International challenges and possibilities

WORLD NEWS

A selection of the latest news hitting the headlines on www.tanksterminals.com...

Construction commences at the IOR Lytton Terminal

IOR has announced that construction has commenced at the IOR Lytton Terminal to deliver 110 million l of new diesel storage to the market in Brisbane, Australia. Taking place in the Port of Brisbane precinct, the project involves repurposing IOR’s existing 50 million l crude oil storage tank for diesel fuel storage and constructing two new tanks with combined capacity of 60 million l.

CB&I named tank contractor for Venture Global’s LNG project

McDermott’s storage business, CB&I, has been awarded a contract by Venture Global for two 200 000 m3 LNG storage tanks as part of the first phase of the Plaquemines LNG export project.

VARO Energy and GPS Group complete integrated biofuels facility

VARO Energy Group and GPS Group have announced the successful completion of a new railway line and ethanol storage tanks at the Port of Amsterdam, the Netherlands. This new state-of-the-art infrastructure is one of very few rail facilities that enable the movement of traditional fuels and bio products in the ARA-region.

TotalEnergies acquires BP’s retail network in Mozambique

TotalEnergies is expanding in Mozambique with the acquisition of BP’s retail network, wholesale fuel business and logistics assets.

DIARY DATES

13 - 15 April 2022

24th Annual International Aboveground Storage Tank Conference & Trade Show

Orlando, Florida, USA www.nistm.org

23 - 25 May 2022

StocExpo

Rotterdam, the Netherlands www.stocexpo.com

13 - 15 June 2022

ILTA International Operating Conference & Trade Show

Houston, Texas, USA www.ilta.org

05 - 08 September 2022

Gastech

Milan, Italy www.gastechevent.com

10 - 13 October 2022

API Storage Tank Conference & Expo

San Diego, California, USA events.api.org/2022-api-storage-tank-conferenceexpo/

18 - 20 October 2022

AFPM Summit

San Antonio, Texas, USA www.afpm.org/events

06 - 07 December 2022

15th Annual National Aboveground Storage Tank Conference & Trade Show

The Woodlands, Texas, USA www.nistm.org

READ MORE...

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tanksterminals Tanks and Terminals

Gordon Cope, Contributing Editor, examines the obstacles faced by the energy sector across Europe and the Middle East, and the opportunities available to the tanks and terminals market moving forwards.

The woes that beset the world’s energy sector are multitude: resurgent COVID-19 in Asia, wild weather in the Gulf of Mexico, tardy gas supplies from Russia, as well as gyrating oil prices. Their cumulative effect is changing the landscape in both Europe and the Middle East, forcing energy suppliers to respond, with inevitable consequences for tanks and terminals.

Europe

The hangover from COVID-19 demand-destruction continues in Europe. ExxonMobil permanently shuttered its Slagen refinery in Norway during summer 2021, converting it to a fuel import terminal. In the Netherlands, Gunvor closed two crude processing units in Rotterdam and suspended its refinery in Antwerp. Galp is closing its Porto refinery in Portugal and will decommission and decontaminate the site. Neste has discontinued operations at its Naantali refinery in Finland, converting the plant to a terminal.

Biofuels offer a glimmer of hope, however. Total shut its crude processing unit at the Grandpuits refinery in France, converting it into a biofuel complex. Eni, which has already converted two refineries to biofuel, is now evaluating its Livorno refinery in Italy, with the aim of reaching 2 million tpy of biorefining by 2024.

In natural gas, Europe has been beset by parlous shortages since the fall of 2021, causing prices to rise dramatically. In December 2021, UK gas prices surged to an all-time high of £3.50/therm (approximately US$46/1000 ft3), up over 500% from the beginning of the year. While the causes range from unexpected resurgence in post-COVID-19 demand, to events in Russia, a key culprit has been the drop in storage capacity, especially in the UK. A decade ago, storage companies did trade in the price spread between winter and summer gas, covering the storage fees and making a profit. As the availability of LNG in the US cut into European hub prices, however, companies across the continent wrote down over €1 billion in facilities. In the UK, Centrica closed the Rough gas storage facility in the North Sea (which held over 3.3 billion m3), significantly paring reserve capacity from 24 days to approximately 10 days.

Efforts to increase gas availability in Europe by building new LNG terminals are encountering obstacles. In December 2021, Vopak announced that it was stepping back from active involvement in developing the Brunsbuettel import terminal, located near Hamburg, Germany. It was initially expected to be operational by the end of 2022, but environmental permits are forcing delays, pushing the estimated start-up back to 2025.

Hydrogen

Hydrogen has become a hot commodity in recent years because it has great potential to reduce the carbon footprint in refineries, heavy industry and transportation. The gas has a high energy density and can be produced using electrolysis

powered by renewable resources; when it is burned, the only emission is water.

PriceWaterhouseCoopers (PwC) noted in a 2020 report that green hydrogen exports could be worth US$300 billion/yr by 2050, supporting 400 000 jobs globally.1

BP has announced ambitious hydrogen plans for the UK’s Teesside port. In addition to a blue hydrogen project, it now aims to build a green hydrogen plant that will use renewable sources. HyGreen Teesside will have the potential to deliver 30% of the UK’s 2030 target for hydrogen production. Ineos, a UK-based chemicals company, also announced plans to invest US$1.37 billion in its Grangemouth refinery to produce blue hydrogen for export. “This will include capturing CO2 from existing hydrogen production and the construction of a world-scale carbon capture enabled hydrogen production plant”, noted the company.

In September 2021, the port of Rotterdam and DeltaPort Niederrheinhäfen joined forces to create a regional import hub to supply industries in the northern Ruhr area of the Netherlands with green hydrogen. Potential clientele include Thyssengas, energy company Eon, and cold-store operator Nordfrost.

In November 2021, Shell and Norsk Hydro announced a joint effort to produce hydrogen from renewable electricity with the goal of decarbonising operations and supplying heavy-industry and transport customers. The companies are now identifying European locations to produce gas using large-scale hydrolysis plants.

In December 2021, Spain’s government announced that it would spend €7.8 billion on renewables, green hydrogen and energy storage over the next two years, with the aim of attracting a further €9.45 billion in private funding. Approximately €1.55 billion is to be allocated toward the development of green hydrogen through the country’s abundant sun and wind, with the goal to supply 10% of the EU’s target output by 2030. The rest would go toward smart-grid infrastructure, energy storage, training and research.

Additionally, in December 2021, Rolls Royce announced that its container terminal, currently under construction in Duisburg, Germany, will be partly powered by climate-neutral energy supplied by its latest hydrogen technology. The port, located at the junction of the Rhine and Ruhr rivers, is the largest inland terminal in the world, annually processing 20 000 ships and 25 000 trains for the 30 million nearby consumers, as well as iron, chemical and steel industries. Rolls Royce fuel cells and hydrogen heat and power will supply peak load coverage for docked ships and related terminal needs. The four-year project is being funded by the German Federal Ministry for Economic Affairs and Energy as part of the government’s Hydrogen Technology Offensive.

All of this spells significant opportunity for new tanks and terminals; while hydrogen can be partly mixed and transported using existing natural gas networks, pure hydrogen causes brittleness in regular steel and requires dedicated infrastructure.

Middle East

Egypt’s energy sector is on a roll. Over the last six years, 38 trillion ft3 of gas has been discovered, with the giant offshore Zhor gas field pumping 2.7 billion ft3/d. Two LNG trains and related export facilities at Idku and Damietta have been recommissioned with the intent of shipping gas to Europe and Asia. The country has grand designs to become a regional energy hub, with plans to build terminals to receive Middle East oil and tranship it to Europe.

In September 2021, Brooge Petroleum and Gas Investments commissioned its Phase II storage facility in the UAE port of Fujairah. Located on the Gulf of Oman, Fujairah is connected to Gulf oil production via a 1.8 million bpd crude pipeline. The second phase adds 600 000 m3 of storage, bringing total capacity to 1 million m3, or 6.3 million bbl of crude. The move is part of efforts by the UAE and the US to expand total storage capacity to 17 million m3 by 2025 (approximately 100 million bbl of crude), in order to counter Iran’s threat to disrupt supplies flowing through the Strait of Hormuz chokepoint. In addition to storage expansion, the port has also built jetties to accommodate very large crude carriers (VLCCs).

Saudi Aramco is one of the world’s largest producers of grey hydrogen, primarily for upgrading crude. A major focus will be to capture the carbon emitted during the production of grey hydrogen and sequester it in order to create blue, or carbon-neutral, hydrogen. In addition, Saudi Arabia’s ACWA Power Corp. and US-based Air Products & Chemicals have entered into an agreement to construct a US$5 billion plant in the desert city of Noem to produce green hydrogen through the use of solar-powered electrolysis. Egypt said it would invest up to US$4 billion in a project to create hydrogen through electrolysis powered by renewable energy.

In order to maintain its dominant position in the LNG market, Qatar has announced plans to increase its current capacity of 77 million tpy to 126 million tpy by 2027. It is entertaining overtures from supermajors (Shell, Eni, Total, ExxonMobil and others), eager to participate in the development of the supergiant North Dome field, a 6000 km2 (along with Iran’s 3700 km2 South Pars portion) trap holding at least 1800 trillion ft3 of gas and 50 billion bbl of gas condensates. The world’s largest non-associated gas field allows Qatar to expand its capacity by 64% without compromising withdrawal rates. The country, which has the lowest breakeven point for LNG, has signed major deals with the Chinese to take significant amounts of the new capacity.

For the last several years, Oman has been proceeding with the Duqm project, a massive development of refinery and petrochemicals, located in the port of Duqm on the Arabian Sea. The project includes the 230 000 bpd Yousuf Al-Jahdhami refinery, set to come online in 2023, as well as a planned Liwa Plastics Project (LPP), which will produce 900 000 tpy of ethylene for use in high-density polyethylene and polypropylene. As part of the development, the nearby Ras Markaz Oil Storage Park will have an initial capacity of 26.7 million bbl when it opens in 2022, with plans to increase capacity to 200 million bbl. The majority of Duqm’s output is earmarked for China; billions are being spent to expand the ports export terminals.

The long-awaited development of a world-class container port at Al Faw in Iraq finally began in August 2021, with the laying of a ceremonial cornerstone by Prime Minister Al Kadhimi. South Korea’s Daewoo Engineering and Construction has been contracted to build five unloading berths and a container yard. When completed in 2024, the US$9.6 billion project will be able to handle 3 million containers annually.