavy sludge without the requirement to use water, thereby generating less waste. Sludge is then extracted by an ADR certified jet/ vac tanker with 4,800 C/ m3 per hour vacuum capacity. The entire tank cleaning operation is recorded on CCTV from the ATEX cameras and is made available to the client upon completion of the works. All files are date and time stamped to ensure the process is traceable for auditing purposes. A record of gas detection readings is also issued on completion of each vessel cleaning, produced by the onboard gas monitoring equipment. Re-Gen Robotics is providing a realistic and proven alternative to ‘man entry’ tank cleaning.

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TECHNICAL RAILCAR SAFETY

SAFETY AS STANDARD NO MATTER THE SCENARIO Staying on Track: Preparing tank railcars for terminal operations and transportation 01

REDUCING FATALITIES IN THE RAIL INDUSTRY According to the FRA, the main causes for fatalities within the US rail industry are negligence, human error and reckless pedestrians or drivers. It is nearly impossible to eliminate all injuries from the industry, but with improved maintenance and more thorough inspections, the frequency of non-accident releases (NARs) can be significantly reduced. NAR is the technical name of an incident where product is released from a tank rail car without the railcar having been involved in an accident.

COVID-19 has seen a dramatic fall in fuel demand as fewer planes take to the skies and drivers keep their cars off the road. This knock-on effect has meant fuel storage tanks around the world are rapidly reaching capacity and has led to producers scrambling for places to store their excess production. Oil companies have been searching for alternative ways to store crude as traditional storage becomes more expensive and harder to find. One suggested method has been to store fuel in freight trains. However, the director of liquid operations at US-based Colonial Terminals Michael Mashburn, advises producers should proceed with caution. ‘It would be very costly storage first of all, but if everybody operates by stringent guidelines, then in theory, there shouldn’t be any significant risk increase. However, one stationary storage tank is generally less risky than 200 mobile storage cars, as it’s at least 199 fewer closures and generally fewer opportunities for something to potentially go wrong,’ he explains. And stringent guidelines are something of which Mashburn is very familiar. Over the past 10 years he has been developing a detailed tank car inspection checklist to prepare tank rail car shipments to meet Federal Railroad Administration (FRA) as well as specific storage customer requirements.

By training operators to use a checklist like Colonial Terminals’ of what is needed to prepare a tank car for operations and transportation, Mashburn says terminals can minimise the number of safety risks. ‘Our operators use a 36-point inspection process and we are constantly evolving it based on information we receive from the FRA, our storage customers, as well as feedback from our own operations team,’ he explains. All the tank cars moving through Colonial Terminals are inspected using this resource – both in a pre-loaded and postloaded condition – before they can be offered for transportation. Over the years, safety between shippers, carriers and tank car operators has improved as regulators have upped the ante on what is required for meeting their stringent standards. In the US alone there are more than 100 regulations determined by the FRA that operators of tank cars need to abide by. MANWAY SAFETY OFTEN OVERLOOKED Mashburn says one area often overlooked for an inspection is the manway (manhole) access areas, which provide entry points into the railcars. Specifically, the manway safety bolts. ‘The manway lid on a railcar normally has six to eight bolts with 1-2 of them being a safety bolt,’ he says. ‘The safety bolts are designed to protect the operator by preventing the lid from forcefully opening if the tank is under pressure.’

If these safety bolts are not properly assessed during an inspection, and the tank is under pressure, this could increase the risk to the next operator of the car. ‘This can be extremely dangerous,’ Mashburn says. ‘Especially if tanks’ cars are not checked for and relieved of pressure prior to opening the manway. FRA shares a story of an operator at another terminal who had his arm nearly removed from a manway lid flying open.’ He adds that it’s important to remember that like with most equipment, tank railcars are continuously moving and over time they will eventually need maintenance and upkeep to keep them safe. ‘This is why these inspections are so important – they’re needed to check that the safety and integrity of the tank railcar is being maintained.’ LOOKING BEYOND A SIMPLE INSPECTION It’s important to assess the rail car in its entirety before it is put into transportation, and even though the FRA outlines a list of what it looks for, there are some grey areas on specifics. For instance, the Administration repeatedly mentions in its regulation 49.173.31(d) to be aware of “any other condition that would make the tank car unsafe for transportation”. ‘More than just the tank needs to be looked at with each inspection so operators should walk around the railcar before operation and inspect some of the mechanical aspects as well,’ Mashburn says. Ensuring all placards are in place with an adequate holder and making sure they’re readable, verifying brake pads, inspecting safety appliances such as ladders and platforms, checking the stub sills for cracks, and checking load limit capacities against load orders are just some of the important considerations. COVID-19 CHANGING THE WAY WE WORK Like with many industries, Colonial Terminals has had to re-think the way it operates in order to comply with social distancing measures during the

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TECHNICAL RAILCAR SAFETY Only time will tell how the COVID-19 pandemic will affect the future of the way we work, but Mashburn acknowledges there could be positives to come out of it.

Wilmington Colonial Terminals of North Carolina

Savannah

‘I think a lot will change – a lot has already changed – not just in our industry but across the board. People are realising they can work from home and have meetings by teleconference, and it’ll be okay – we’re seeing a change in mentality,’ he says.

Terminal Terminal Georgia Kaolin Terminals

COVID-19 outbreak. But thankfully, Mashburn says thus far, Colonial Terminals has been able to adjust. ‘Employees who can work from home, are, whereas most people working at the terminals can practice social distancing and better sanitisation practices, like frequent hand washing and increased cleaning of common areas. In fact, much of our normally worn PPE, such as gloves, goggles and chemical suits are serving a double duty to help to protect our team members from the virus,’ he says. The company has also implemented

simple measures to keep people apart, such as removing chairs from common areas and placing visual markers in the office and breakrooms of what 6 foot (1.8m) spacing looks like. ‘For example, with our operator loaded tank trucks, the drivers are attaching their paperwork to a clipboard at the load rack before vacating the area. The operator then enters the area and reviews it. When the truck is loaded, the process is done in reverse, sending the driver on their way without any close contact,’ Mashburn says.

anunci-tepsa-adaptacio-175x120_ENG.pdf

31/1/20

For more information Michael Mashburn, Manager of, Liquid Operations at Colonial Terminals will be discussing this topic at this year’s ILTA Conference & Exhibition in Houston. His session on tank railcar inspection will include numerous examples of accept/ reject conditions as well as sharing the Colonial Terminals tank railcar inspection checklist with each attendee. Due to Covid-19 ILTA has been postponed until the 16-18th November 2020. Find out more at: www.ilta.org

01 Michael Mashburn, Director, Colonial Terminals 02 In the terminal business since 1934, Colonial Terminals Inc. operates multiple liquid storage and dry bulk facilities in Savannah, Georgia and Wilmington, NC.

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TECHNICAL NEWS

TECHNICAL NEWS: GLOBAL INDUSTRY UPDATES Implico

EVOS TERMINAL IMPLEMENTS DIGITAL RAILCAR HANDLING SOFTWARE European tank terminal operator Evos has begun using a digital connection to the Hamburg Port Authority (HPA). Via a new interface to a cloud communication service, the tank terminal and the HPA now exchange train data fully automatically – manual entry and transfer by employees are no longer necessary. The solution was developed and implemented by the specialist for tank terminal software solutions, Implico. Every year, thousands of railcars are handled at the Evos terminal in the port of Hamburg. These ensure the railbased supply of various hydrocarbon products from different refineries and terminals. Until now, an incoming freight train meant a lot of manual work for the Evos team: The employees had to record each arriving railcar by hand, including the associated master data. Based on this information, they generated the required unloading order. This process was both time-consuming and error-prone. Now that the HPA and the terminal management system OpenTAS Blue Edition used by Evos

are connected, the terminal operators receive all information about incoming freight trains in advance: The data is imported into the system via an interface and the unloading order is generated automatically. To further digitalise the remaining safety check of the railcars, Evos has planned the introduction of additional mobile devices. These handhelds will be integrated into the terminal management system. They allow the terminal crew to check the railcars directly and digitally – from the master data to the sequence of the wagons to the visual security inspection via checklist. This increases safety as the employees cannot overlook anything. In addition, the use of handhelds eliminates redundant tasks and supports the field staff optimally with state-of-the-art technology. Consequently, it makes the process much more efficient. Sebastian Palandt, Manager IT and OT at Evos Hamburg, explains: ‘With the new interface and the planned handhelds, we take a big step towards the further digitalization of our processes. For the deliveries that reach us by rail, we now receive all relevant information in advance – be it the actual wagon data, the order data or the details of the products loaded. Furthermore, the usage of mobile devices directly on site at the train significantly increases the level of transparency and security’.

NEWEST TECHNOLOGY FOR FUTURE-PROOF DIGITISATION The data exchange between the HPA system TransPORTRail and the terminal management system OpenTAS used by Evos is carried out via the innovative web service ‘iGOS Data Exchange’ from the tank terminal IT specialist Implico. In the implementation of the project, the experts used many innovations, such as the state-of-the-art cloud technologies Docker and Kubernetes. Thomas Roller, Head of Sales, Marketing & Business Development at Implico, outlines the background: ‘Implico develops cloud-based solutions that find usage along the entire oil and gas supply chain. Since these web services are extremely flexible, companies can implement them quickly and use them easily. The rail interface used by Evos is part of a broad portfolio and marks an important step in the digitalisation of tank terminals’.

MHT

MHT ANNOUNCES NEW FEATURES UK-based MHT Technology has announced new software features for its tank gauging software VTW. New features on the VTW software include: • Business information server (BIS) – The BIS is a new feature in VTW that offers real-time tank gauging information to workers supporting tank farm operations. The service uses the latest web standards to deliver an easy user experience without compromising the security of your operational systems. • RMS2 – It is now possible to support tank farm workers away from the control room with audio messages and warnings transmitted over site radios. - The system can be used with both virtualised and redundant servers. • HM21 inventory calculations – inventory calculations have been added including ethylene, propylene and butadiene.

PAGE 47

TECHNICAL NEWS

Noon Advisory

NOON ADVISORY HELPS TERMINAL INDUSTRY INCREASE PROFITS AND REDUCE BOTTLENECKS During challenging times such as these, it is even more important than ever to ensure companies within the terminal industry are allocating resources correctly and optimising their performance. Formed at the beginning of 2020 in Houston, Noon Advisory is an advisory and consulting practice dedicated to the energy, midstream, and chemicals industries worldwide. The company works with terminals, equipment suppliers and EPC providers to look for new opportunities as well as pinpointing areas they can increase profit and improve safety. Noon Advisory Group is founded by Joe Nassif, who has over 10 years of experience at BASF as well as industry knowledge from working at Emerson, Odfjell, Kinder Morgan and NuStar Energy. ‘In the current scenario where tanks are full due to low oil demand & oversupply,’ Nassif explains, ‘throughput levels are reduced, which has an impact on profits. Noon Advisory can help identify and reduce bottlenecks to increase revenues. ‘We can also look at performance-based

PAGE 48

contracts for example to reduce the amount terminals spend on maintenance costs & capital projects and result in greater reliability and profitability from their service providers.’ When it comes to digital transformation, Nassif understands that the right automation can increase a terminal’s profitability by double digit figures. ‘Digitalisation plays a role in improving repetitive tasks as well as in high risk areas,’ he explains. ‘this can reduce labour costs significantly.’ Nassif also specialises in highlighting technologies that terminals may not be aware of to optimise processes. Noon Advisory can provide project management training where required as well as expertise on M&As, due diligence and dispute investigation. ‘The current situation with Covid-19 is likely to accelerate the pace at which companies explore the energy transition and sustainability,’ Nassif explains. ‘It’s inevitable that the whole industry will eventually migrate towards more sustainable alternatives such as LNG, hydrogen and wind & solar, as these become more cost-effective. ‘We are able to provide advice on the best sustainability measures. There’s a lot of talk about installing solar panels on terminals at the moment,’ for example. ‘However this limits the tank to holding products that don’t require heating, so it might not be the best solution for everyone. ‘There are still many questions in the near term, he explains. ‘Will oil

companies be bailed out? What is the long term outlook for the US shale industry? We don’t have all the answers, but we can certainly help companies with their investment, optimisation and project management needs.’ For more information www.noonadvisory.com

01 Joe Nassif, President, Noon Advisory Group

2020 API STORAGE TANK

CONFERENCE & EXPO

OCTOBER 12-15, 2020 | GRAND HYATT NASHVILLE, NASHVILLE, TENNESSEE

The 2020 API Storage Tank Conference and Expo will give attendees an opportunity to learn about new and existing industry codes and standards, and to hear about emerging trends from industry experts. This two-day conference offers over 50 sessions addressing the needs of individuals involved in production systems, pipelines, terminals, refining and chemical manufacturing, and storage facilities. Each day focuses on presentations relevant to upstream, midstream, and downstream. Co-Located with the API Safe Tank Entry Workshop

Register at www.API.org/storagetank Copyright 2020â&#x20AC;&#x201C; American Petroleum Institute, all rights reserved. API, and the API logo are trademarks or registered trademarks of API in the United States and/or other countries. API Globa Marketing & Creative: 2020-034 | 02.20

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TECHNICAL CYBER SECURITY

COVID-19: CYBER SECURITY LESSONS LEARNT

THE COVID-19 pandemic has shown us that we need to be prepared to handle extraordinary situations that impact our business when measures to combat the spread of the COVID-19 were put in place by governments worldwide. These measures have had, and continue to have, a major impact in the way that we conduct business and operate our facilities. Organisations often had to fall back on business continuity plans in order to cope with the situation. On top of this, there is an increased threat from cyber-attacks that exploit this extraordinary situation.

VPNS AND ONLINE MEETINGS The usage of VPNs has increased. Organisations that support the usage of a VPN for their remote connections, had to make changes in their infrastructure to meet increased demand overnight. Increased usage of online meetings showed that certain solutions had major privacy and security issues. Including the ability of non-invited people attending supposedly secure meetings and the usage of personal information by third party social networks. PROCEDURES

PEOPLE For most tank terminal organisations, there will be minimum staff working onsite. Where possible, staff will work remotely using various means of communication. As the dependence for remote workers on digital infrastructure (supporting video conferencing, online meetings, sharing documents etc.) is increasing, it has an impact on how the tank terminal operates. Working in this situation brings its own risks and opportunities. It can be observed that as organisations scramble to organize themselves in an attempt to adapt to this situation that, from a cyber security point of view, cyber security not often is considered until ‘emergency’ infrastructure is in place. Also, existing services have had to adjust to the increasing demand from their customers for online meetings and secure infrastructure such as VPNs (Virtual Private Networks). Most organisations already had remote infrastructure in place. However, extraordinary demand has uncovered weaknesses in the way that organisations implemented remote infrastructure. These weaknesses are being exploited by malicious actors; therefore, employees should understand the (cyber) risks involved when working remotely.

Because of all the changes, for most tank terminal organisations it became evident that normal procedures do not always work or that security procedures are not fully applied when working remotely. For example, solutions were implemented without full compliance with the organisation’s security requirements, just to ensure that employees can continue working. Later, when these issues became apparent, additional security measures had to be taken to ensure a secure working environment. TRAINING Situations, such as these, show that appropriate (cyber security) training of all people working in your tank terminal organisation is essential. This ensures that everyone knows the cyber related risks and measures when working remotely. For example, only to work from home or another location using your organisation’s equipment, to take extra care using remote infrastructure and when using cloud services to be aware that these services can have limitations. PROCESS Organisations are rushing to enable large-scale work at home arrangements and educate users about the new risks of remote work. Each tank terminal

organisation needs to have their processes, policies, and procedures in place to deal with situations like the COVID-19 pandemic. These must include cyber security since malicious third parties will try to take advantage of such situations. However, quick fixes may cause more problems than the problem it is supposed to resolve. And, at the end requiring more time and resources to resolve compared to a proper solution selection process. Unfortunately, this is coming at a time when budgets are tightening due to revenue implications presented by the pandemic. The issue here is that expanding your remote workforce while simultaneously cutting budgets regarding cyber security means, for most tank terminals, solving one problem and creating another at the same time. Cutting corners can lead to a critical cyber security breach that would topple the tank terminal operations. BUSINESS CONTINUITY This situation clearly shows how important business continuity planning is for a tank terminal organisation. Business continuity planning ensures that the business can continue and survive a disaster such as the COVID-19 pandemic. Every organisation should have a well thought out business continuity plan that encompasses all vital aspects of the business. For cyber security, the recommendations from the IEC 61443 2-1 standard provide guidelines on cyber security that must be incorporated in a business continuity plan. HANDLING PERSONNEL WORKING REMOTELY If your organisation relies on third party infrastructure like cloud services and secure (VPN) connections, you should ensure that these services comply with your organisation’s minimum requirements for business operations. If the need arises to scale up in remote PAGE 51

TECHNICAL CYBER SECURITY access or other areas, you need to ensure that you have both the infrastructure and resources available in order to do so in a timely manner. In addition, tank terminal organisations should consider how to protect their equipment (like a laptop or tablet) to be used remotely from the employees’ home environment and infrastructure. Also, they should consider how policies and procedures will be enforced. This means that the appropriate processes, policies and procedures need to be in place and must have been tested to ensure that your organisation can continue operations. Things to consider are among others: how can we communicate (securely), what are the limitations of our infrastructure and what is the impact etc. TECHNOLOGY As a result of this pandemic, trusted technologies may no longer hold up under new pressures and might need change to accommodate the new requirements. INCREASED ATTACK SURFACE Having many of your employees working remotely increases the attack surface of your organisation. How do you

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‘Recommendations from IEC 61443 2-1 provide guidelines on cyber security that must be incorporated in a business continuity plan’ manage the security of your remote employees? Defending against new phishing and malware campaigns might become a priority, as criminals will take advantage of the panic. Ideally all remote users will have a VPN, but during this pandemic, this is not always the case. For example, users using popular (free) video communication tools. Therefore, it is important to monitor your now extended infrastructure for any security flaws and breaches. Is your current monitoring and logging solution up to the task? PROTECTING INFRASTRUCTURE A (remote) security operations centre can ensure that your critical infrastructure is being monitored and secured when a tank terminal organisation has minimum staff onsite. Since well managed cyber security is a vital part of your tank terminal

organisation’s defences, continuous monitoring for potential breaches is a must for protecting the assets and intellectual property. Be aware the (remote) security operations centre is specifically setup and capable of monitoring your tank terminal’s operational technology (OT) to ensure your business critical OT environment is protected against cyber related incidents. Tank terminal organisations should incorporate the ‘lessons learned’ from this pandemic and incorporate them in the existing cyber security management system. Or, setup such a system in case this has not been done yet. At least the impact of the lessons learned should be reflected in an updated business continuity plan and existing measures should be evaluated and updated if needed. For more information This article was written by Ilya Tillekens, senior security consultant at Hudson Cybertec. Hudson Cybertec is the independent cyber security consultancy & services provider for operational technology (IACS) specialized in critical infrastructure, including the tank terminal sector. For more information please visit www.hudsoncybertec.com/en/tsm

THE FETSA SUPPLIER PARTNERSHIP

WHO SHOULD JOIN?

WHY SHOULD I JOIN THE FETSA SUPPLIER PARTNERSHIP?

The FETSA Supplier Partnership is open to companies that do business with tank storage companies or have an affinity with the tank storage Who Should join? sector. This includes, but is not limited to: The FETSA Supplier Partnership

We offer you privileged access and visibility to senior decision makers in the tank storage industry through our events, publications and meetings. Specific benefits include: NETWORKING: One complimentary ticket to attend our Annual FETSA Conference

is open to companies that do business with tank storage companies and AGM Dinner exclusively dedicated to FETSA members, conference speakers and high level stakeholders from the EU political environment. First option for or have an equipment affinity with the tank storage sector. This includes, but is not limited to: Technical providers Companies providing safety services

sponsorship opportunities around the Annual Conference and related events.

VISIBILITY: Name and logo with summary of services offered will feature on a Surveying companies dedicated Supplier Partnership page of our website and will be included in our communication tools such as the FETSA website, the monthly newsletter and the services Port authorities annual management report which are circulated to senior industry executives. You will be entitled to draft an article in a quarterly supplier partnership newsletter.

Technical equipment providers Fire fighting/protection companies

Companies providing safety Loading equipment manufacturers

Fire fighting/protection companies Companies providing auditing and management systems

Loading equipment manufacturers Tank farm construction and maintenance companies Companies providing auditing Surveying companies systems and management Port authorities

Tank farm construction and (Tank) Cleaning companies maintenance companies Electrical & Instrumentation (E&I) control automation services Database providers Magazines and other industry publications

(Tank) Cleaning companies

FETSA KNOWLEDGE EXCHANGE: Possibility to organise industry seminars on Electrical & Instrumentation (E&I) relevant topics and/or with the approval of the relevant chair/secretariat to present control automation services new/emerging technologies and legislation to our committees/task forces.

Database providers

PART OF OUR COMMUNITY: Use of FETSA meeting rooms in Brussels at preferential prices (subject to availability). You can use other the FETSA logo onpublications your Magazines and industry website and printed materials in order to state that you are part of the FETSA supplier partnership. INSIGHT: You will receive our exclusive members only newsletter and annual management report so you are kept informed about the challenges we face in EU policy.

PRICE

• Annual fee of EUR 2500 (excl. VAT.) • Billed annually at the start of the subscription period (1 January). • All applications for Supplier Partnership are subject to approval the FETSA Executive Committee, and subject to the terms and conditions set out in the Supplier Partnership Agreement.

• Competition law must be respected.

Contact Ravi Bhatiani, rb@fetsa.eu for further information FETSA Rue Abbé Cuypers 3 | b 1040 Brussels, Belgium | Tel. +32 2741 68 33 | www.fetsa.eu

TECHNICAL REFRIGERATED LIQUEFIED GAS TANKS

EXTERNAL HAZARD EFFECTS ON STEEL AND CONCRETE RLG TANKS External hazards play a significant role in the selection of the tank containment system and materials of construction

THE STORAGE tank system and tank material selection are based on both safety and economic considerations to provide a safe storage solution for both the owner and public while being economically feasible. External hazards play a significant role in the selection of the tank containment system and materials of construction. The various external hazards which can affect a tank system and may require consideration in the facility risk assessment are listed in the industry standards covering refrigerated liquefied gas (RLG) storage tank systems [Ref 1, 2]. However, the major external hazards such as external fire, external explosion and projectile impact should always be included in the facility risk assessment performed by the facility owner. The

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risk assessment determine credibility of these hazards and magnitude of external loads and effects these hazards apply to tank systems. While the storage systemâ&#x20AC;&#x2122;s outer tank is often constructed of pre-stressed concrete to mitigate these external hazards, in some cases an outer steel tank may be adequate. This article will examine the resistance of steel and concrete tanks subjected to these three external hazards. In addition, other factors besides just the outer component materials may impact the tank storage concept selection. Those factors will also be examined. EXTERNAL FIRES Effects of any external fire on the tank structure can be characterized by two

parameters: thermal radiation intensity and fire duration. Certain fire conditions, for example a fire on a relief vent system, may apply a high intensity thermal radiation on the tank but only for a short duration. Other fire conditions, for example a fire in a distant process unit, may apply low intensity radiation but for a long duration. Outer tanks made from concrete are typically able to withstand short duration high intensity fires or low intensity long duration fires due to significant thermal mass of concrete and natural resistance of concrete to heat. Steel tanks are also able to resist significant thermal radiation without any mitigation but only for a relatively short time period. The obvious concern for

TECHNICAL REFRIGERATED LIQUEFIED GAS TANKS steel structures is a reduction in steel strength with increase in temperature. However, it may take a considerable time for even relatively high thermal radiation before the steel tank temperature reaches this critical level. For example, it can be demonstrated that for 15 kW/m² radiation it takes up to 100 minutes for the temperature of a steel tank painted white to reach the critical level. However, it still appears prudent to provide a fire mitigation system for any steel tank where an external fire is considered a credible event in the facility risk assessment. A different design condition is one where the fire has both high radiation intensity and long duration. An example of such a condition is an adjacent tank fire, which even with proper tank separation distances may impose thermal radiation intensities of 32 kW/m² or more for many hours while the entire content of the adjacent tank is completely burned. Even when the tank is constructed with prestressed concrete, the external wall and roof will be subjected to temperatures that reduce the effectiveness of the concrete wall prestress system. Analysis indicates that up to a 75% reduction in horizontal prestress can occur for a concrete wall with internal bonded tendons exposed to 32 Kw/m² radiation for 48 hrs. For vertical tendons, which are typically located further from the wall outer surface, the vertical prestress force reduction can be as high as 33%. The reduction in prestress is due to relaxation and softening of prestressing steel at elevated temperature as well as tendon tension losses due to the difference in coefficients of thermal expansion for prestressing steel and surrounding concrete. Furthermore, the temperature of the concrete wall inside surface keeps increasing even after the fire is over. The hot wall core keeps radiating heat toward the insulated inside surface. Analysis indicates that the concrete wall inside

surface temperature can exceed 220°C well after the exposure to the fire has ended. Therefore, wall vapor barrier and insulation in contact with the inside wall surface should not deteriorate while expose to such temperature. It can be demonstrated that a typical concrete tank with an internal bonded post-tensioning system, functioning only as a primary vapor container and secondary liquid container, retains its structural integrity despite significant loss of prestress. However, if a concrete tank is the main structural component of the system, designed to resist all operating loads including liquid product hydrostatic pressure (e.g. a membrane tank), such reduction in prestress may result in loss of the ability to carry those loads, and, thus, result in product release. Appropriate mitigation measures should be considered to ensure that the temperature of the prestressing system is kept within the reasonable limits for outer concrete tanks that carry product hydrostatic pressure during normal operation. In addition, special considerations are necessary for concrete tanks which are post-tensioned horizontally with external wire wrapping covered with a relatively thin shotcrete cover rather than with bonded internal tendons. The external post tensioning systems which are relatively close to the outer tank surface will be exposed to much higher temperature in the case of external fire. Table 1 summarizes response of steel and concrete tanks for various external fire conditions.

‘There is a common misconception that concrete tanks are always required to resist external hazards’

EXTERNAL EXPLOSION There are two types of explosions: detonation and deflagration. Detonation type explosions are characterized by a shock wave with an essentially instantaneous rise of peak overpressure. Detonations are produced by military or industrial grade explosives. Deflagration type explosions are characterized by rapid but gradual increase in overpressure at subsonic speed. Deflagrations are produced by ignition of vapor clouds. Explosion loads are generally defined by the peak free field overpressure, the positive pressure pulse duration and the shape of the pressure versus time curve. Industry publications [Ref. 3, 4, 5] provide good guidance on calculating external overpressure applied to the tank structure due to explosions. The dynamic response of the structure can be determined either with a pseudo-static method or with a transient dynamic analysis. The pseudo-static method applies the blast overpressure with an assumed distribution pattern around the tank wall and roof following the blast pressure-time curve and examining the dynamic response of the structure. This method is specified for example in [Ref 6]. The other option is to use commercially available computer software specifically designed to perform transient dynamic analysis. It allows accurate determination of the structure’s response to external explosion loads. The transient time-history of the explosion overpressure pulse and its effect on the tank structure can then be used to determine the maximum internal forces and displacement for the tank components during the event. As an example of a 3-D transient dynamic analysis, the tank deformed shape at various time steps determined using LS-DYNA FEA software is shown in Figure 1. The tank analysed was a 87m diameter concrete tank subject to an external explosion of 200 millisecond total pulse duration and a 30 kPa free field overpressure (shock type wave).

Table 1 FIRE TYPE

CONDITION

STEEL TANK

HIGH INTENSITY/ Short duration/low intensity No mitigation required SHORT DURATION OR LOW INTENSITY/ High intensity or significant Mitigation LONG DURATION FIRE duration HIGH INTENSITY / No Liquid Product Load Mitigation LONG DURATION Liquid Product Load Apply Mitigation

CONCRETE TANK

No mitigation required No mitigation required

No mitigation required Prestress system temperature shall stay low – likely needs mitigation

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TECHNICAL CRYOGENIC STORAGE TANKS

While the literature provides good guidance for the process of applying an external overpressure to a structure, the guidance on how to evaluate structural resistance and to choose appropriate acceptance criteria for steel and concrete tanks subject to external explosion is limited. The best guidance is provided in [Ref. 3], which is specific for petrochemical facilities. Table 5.B.1.A of [Ref. 3] provides classification for structures in a facility depending on the acceptable damage level. Further Table 5.B.1.B provides classification for response by individual structural components. Considering that RLG tanks typically store large volumes of flammable, combustible and toxic product, failure of either the entire tank or its individual component could significantly affect public safety. Therefore, RLG tanks are considered to be low allowable damage level structures and RLG tank components belong to the low response limit category. Tables 5.B.2 and 5.B.3 provide acceptance criteria for the low damage level steel and concrete structures. Steel tank components, such as wall and roof plates, structural stiffeners and roof framing, shall follow the low response limit criteria in Table 5.B.2 of [Ref. 3]. In addition, the stresses in roof plate fillet welds shall be within the fillet weld stress limits and the roof deflections shall be acceptable considering the attached roof platforms and piping. Concrete tank components shall follow the low response limit criteria in Table 5.B.3 of [Ref. 3] for both reinforced and prestressed concrete structures. In addition, the concrete structures shall meet ULS and SLS criteria specified in the standards addressing concrete RLG tanks [Ref 10]. The deflections of concrete roof shall also be kept to acceptable limits

PAGE 56

considering the platforms and piping. Furthermore, both the maximum and minimum internal pressures and the hydrostatic liquid load, when the outer tank in service is subjected to this load (e.g. single wall and membrane tanks), should be included in the evaluation. The analysis indicates that tension at dynamic rebounding combined with tension due to internal operating loading may govern the concrete structure design for external explosion. A peak free field overpressure of 70 mbar or less does not generally govern the design of steel tanks. It can be demonstrated that a short duration peak free field overpressure up to 250 mbar can be successfully accommodated by a properly designed steel tank. Concrete tanks not subjected to product hydrostatic loads can accommodate peak free field overpressures of 300 mbar or more without significantly influencing the design of the concreter tank. Generally, the acceptance criteria are established to maintain product and vapor containment to allow safe shut down of the tank. If the owner wishes to limit damages to the tank to only minor repairs, the criteria should be tightened. For example: • Steel tanks local plastic strains should not result in a global permanent set. • The stresses in concrete tank components should be limited. The stresses in reinforcing steel should not exceed 90% of the yield and compressive stresses in concrete 75% of concrete compressive strength to ensure that permanent damages are limited. PROJECTILE IMPACT Impact due to wind-borne projectiles is often considered in the risk assessment.

Industry [Ref. 9] provides guidance for typical wind-borne projectiles to be considered for the design. Other projectile shapes and sizes are also often considered in risk assessments and project requirements. Perforation is the main concern for projectiles impacting steel tanks. Typically, empirical formulas developed by Ballistic Research Laboratory (BRL) [Ref. 7] are used to evaluate perforation resistance of steel plates subjected to projectile impact. A factor of safety of at least 1.25 shall be applied over the calculated thickness required to resist perforation. It should be noted that BRL formula was developed assuming no stresses exist in the impacted target. If significant tensile stresses in the steel tank is expected due to hydrostatic loads (for example a single wall tank or an outer container of a membrane tank system) BRL formula may not be valid and special analysis may be required. Three following concerns shall be addressed for projectiles impacting concrete tanks: • perforation • penetration • scabbing. While many empirical formulae exist for projectile impact resistance of concrete structures, the equations in CEB Bulletin 187 [Ref. 8] are based on numerous testing performed in several European countries and consider many parameters including a wide range of projectile shapes, projectile velocity, concrete strength, percentage of reinforcement, and other parameters. As such, CEB Bulletin 187 has been found to be the most useful and appropriate for the evaluation of concrete structures. Perforation should be addressed for all concrete tanks. Due to the empirical nature of the equations, CEB Bulletin 187

TECHNICAL CRYOGENIC STORAGE TANKS Table 2 PROJECTILE PROJECTILE REQUIRED THICKNESS TO RESIST PERFORATION MASS VELOCITY

PROJECTILE DESCRIPTION

STEEL TK

25mm DIA Steel ball 150 Nominal DIA Pipe Sch 40 300 Nominal DIA Pipe Sch 40 100NB Valve (impact area based on Nominal pipe DIA) 350mm DIA Utility Pole 100x300 Wood Plank (3.5m long)

kg m/s 0.067 56 130 47 340 47 50 45 510 55 50 83

recommends that the concrete thickness required for perforation resistance shall be at least 15% greater than the calculated value. An additional 20% should be applied on the top of this value to comply with the tank industry standards [Ref. 10]. As an illustration Table 2 shows required thicknesses to prevent perforation from various often specified wind-borne rigid projectiles calculated using empirical equations discussed above for steel and concrete tank walls not subject to hydrostatic product load: Note that the required calculated thicknesses may vary depending on the shape of the projectile impacting area and angle of impact. Impact by large projectile (automobile, small airplane, etc.) will require special analysis taking into account both tank response and projectile stiffness. Concrete walls subject to hydrostatic product load during normal operation shall be also checked for projectile penetration. The purpose is to ensure that the projectile, while not completely perforating the wall, does not damage prestressing system, which is the main load carrying component. For example, NFPA 59A [Ref. 11] requires that a membrane tank outer concrete container wall, which is subjected to hydrostatic load during normal operation, be designed for any one tendon completely ineffective if the penetration depth exceeds the distance to the tendon from the tank outside surface. Concrete scabbing is breakage of concrete on the side of the concrete wall opposite to the side being impacted. [Ref 11] requires that scabbing be checked for tanks without an internal steel liner to ensure that any non-metallic vapor barriers and wall insulation are not getting damaged at impact. SUMMARY External hazards are important components of the risk assessment. External hazards often are not given the attention that they deserve.

There is a common misconception that concrete tanks are always required to resist external hazards. However, analyses indicate that properly designed steel tank can successfully resist significant external explosions and impacts from many typically specified wind-borne projectiles. Steel tanks can also resist a significant short duration fire without mitigation. However, they may require heat mitigation measures when exposure time to fire is significant. Therefore, steel tanks can provide safe and economical solution for RLG storage even if significant external hazards are identified by the risk assessment. Concrete tanks can handle significant thermal radiation without mitigation and may provide higher resistance to external explosions and projectile perforation than steel tanks. However, not all concrete tanks perform equally well under all hazards. The resistance provided by concrete tank to external hazards is very much dependent on whether the tank is subject to high loads during normal operation. When functioning only as a secondary container, concrete tanks can resist significant external loads without compromising overall containment. However, when the concrete wall service as the main load resisting component, much more attention is required as a reduction of the prestressing system capacity may result in the loss of product containment. Prestress and load carrying capabilities must be maintained for all expected external hazards. Such tanks may not be suitable for sites where the risk assessment identifies high level external hazards unless additional mitigation measures are provided. For more information: This article was written by Alex Cooperman, McDermott International’s storage business, CB&I Storage Solutions. Cooperman will be speaking in more detail about this subject at the Cryogenic Storage Tanks Conference in Munich on 22-23rd October.

CONCRETE TK

mm mm 0.9 29 16.0 434 15.7 506 11.7 316 24.0 678 15.5 383

References: 1. BS EN 14620-1: 2006 “Design and manufacture of site built, vertical, cylindrical, flat bottomed steel tanks for the storage of refrigerated, liquefied gases with operating temperatures between 0°C and -165°C. Part 1: General.” 2. “Tank Systems for Refrigerated Liquefied Gas Storage.” - API Standard 625, First Edition, Incl Addendums 1, 2, 3 3. ASCE Publication: “Design of BlastResistant Buildings in Petrochemical Facilities”, 2nd Edition, 4. “Structures to Resist the Effects of Accidental Explosions”, UFC 2-340-02, US Department of Defense, 2008 5. “Calculation of Blast Loads for Application to Structural Components”, EU Commission, JRC Technical Report No 32253-2011 6. GFS 34.95.00.10 “Full Containment LNG Storage Tanks”, Shell Group of Companies, Feb. 2017 7. “Design of Structures for Missile Impact”, Report BC-TOP-9A, Bechtel Corporation, 1974 8. “Concrete Structures Under Impact and Impulsive Loading”, CEB Bulletin 187, 1988 9. ANSI/ANS-2.3-2011 “Estimating Tornado, Hurricane and Extreme Straight Line Wind Characteristics at Nuclear Facility Sites” 10. ACI 376-11 “Code Requirements for Design and Construction of Concrete Structures for the Containment of Refrigerated Liquefied Gases and Commentary.” 11. NFPA 59A “Production, Storage, and Handling of Liquefied Natural Gas (LNG)”, 2019 Edition

01 Figure 1: Tank Deformed Shape at Various Transient Analysis Time Steps (deformations exaggerated 100 times for visualisation purposes)

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TECHNICAL HURRICANE PREPAREDNESS

HURRICANE PREPAREDNESS PLANS FOR STORAGE TERMINALS WITH hurricane season approaching, now is the time to develop a hurricane preparedness plan (HPP) to ensure the durability and functionality of exposed storage tank terminals. Developed by engineers, HPPs set forth specific action items designed to help storage tanks withstand the impacts of varying categories of hurricanes.Heavy rainfall and inland flooding, tornadoes, storm surge, tidal changes, and high winds can contribute to the failure of a storage tank. Careful forethought and mitigation can reduce the severity of all damage and adequately protect the integrity of a facility.

REFERENCES FOR AN HPP Various standards and guidance documents are used to evaluate storage tanks and provide recommendations for providing catastrophic failure. These include: • API 650: Welded Steel Tanks for Oil Storage; • API 653: Tank Inspection, Repair, Alteration and Reconstruction; • UL 142: Steel Aboveground Storage Tanks for Flammable and Combustible Liquids; • ANSI /AISC 360-10: Specification for Steel Structural Steel Buildings; and • ASCE Standard 7-10:Minimum Design Loads for Buildings and Other Structures. Region-specific guidance, including local emergency management guides, correspondence with the USCG Captain of the Port (COTP), and reference to existing facility plans may also be used to perform the analysis. National Oceanic and Atmospheric Association (NOAA) and the National Weather Service (NWS) are also important resources to consider. HOW TO DEVELOP A HPP The first step in assembling an HPP is to evaluate the facility completely. The geographic location will determine baseline factors that should be addressed in the plan. Local climatology, topography, inundation models, facility layout, storage tank design and placement, inspection history, and existing plans should be considered. With the initial analysis complete, the

PAGE 58

Saffir-Simpson scale is used to evaluate the risk to each storage tank at the facility. In preparation for a storage tank terminal’s encounter with a hurricane, a key point to consider will be the structure’s potential ‘failure modes’. The most common failure modes are overturning, roof uplift, sliding, tank shell compression, and buoyancy. These are primarily driven by high winds and flooding.With respect to wind, each category of hurricane is given an effective wind speed to calculate internal and external loads and anticipated damage. Inundation models associated with facility elevation will be reviewed to evaluate flooding.Additionally, flooding in the containment dike due to rainfall will also be evaluated to determine buoyant forces on each storage tank. HOW TO EVALUATE FAILURE MODES Assessing a storage tank for overturn requires evaluating the total horizontal and uplift pressure of given wind

speeds.These variables are used to calculate moment forces based on tank characteristics and configuration (for example, diameter, height, specific gravity of product, yield strength, and material thicknesses). Roof uplift is modelled by comparing the roof weight and shell connection to negative pressure resulting from hurricane-force winds moving over the structure.In particular, welded and bolted connections for fixed roofs and geodesic domes must be assessed to determine a tank’s vulnerability. Tank sliding is evaluated by comparing the horizontal force on the side of the tank and a given sliding coefficient provided in API 650 relative to the weight of the storage tank. Shell compressive is another failure mode that must be evaluated. This is mostly a concern for tanks currently under construction without a fixed roof or shell stiffener.Compressive failure is sometimes called ‘fish mouth’ due to curling at the top of the shell.It is also known as buckling, creasing, or staving.

TECHNICAL HURRICANE PREPAREDNESS existing anchors have been undersized or improperly installed, rendering them useless.

MITIGATIVE ACTIONS TO TAKE While there are many ways to protect the integrity of storage tanks, one of the easiest options is to fill the tank to a predetermined level to protect against damage mechanisms as identified above. These liquid levels are provided in feet of water or product stored to stabilize the tank during a hurricane.In this case â&#x20AC;&#x201C; specifically, when product is being used for stability â&#x20AC;&#x201C; risk and the consequence of failure must be considered to prevent unauthorized release to the environment. Storage tanks can be further protected with the installation of anchors and/or intermediate wind girders. The development and actionable items that result from an HPP can provide a terminal with protection from storms and peace of mind.Preventing catastrophic failure of a storage tank and the release of product to the environment is paramount for coastal operations of storage tank terminals.

For more information

To develop an HPP for these structures, the windward and leeward sides of the tank shell must be evaluated utilising equations provided in API 650. Tank buoyancy must also be considered. Tanks can float and move due to excessive rain in a containment dike and/or surge in coastal areas.When evaluating storm surge, inundation models are consulted to determine the surge for each hurricane category. Containment dike flooding is evaluated based on the dike depth and foundation height of the tank.In all cases, the weight of the tank is compared to the buoyant forces created by submerged structures of the tank. Other factors must also be evaluated

before providing recommendations for mitigating action or tank upgrades. In some cases, equipment may be in place to combat the effects of hurricanes. These include hold-down straps for horizontal tanks, anchorage for vertical tanks, and fixed roof configuration (such as aluminum geodesic, fixed steel, or external floating roofs).For most damage mechanisms, tank anchorage must be evaluated to combat the effects of hurricane effects.Where anchorage is designed and installed correctly, most of these effects can be mitigated or completely resolved; however, it is imperative to compare the stresses experienced during these events to the hold-down strength of the anchors. There have been numerous cases where

This article was written by Brian Lunsford, PE, Vice President at Pond & Company. Lunford manages the integrity group at Pond, which consists of pipeline integrity, mechanical integrity, corrosion control, and coatings programmes. He has over 20 years of experience managing and performing integrity related teams and projects. www.pondco.com

01 Sample inundation model 02 Overturn diagram 03 Tank sliding diagram 04 Shell compressive failure 05 Flooding of a tank terminal * Photos taken from presentation

PAGE 59

TECHNICAL INSPECTION

TANK BOTTOM LIFE, RISK-BASED INSPECTION AND CORROSION What it takes to implement corrosion prediction of tank bottoms INDUSTRY tank standards set limits on how long flat bottom tanks may be operated before being internally inspected [sidebar 1] based on tank bottom corrosion rates. But many companies are not collecting sufficient data or even the right kinds of data that would actually save them significant costs or even provide them with good optimal operating intervals. Moreover, without appropriate data collection, tank bottom life estimating methods such as ‘similar service’, ‘risk-based inspection’, and statistical methods cannot be properly used. The purpose of this paper is to deliver the following key points: 1. It is critical to collect the right kinds of corrosion data according to a formal protocol. 2. While linear corrosion rate theory may be used for tank bottoms, the corrosion rates are actually nonlinear with time. This provides an

SIDEBAR 1: Tanks typically have at least two kinds of important documented inspections. The simplest and easiest is the external inspection. This inspection assesses the condition of the tank without taking it out of service. Qualified, experienced, and certified inspectors use standard equipment examination methods such as visual inspection, ultrasonic testing, and other techniques to check the exterior and exposed components of the tank such as shell and roof, but they cannot inspect the tank bottom because of the liquid in the tank. The other kind of inspection is the internal inspection which requires that the tank be removed from service by draining the tank of liquid, cleaning and gas freeing the tank so that it is safe for personnel entry, and sufficiently clean to do a good job on inspection. Cleaning the tank and the internal inspection is the only way that a thorough and definitive inspection of the tank bottom can be made.

PAGE 60

opportunity for longer tank inspection intervals while decreasing risk. 3. Standards development organisations and corporate joint industry projects should sponsor data collection and assessment programmes that would allow for more accurately applying corrosion rates to increase the overall average inspection interval while at the same time reducing the prevalence of tank bottom leaks resulting from the current inadequate data collection methods and faulty methods being used. While one might think that inspecting more frequently than necessary is a good thing; it is not. [Sidebar 2]. An important constraint on the scope of this white paper is that it applies only

SIDEBAR 2: If costs and business interruption were no concern, would it be appropriate to do internal inspections on tanks very frequently such as once per year? The answer is no! Like many decisions in life there are tradeoffs. Taking petroleum tanks out of service generates large amounts of both liquid, solid and gas emissions. Taking them out too often means that the population of tanks must also be larger and the costs passed on to consumers increased. If a tank is taken out of service too infrequently, bottom leaks can develop and enter the ground and pollute ground water resources. If it is taken out too soon, then excessive air pollution results. Increased incidents due to damage mechanisms acting on the tank are also part of the costs of taking them out too frequently. The bottom line is that the best practice is to optimize the tank internal inspection interval and take them out only as often as absolutely necessary by balancing the chance of a corrosion hole and being too conservative on the inspection interval.

SIDEBAR 3: Stress corrosion cracking (SCC), also called environmental assisted cracking, is a common phenomenon for metals and alloys in contact with specific chemical solutions and temperature ranges. One of the most recent serious explosions involving SCC was the manufacture of NDK crystals used for electronic devices. Large pressure vessels containing silica and sodium hydroxide to grow crystals of quartz at high temperatures and pressures exploded on 12/7/09 and involved a fatality. Another common problem with SCC involves the storage of anhydrous ammonia in steel pressure vessels. The amount of water in the solution is critical to the ability of the steel to crack. Another common SCC incident involves austenitic stainless steel tanks, piping, and pressure vessels exposed to chloride containing solutions. When the temperature is somewhat above ambient temperature cracking though the wall thickness can occur in a matter of hours to days. The whole subject of SCC is highly technical and complex and surely in the domain of corrosion scientists and engineers who specialize in this topic. Fortunately, for flat bottom ambient temperature petroleum and petrochemical storage tanks, the problems with SCC have been minimal. However, there are some cases with storage tanks involving SCC. The most notable is fuel ethanol SCC. This corrosion mechanism has caused numerous tank bottoms and floating roofs to fail. The details are covered by API 939. There have also been rare instances of methanol SCC reported in refineries. But fortunately, today, the prevalence of ethanol SCC has been reduced by the action of corrosion inhibitors.

TECHNICAL INSPECTION

SIDEBAR 4: The topside corrosion in petroleum tanks is aggravated by sludge, coating failures, debris, water bottoms and scale that sit on the tank bottom. The presence of water is an important mechanism in corrosion. While crude oil tanks have large amounts of water bottoms with corrosive salts in them, even finished fuel tanks have some water on the bottom that settles out due to droplet coalescence. The environmental corrosion conditions vary widely on both the topside and the bottom side of the tank bottom. The diversity of corrosion in tank bottoms matches the diversity of the environment to which the bottom is exposed. There is a gradient of corrosion chemistry conditions on the underside because near the perimeter, water, moisture and salts can migrate under the bottom, but diffusion of these substances is progressively more difficult as we near the centre of the tank. Experience shows that there is often a band of ideal conditions where pitting and corrosion are maximised at some radius less than the radius of the tank, but not always.

LINEAR MODEL OF CORROSION SIDEBAR 5: API 653 corrosion rate is always less than the linear corrosion rate. It is actually not a corrosion rate at all but part of a larger algorithm to determine the inspection operating interval. It should definitely not be used for any statistical analysis or survival analysis as it will lead to erroneous conclusions and results. Instead, either use the standard linear corrosion rate methodology or else use the enhanced method involving the power law as described in part 2 of this paper. The two graphic panels show the definitions of the standard linear corrosion rate model and the API 653 model differences.

coexists with pitting and variable thinning. The maximum pitting corrosion rate is what usually causes a tank bottom hole and thus a tank bottom leak. On the soil side of the tank bottom, the conditions are also highly variable. There are some sites where the average corrosion rate over the life of the tank can be over 10 to 15 mils per year (mpy) and others where the corrosion rate is less than 1 mpy.

CORROSION

In most cases the length of the operating service interval is governed by the corrosion rate on the tank bottom (but not always and when damage in other components rises to a dangerous level, then a shutdown is required regardless of the tank bottom condition). This is because all of the nationally recognized recommended practices, guidelines and standards set the maximum interval allowed between the time the tank is inspected to the time that it must again be taken out of service for the next inspection based on the tank bottom corrosion rates.

A tank bottom is subject to both topside and bottomside corrosion. [sidebar4] Corrosion can be a mix of relatively uniform thinning but almost always

In this article we show how data should be collected for the purpose of more accurate modeling of tank bottom corrosion rates.

to ambient temperature tank bottoms of approximately ¼ inch thickness mild carbon steel in fuel and crude oil tanks. It does not address environmental stress corrosion cracking [Sidebar 3] such as that triggered by ethanol or other chemical environments that promote cracking. Finally, it applies to flat bottom tanks such as those constructed to API 650 or EN14015.

BASIC LINEAR CORROSION RATE DETERMINATION

API standards such as API 570 Piping Inspection Code or API 510 Pressure Vessel Inspection Code use a linear corrosion rate model. This model simply takes the metal loss divided by the time in service. In other words, corrosion thinning is proportional to time in service. A few important points: • The corrosion rate is measured at a fixed location both at the beginning and end of the service interval. It assumes that the service has been the same throughout the operating interval (i.e. storage of one type of product). Note that without initial information on the location and thickness of a component, the nominal thickness is often used. • The measurement of corrosion that is used for determination of the next internal inspection interval is based on the maximum depth of corrosion and some safety factor called the minimum remaining thickness (exception – see Sidebar 5). API 653 defines corrosion rate in the definitions this way, but then changes the definition to use the repair-to thickness for determination of inspection intervals. Either the linear corrosion rate or the power law corrosion rate should be used for any analysis where survival probabilities are applied such as for Risk Based Inspection, Similar Service, or simply tank bottom life estimates [Sidebar 5]. For more information: This article was written by Phil Myers, Founder of PEMY Consulting. Part 2 will explain how to model corrosion rates of tank bottoms when using Risk Based Inspection and Similar Service and will appear in the August/September edition of Tank Storage Magazine. Myers was past chair of the API Subcommittee on Aboveground Storage Tanks and a current member and his consultance supports the oil and gas industry with advanced engineering, modeling and risk assessment

DETERMINING THE NEXT INTERVAL #2

See Sidebar 5 for explanation

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TECHNICAL GEODESIC DOMES

MANAGING YOUR ALUMINIUM DOME ASSET In today’s world of uncertainty, it becomes very important to maintain and manage current assets. Geodesic aluminum domes are an investment within our oil and gas industry that protects the product in the storage tank and has a service life of 50 plus years with some maintenance along the way.

Photo courtesy of Diorca

WHAT is a geodesic dome? A geodesic dome is a site specific, structurally engineered dome roof composed from an integrated aluminum system of interlocking panels, extruded struts, gusset plates, batten bars and hubs. Why do I want a geodesic dome? One major reason is to seal the tank from the elements of nature such as rainfall and snow. Many open top tanks with carbon steel floating roofs have drainage issues with their roof drain systems in severe rain seasons, hurricanes and in severe snow seasons. Not having to worry about your roof drain system keeping up with the elements keeps your floating roof from sinking into the product. Other reasons are for the strength-to-span-ratio. This allows for a dome to span a large area without structural support columns, unlike a fixed cone roof. In today’s world

where storage for your oil & gas products has led to larger and larger storage tanks, a clear-span aluminum dome allows for the columns that would be required on a typical cone style roof to be eliminated. These columns are called out as emission points. By removing them your tank system gains emission credits. Emission loss is also prevented by covering an open-top EFR style tank. The dome prevents this loss by deflection of the wind over the top of the dome, eliminating the vortex effect of wind passing over the top of a floating roof. The dome’s ability to handle additional loads, such as cable suspending an aluminum internal floater from the dome roof, makes it possible to increase product capacity in a storage tank and provide tank maintenance benefits. This additional load of a suspended internal

floating roof is considered during the design phase of the dome, just like live, snow, wind and other loads would be evaluated. The removal of the internal floating roof legs enables the floating roof to be set at the lowest possible point inside a tank. By not having legs, you can set a maintenance roof level of 10-ft above the floor so that you can drive equipment in/out of the tank during out-of-service work. Also, by having an aluminum internal floating roof suspended with the dome, you gain greater storage capacity versus a typical carbon steel pontoon style floater due to the thickness of the internal floating roof and the requirements for the seal system height. Geodesic domes typically require less maintenance than a steel cone roof. Have you ever gone into a tank with a floater during inspection time and seen

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TECHNICAL GEODESIC DOMES

all the rusted material on your floater? This is from the rafter system and the underside of the steel cone roof plates. This corroded material accumulates on the secondary seal system and can create holes, ultimately causing emission leaks. One solution is the expensive and time-consuming task of sandblasting and coating the underside of the steel cone roof After taking the tank out of service. In addition, the top side of the steel roof must be sandblasted, repaired and coated to prevent corrosion-based breaching of the surface. Clear-span aluminum domes do not need to be painted for corrosion protection. Aluminum has a natural oxidation process that occurs, creating a thin layer of protection over time that will last the lifetime of the dome and most likely the tank. This is a major cost savings over the life of the storage tank, and it protects the stored product from UV and weather exposure.

How do I maintain a dome? An aboveground storage tank requires regularly scheduled preventative maintenance that will prolong your asset and keep it working correctly for your team. With a dome, we suggest an annual visual inspection from the platform. What is an inspector looking for during this visual?

• Note any customisations or modifications that have been done to the dome after it was originally installed. • Unattended damage or defects to the existing dome should be noted. If there is a leak pattern on the floating roof, it should be documented to help facilitate future repairs.

• Look at the flashing connections where the dome meets the top of the tank, to make sure they are secured properly, and all fasteners are present. • Look at the strut caps (batten bars) to see if there are any missing or loose screws. Is the gasket material fully compressed or wedged, is the gasket flexible/deteriorated? Is the gasket material missing? • Visually inspect the sealant. Is the sealant adhering properly to the material? Is the sealant properly and neatly tooled? Is there sealant at all joints/splices around the interfaces of appurtenances? • Visually inspect the hub covers to ensure they are present, sufficiently sealed, are there any dents or penetrations in them. • Note if any of the appurtenances are missing or damaged – circulation vents, hatches, skylights, etc. • Look at the mounting supports of the dome (dome shoes) and verify they are attached correctly.

Once all issues have been documented, a skilled contractor familiar with domes can suggest the proper repairs required to restore the dome as close as possible to its original condition. Beware of temporary fixes such as applying more sealant over the existing areas of sealant or covering with “flash band” style tape. These may temporarily remedy a leaking dome, but they do not offer a full cycle of protection and often require extensive cleaning or replacing of parts to properly get the dome back to a water-tight condition. If your dome has developed a leak, it is important to have an experienced dome contractor inspect and evaluate what is required to address the cause of the leaks and restore it to original condition. For more information This article was written by Vonda Lawson-Rosa, CST Industries, Inc. Call +1 844-44-TANKS, or contact inspectionservices@cstindustries.com

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PAGE 64

TECHNICAL CONSTRUCTION

INTEGRATING DESIGN, SAFETY AND CONSTRUCTION How to reduce construction accidents by implementing better safety measures during the design and planning phase

THE CONSTRUCTION industry faces two challenges that are usually considered separately: the lack of specifics, synergy, and effectiveness, between the safety planning and construction process; and the lack of concurrence between the design and construction process. This article integrates constructability and safety planning in a unique and simultaneous procedure. This is obtained by analysing construction details by means of building information modelling (BIM) that express and simulate the breakdown of project phases, chronologically processed and logically related. In these modellings, all the elements of the project are graphically placed. The procedure allows both to perform the specific and detailed safety assessment for the realisation of construction detail components, and to verify the constructability of them. The safety and constructability analysis is so performed in a graphical way during the design process, not waiting for the construction phase. So intervention by the designer is still possible, if necessary. THE USE OF BIM AS A PLATFORM FOR DESIGN EVALUATION AND REVIEW Building Information Modelling (BIM) and 3D visual medium can play an essential role in reducing health and

Such modelling allows designers to have a greater understanding of the hazards within the context of the terminal, exposing risks pro-actively, and ideally before building work has begun safety risks during design and through the project lifecycle. When reviewing typical orthographic drawings (2D elevation and sectional views) of designs, the complexity of the drawing can often hinder interpretation and the ability to visualise the design and identify potential risk. A 3D model provides an unambiguous view of the design and allows users to undertake a more subjective and focused assessment of the design in relation to its real world. Such modelling allows designers to have a greater understanding of the hazards within the context of the terminal, exposing risks pro-actively, and ideally before building work has begun. PLANNING PHASE The use of BIM techniques enables the project team to visualise the project

within the virtual environment, at each stage of development, integrating each contributor’s work into the model and enhancing communication among the different project stakeholders, such as the design team, contractors, operators and others that contribute to the planning process of a project. In particular, the use of BIM facilitates the early identification of site hazards enabling designers to eliminate or mitigate risks before physical work begins. Where it is not possible to remove hazards, workers can be prepared in advance, and appropriate controls introduced. Likewise, linking the digital model to a schedule adding the time dimension, and moving to 4D, allows the construction sequence to be rehearsed digitally and potential hazards identified. TESTING AND SIMULATION OF DESIGN SOLUTIONS BIM can be used to facilitate the testing and practice of design solutions. This allows potential solutions to be modelled, assessed, and compared against alternative solutions in terms of their relative benefits and risks. Augmented or virtual reality techniques can be used to build a site in a ‘safe’ environment, where risks can be explored without the danger of harm to workers or resources. When viewing 2D plans of projects, health and safety professionals with knowledge and experience will be able to identify

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TECHNICAL CONSTRUCTION issues and potential risks. However, interpretation can be obstructed by the complexity of drawings. 3D models remove the requirement for users to visualise the design themselves, and provide a usable and unambiguous visualisation of the design. This enhances the process, as well as allowing those who are unfamiliar with building plans to understand and discuss the project. During a recent valve pit design review, the 3D model was shown to a health and safety representative during a HAZID study who immediately pointed out that although hooped safety ladders and barriers were provided (Figure 1), a gated access point was necessary to further reduce safety risk (Figure 2). Using BIM and data-rich models as a tool to support design review and process safety reviews, infringements can automatically be identified by applying predefined rules based on component categorisation to identify the area of potential risk and aid risk management early in the design process. Experience has shown that the benefits of BIM during the planning phase include: • Design solutions can be configured and assessed without exposing workers to risk. • The benefits, risks and costs of different solutions can be compared. • Workers can gain a better understanding of the project and its requirements and can plan future activities more effectively. • 3D visualisation allows problems to be detected at an early stage in the project. • Clashes can be eliminated or mitigated quickly, reducing risk on site. • The model facilitates collaborative working and speeds up the rate of decision-making. • Workers are able to gain a greater understanding of the project and the intended sequence of works. • Workers can provide input to improve the project plan and reduce risk. • The viability of equipment, structures and infrastructure can be tested before being committed to. • Construction or installation sequences can be modelled and assessed in terms of viability. • Potential issues can be identified and steps taken to address or mitigate them. • BIM objects can be used in planning health and safety and logistics on site. CONSTRUCTION PHASE In all phases of a project, the use of BIM models allows for the data to be extracted and manipulated. At the construction phase, the BIM methodology allows the design team to construct a 3D model that represents the intended build PAGE 66

specification. This virtual representation allows the contractors to interrogate the model and see how the intended systems (piping, structural, mechanical, electrical, etc.) integrate, reduce conflicts and eliminate the need for costly changes. Identifying and fixing problems early, means fewer health and safety hazards once physical construction begins. CONSTRUCTABILITY REVIEW Constructability reviews focus on detecting construction risks and hazards and identifying ways in which to remove them. The use of 4D modelling as part of a constructability review assists designers in identifying risks and encourages them to consider and communicate how they intend their design to be constructed safely. Using the model for this review facilitated the group in detecting potential problems, and removed the requirement for the group to read large quantities of paperwork before discussing the design together. The early identification of hazards and mitigation strategies meant that issues could be addressed before construction started. BIM can also be used to check the viability of equipment and structures. Libraries of 3D object models, such as machinery, vehicles and constructions, are available to designers for inclusion in BIM models. Object information, such as weight and dimensions, is incorporated into these models. This information is embedded for the benefit of designers, and will definitely be of interest to other parties, such as health and safety professionals. CONCLUSION This article has briefly touched on a growing trend in designing for construction safety and its impact given the project delivery method chosen. Engineers, architects, owners and constructors must adopt a standard not centred exclusively on profits but rather on designer responsibility in the design of structures. This is achieved through enhanced means, methods and construction management oversight.

Regardless of the method used in evaluating the risk, it is often the input of the owner’s goals and objectives, project cost, delivery method, construction practices, building codes, design resources, and capabilities, training and education that greatly impact project design and cost. Construction management is proposed to impact greatly, the successful outcome of projects by assessing construction worker’s exposure to risk. This proactive approach will reduce injuries and reduce the cost of construction, which benefits all involved. Through these efforts of enhanced OSHA regulations, designers and constructor collaboration, training and education, information sharing, risk engineering and construction management oversight, there are no limitations of what can be achieved by the full integration of designing for construction safety. The cost of all these factors will impact the project budget and affect methods of construction; however, it will also significantly enhance and improve the health and safety of construction workers. Efforts made in the industry have significantly reduced or eliminated construction accidents by ‘engineering in’ better safety measures through the design and planning phase. Designing for safety has the potential to greatly reduce, if not eliminate construction worker injuries and deaths. For more information This article was written by Jaco Claasen (GradIOSH; MIIRSM; Pr. CHSM; ROSPrac), Health Safety and Environmental Manager at Chemie-Tech contact jaco@chemietech.com

01 Figure 1: Railing without gated access 02 Figure 2: Railing with gated access following a safety review of the BIM model

TECHNICAL MICROBIAL CONTAMINATION

MICROBIAL CONTAMINATION IN BIODIESEL STORAGE TANKS Gary Hickey, Specialist Fuel Divisions Director at Adler and Allan explains how a focus on testing and storage integrity is critical to ensure fuel isn’t contaminated

AS A result of heightened regulatory measures to decrease greenhouse gas emissions and reduce reliance on fossil fuels, the composition of the fuels used has changed dramatically in recent years. When these biofuels come into contact with water, microbial contamination can occur in the tank. MICROBIAL CONTAMINATION Traditionally when straight hydrocarbon fuels were used, you could have a tank that was 50 years old and never been cleaned out, and as long as that suction point – the point where the fuel leaves the tank – was above where the water and sludge was sitting, there would be no issues at all. But when biofuels were introduced in 2006 a lot of those tanks started to fail. The reason was, when these biofuels came into contact with water, they created a microbial contamination in the tank – microbes such as bacteria and fungi that

PAGE 68

live in the interface between the water and fuel cause havoc to both the performance of the tank and the fuel itself. Microbial contamination of diesel fuel occurs when water finds its way into a tank as a result of condensation, rainwater penetration or from the air. Modern biodiesel is especially hydroscopic, attracting and holding water molecules from the surrounding environment. The presence of water encourages microbial growth which either occurs at the interface between the oil and water or on the tank walls. This kind of contamination not only accelerates tank corrosion, it can block lines and filters and significantly reduce the performance of the fuel itself. Biodiesel is made by reacting vegetable oil with other common chemicals. The bugs love vegetable oil, they feed off it and multiply very quickly, and this can be a particular issue to tanks with a low turnover of fuel.

DEGRADED FUEL QUALITY Because biodiesel absorbs a lot more water than diesels of old, it can lead to significant degradation in fuel performance and usability if not managed properly. Once microbial contamination starts it can grow very quickly. From one year to the next you can have a clean bill of health to heavily contaminated fuel. If microbial contamination does occur, thankfully all is not lost. Experts can identify the sources of infection and, if an issue is found, uplift the fuel, add bacterial additives and employ fuel polishing techniques to remove infected material and return the clean fuel to the tank. Some operators have mobile fuel polishing and tank cleaning units which can be brought to your site meaning there is no need for de-gassing or fuel removal. Fuel is pumped through the cleaning unit and back into the tank in one continuous, safe and efficient process.

TECHNICAL MICROBIAL CONTAMINATION a new steel tank could fail in less than seven years. During the fuel polishing process, the tank should also be cleaned, and sludge, water and microbes removed, so the polished fuel will remain in the best possible condition when it is returned. The key to all of this is how seriously you look after your storage tank. Biodiesel is a breeding ground for micro-organisms that will affect the oil and damage the tank. A FOCUS ON INTEGRITY IS CRITICAL Every time you put a new load of fuel through a tank, it’s adding another contaminant, but all of this can be avoided if you’re checking your fuel regularly and making sure it is water free.

A MAINTENANCE NIGHTMARE With even small amounts of water in a tank system, reformulated fuels can create a maintenance nightmare such as biological activity, increased corrosion, blocked filters and lower pump flow rates. Testing has therefore evolved from a best

practice discipline to a critical part of the tank maintenance process. Investing in remedial work should now be essential to your operations, especially when you consider microbial induced corrosion can accelerate tank corrosion by as much as 1mm per year, meaning

The best course of action is prevention. Experts like Adler and Allan provide regular fuel testing through our UKAS accredited laboratory, together with tank maintenance services, because an absolute focus on integrity has never been more critical for today’s tank storage sector. For more information: www.adlerandallan.co.uk

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PAGE 69

EVENTS iTANKS INNOVATION

INNOVATION ENCORE There was a lot to see in the iTanks Innovation Zone at this year’s StocExpo Rotterdam in March. Together with a group of partners from the iTanks network, the zone was packed with novelties for the tank storage industry. For those who could not come to the innovation zone, here is a recap of what you missed: iTANKS is a knowledge and innovation platform for the portrelated industry, an industry with a high innovation potential. The platform connects companies, knowledge institutes and industry experts with each other and introduces these parties with new technology and the latest innovations from within and also outside the sector. iTanks has its roots in the tank storage industry. Over the last eight years, the network expanded to over 140 partners and many more contacts. The goal for the organisation is to help companies to innovate and to do so iTanks connects them, shows novelties and helps to start, finish and sometime finance projects. At this year’s Stocexpo iTanks hosted the Innovation Zone, where a group of partners displayed their innovations: Antea Group showed Antea Group Insights (AGI). This is a geo-informationbased asset management system that tracks the progress and results of (required) inspections, therefore tracking compliance to relevant safety regulations. AGI connects each asset with relevant surveys based on the specific requirements for that asset. The surveyor inspects the assets using a mobile device. Data is visualised in an interactive dashboard, where the status of inspections, assets and subsequent defects is visualized in real time. AGI is brought to you by Antea Group and ESRI Nederland.

Brand Energy & Infrastructure Services showed their patented H-frame tank scaffolding system, which is perfectly suited for work on tank walls. The slim 0.73m wide scaffold can be quickly and above all safely built around any tank regardless of diameter. The lightweight parts in combination with the safe assembly method provide a significant improvement in the erection and dismantling time, up to twice as fast compared to conventional systems. eWorks promoted safe work environments through innovative learning solutions at the innovation zone. The company continuously raises the bar in safety culture by improving knowledge, awareness and behaviour. For that, their products consist of e-learning, quizzes, tests and a new and improved Safety App. At Stoc Expo they showed that their innovative tools are customizable to the client’s requirements and foster optimal employee engagement. Gemba delivers complete IOT solutions and Asset & Service Management system implementation. At the Innovation Zone they shared their best practice for Dana Petroleum. This is an oil and gas in Europe, Africa and the Middle East. Dana’s goal was to have ownership and control of the Work Management System and no longer be dependent on the external service provider’s processes. The company was looking to standardise an enterprise-wide system across its business locations. Gemba helped Dana in getting the right

PAGE 70

information to the right people at the right time to make and implement decisions to drive safety and reliability for Dana’s assets was paramount. ITIS-Tanktesters developed an innovative test method for determining opening set-pressures and inspecting ERV and PVRV valves, according PGS 29 directive which they showed at the innovation zone. This procedure makes it possible to test these valves on the tank during operation. It goes without saying that this method entails enormous cost savings compared to current used methods. This implies that lead time and safety risks can be greatly reduced and mobile cranes are no longer needed in the plant. Qlayers showed how to make storage tank coating processes more efficient, consistent, environmentally-friendly and safe. Its robot moves vertically along the

EVENTS iTANKS INNOVATION

outer surface of a tank with consistent speed, coating the tank in a smooth and fast way without any overspray. In addition, the robot performs automated quality control on every position of the tank, resulting in consistent performance that allows to predict degradation better. Roodhart Group, a rotating equipment supplier, promoted its experience and expertise in the supply and maintenance of industrial and marine pumps, mechanical seals. Its double balanced mechanical seals together with 53B sealing systems ensure an environmentally safe and reliable operation. Roodhart also noted that its team of experts is available 24/7 to provide fast, efficient tailor-made solutions to minimize operational downtime. Roodhart is IECEx03 (ATEX), ISO, VCA certified and Achilles compliant. Smartflow showed its No & Low Code platform which is aimed at creating mobile solutions for the oil, gas & petrochemical industry. This allows users to digitize critical processes and workflows in the areas of inspection, maintenance and safety. Examples of such workflows are operator rounds, punch lists, and ATEX inspections. The platform already has several customers that are satisfied with increased efficiency, cost savings, and increased control over their workflow and data.

Widget Brain exhibited how they can automate your maintenance scheduling. They offer AI driven automation to maximise machine performance, uptime, compliance and safety within your budget and time constraints. To do so, they digitise the customers machine knowledge by linking data patterns to the root cause of machine faults, diagnose faults in real-time and predict RUL to automate decision-making on what has to be done when and where. The services are directly plugged into your EAM systems to support easy integration and designed for scale to maintain accuracy and quality of schedules. Yokogawa presented its new integrated IIoT ecosystem ‘JOIN . This is an open, collaborative IIoT platform that offers a complete value chain from consultancy, data collection, connectivity, cloud, predictions and dashboards; offering a complete solution for predictive maintenance. Achieving co-innovations in major ports. This is Yokogawa’s

approach to developing the tank terminal of the future. The tank storage industry may be a characterised as a conservative industry. However, the iTanks Innovation Zone at Stocexpo Rotterdam was packed with new ideas and new tools and technologies. Most of these are proven technologies ready to be used for safer, more efficient and more durable assets.

01 Antea Group’s geo-information-based asset management system 02 Brand energy’s patented H-frame tank scaffolding system 03 eWorks dedicated and customisable learning solutions 04 Qlayers coating robot solution close-up 05 Smartflow digitises critical processes and workflows 06 Roodhart maintenance and test facility 07 Widgetbrain AI tool to maximise performance

PAGE 71

AT THE BACK ADVERTISERS INDEX & SOCIAL STORAGE

ADVERTISERS INDEX ADIPEC.................................................................................50

ESS Engineering............................................................... 33

Nordic Storage ..................................................................13

Adler and Allan...................................................................10

FETSA................................................................................... 53

Parker and Son Inc............................Outside Back Cover

API Storage Tank Conference and Expo .................. 49

Flat Bottom Storage Tanks 2020............................... 67

Protego..................................................................................31

ATEC Steel.......................................................................... 45

Great River Industries.....................................................44

Rosen.......................................................................................3

AUMA..................................................................................... 11

HMT.................................................................................24, 25

Scully.................................................................................... 52

Brodie....................................................................................17

ILTA.........................................................................................41

Spilltration Products..........................................................7

Cashco...................................................................................14

Koerting ...............................................................................15

StocExpo............................................................................. 42

CCC Group..............................................Inside Front Cover

Matrix Applied Technologies...........................................5

SUMA.....................................................................................16 Tank Farm............................................................................46

Channoil Consulting.........................................................18

Midwest Steel.....................................................................12

CTS Industries...................................... Front Cover, 20, 21

Milton Roy Mixing............................................................... 9

Tanks and Terminals 2020............................................ 62

EEMUA.............................................................................. 8, 19

Noon Advisory ..................................................................64

TEPSA...................................................................................40

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PAGE 72

EVENTS 2020/2021 CALENDAR

EVENTS 2020/2021 18th – 19th August 2020

Media Partner UKIFDA EXPO 2020 Liverpool, UK Now in its 40th year, UKIFDA (formerly FPS) Expo 2020, organised by liquid fuels trade association UK and Ireland Fuel Distributors Association, regularly brings together more than 100 exhibitors and attracts a worldwide audience of thousands. www.ukifda.org/ukifda-expo

24th – 26th August 2020

Official Media Partner 2ND ANNUAL TANKS & TERMINALS 2020 Dubai, UAE www.marcusevans.com/conference

8th – 10th September 2020

Media Partner GASTECH EXHIBITION & CONFERENCE Singapore Expo, Singapore www.gastechevent.com

12th – 15th October 2020

Media Partner API STORAGE TANK CONFERENCE Nashville, Tennessee www.api.org

22nd – 23rd October 2020

Official Publication CRYOGENIC STORAGE TANKS Munich, Germany www.tuvsud.com

16th - 18th November 2020

Silver Sponsor 40TH INTERNATIONAL OPERATING CONFERENCE & TRADESHOW Houston, Texas Celebrating 40 years of bringing the liquid terminal industry together the ILTA offers unparalleled opportunities for terminal operators and vendors alike. The 2020 conference speakers will examine strategies for improving operational efficiency, promoting worker safety, managing terminals and achieving regulatory compliance. www.ilta.org

16th – 17th September 2020

Official Tank Storage Publication CHEMUK 2020 Manchester, UK The ChemUK Expo & speaker programme brings together the UK’s industrial chemicals, biochemical, chemicals processing & chemical product formulation industries. www.chemicalukexpo.com

9th – 12th November 2020

Media Partner ADIPEC Abu Dhabi National Exhibition Centre, Abu Dhabi, UAE www.adipec.com

24th – 25th November 2020 30th Sept – 1st October 2020

Media Partner 8TH EUROPEAN BULK LIQUID STORAGE SUMMIT Cartegena, Spain www.wplgroup.com/aci/events

Official Publication INTERNATIONAL CONFERENCE ON FLAT BOTTOM STORAGE TANKS Munich, Germany www.tuvsud.com

8th – 9th December 2020

16th – 18th March 2021

Official Publication STOCEXPO Antwerp, Belgium StocExpo is the largest and longest running event for the global tank storage industry. As the number one meeting place for anyone involved in tank storage for over 15 years, StocExpo is the ideal event to help you stay ahead of the competition, network and gain new business. www.stocexpo.com 23rd – 24th March 2021

BIOFUELS INTERNATIONAL EXPO AND CONFERENCE Brussels, Belgium www.biofuels-news.com/conference

11th – 13th May 2021

Media Partner CANADA GAS & LNG EXHIBITION & CONFERENCE Vancouver, Canada www.canadagaslng.com 17th – 18th June 2021

Official Publication PGLC 2020 Barcelona, Spain www.pglc.biz

23rd September 2021

Media Partner TANK STORAGE ASSOCIATION Coventry, UK www.tankstorage.org.uk

September/October 2021

Official Publication FETSA AGM & ANNUAL CONFERENCE Rotterdam, the Netherlands www.fetsa2020.eu

VIRTUAL EVENT – October 2020

Media Partner 54TH ANNUAL EPCA MEETING www.epca.eu

Media Partner NISTM WOODLANDS Texax, US www.nistm.org

Keep up to date with event date changes due to the ongoing COVID-19 pandemic www.tankstoragemag.com

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Serving The Petroleum Industry with The Following Services: • Complete Turn Key & Design Build • Fuel Terminal and Refinery Process Construction or Repair • Oil & Gas Pipeline Construction, Repair, & Maintenance • ASME “S”, “U”, “R” Certified • NCCER Craft Instructors, Proctors & Testing Center • NCCER Crane, Rigging & Signal Person Examiners • Pipeline Anomaly Verification Digs • API 650/653 Tank Construction & Repair • Tank Bottom & Dike Liners • Tank Cleaning • Terminal Refinery Construction & Maintenance

• • • • • • • • • • • • •

Pipeline & Tank Coating Civil & Concrete OSHA Compliant Critical Lifts Custom Process Skid Design & Fabrication Mechanical Welding: Pipe Fabrication & Structural Steel, either in shop or on site Major Pipe Manifold Fabrication & Construction Electrical, Instrumentation & Controls (EI&C) Hydro Testing/NDE Military/Aviation Services Fully Certified Engineering & Drafting 3D Facility Laser Scanning using “point cloud” technology from Leica Utility Locating and Hydro-excavation Custom Design (Fixed or Portable) Gas Detection Systems

Parker & Son, Inc. was established in 1991 by Frank and Brian Parker as a mechanical maintenance service General Contractor serving the petroleum and heavy industrial plants for over 25 years. We are fully licensed, insured and bonded throughout the U.S.A. We pride ourselves on being a reliable, high quality and safety focused company. Management and field personnel are trained to satisfy the requirements of OSHA, HAZWOPER, USCG, DOT, as well as, site specific standards and procedures required by the client. As an NCCER Accredited Training Sponsor & Assessment Center, We provide quality training an assessment to meet your needs either at our Training Center in Atmore, AL, or we can come to you anytime, anywhere. Staff from our team of quality professionals come from all sectors of the petroleum, industrial, structural and heavy construction industries. Their work history and training includes formal engineering, project management, estimating, site supervision, trade school certification, industry accreditation and on the job training from the ground up. Parker & Son is a Drug Free Environment. We have satellite offices throughout the southeast and our corporate office is in Atmore, AL. Feel free to contact anytime at 251-368-3737 or by email at sales@parkerandsoninc.com.

PH: 251-368-3737