Latest storage news
Vopak has announced it will expand its chemical terminal in Indonesia, invest in its Rotterdam, Antwerp and Singapore terminals and conduct a strategic review of its terminals in Algeciras, Amsterdam, Hamburg & Tallinn.
In its half year 2018 report, the company made a series of announcements on various terminals across the globe.
It will expand its chemical terminal in Merak, Indonesia with 50,000 m3 to 131,000 m3 of capacity. Merak is the main chemical import port of Indonesia and has the highest concentration of petrochemical facilities. The expansion is expected to be commissioned in the first quarter of 2020.
Vopak will also invest in its Europoort terminal in Rotterdam, the Netherlands, to support the IMO 2020 sulphur fuel cap. This investment is supported by customer commitments and will be completed in the second half year of 2019.
Additionally, it will strengthen its chemical storage globally by investing in a new jetty at Vopak Terminal Linkeroever in Antwerp, Belgium to enable planned future growth. Also, a major service improvement project will start at Vopak Terminal Penjuru in Singapore to service the chemical market in the country.
The company will also conduct a strategic review and 'test the market value' of its terminals in Algeciras, Amsterdam, Hamburg and Tallinn.
The company reports an EBITDA of €371 million compared to €394 million in the same period of 2017. Its occupancy rate of 86% is attributed to lower rented capacity mainly at the oil hub terminals caused by a less favourable oil market structure. Other product market segments showed continued stable demand for storage services.
The financial performance in 2018 is expected to be influenced by currency exchange movements of primarily the US dollar and Singapore dollar, and the currently less favourable oil market structure, impacting occupancy rates and price levels in the hub locations.
Its expansion programme for 2019 will add 3.2 million m3 with high commercial coverage and the company projects it has the potential to significantly improve its 2019 EBITDA results.
CEO Eelco Hoekstra says: 'Given the market conditions to date, the results delivered are satisfactory.
'We have successfully gone live with our new digital terminal management system in Long Beach and Los Angeles marking the start of our global roll out.
'In our oil hub terminals, the priority was to invest for the IMO 2020 bunker fuel regulations. Our terminals in Fujairah, Rotterdam, and Singapore will be fully ready to support new market requirements.
'In Saudi Arabia, together with our partners, we commissioned the last part of the industrial terminal Chemtank. The construction of our new industrial terminal in Pengerang is progressing well and first commissioning will take place end of 2018.
'Our business development efforts in gas terminals have seen excellent progress. We announced the entrance in the growing LNG market in Pakistan, and the signing of two new joint ventures to develop LNG terminals in Germany and China.
'In total, we currently have more than three million m3 under construction. We find this the natural moment for a strategic review and test the market value of our terminals in Algeciras, Amsterdam, Hamburg and Tallinn. This review is full in line with the focus on growing our portfolio with the four strategic terminal types (major hubs, gas & LNG, industrial terminals, distribution in major markets).'
Oil product stocks at the Middle East's key oil hub of Fujairah slipped another 2.5% in the week to Monday, hitting a new 10-week low, despite a jump in middle distillate inventories.
Total oil stocks were 17,665 million barrels, down 449,000 barrels from a week earlier, according to the Fujairah Energy Data Committee.
Stocks of middle distillates jumped 20% to 3.521 million barrels, the highest since last August.
Middle distillates appear to be gaining momentum as the crack for Singapore gasoil against Dubai rose to a 12-week high of over $16/b, S&P Global Platts Analytics said Wednesday.
Indian gasoil exports remain strong, but should decline in the fourth quarter as the end of the rainy season leads to an upturn in domestic demand, Platts Analytics said.
At the same time, stocks of heavy distillates and residues fell 10.2% to 9.293 million barrels. Fujairah continues to see healthy bunker demand, with suppliers citing steady buying inquiries in recent days.
Delivered 380 CST bunker prices in Fujairah have averaged $8.40/mt below Singapore so far this month. Meanwhile, utility demand for fuel oil in the Middle East has shown signs of tapering off as summer draws to a close. Kuwait Petroleum recently issued a sell tender and Pakistan State Oil has reduced its HSFO requirements for September.
But Saudi demand is reportedly still pulling in European cargoes, Platts Analytics said.
Light distillate stocks totalled 4.851 million barrels, edging up 0.4% from the year's lowest total last week.
Petrol sentiment appears to be diverging somewhat in the east of Suez. Premiums for Arab Gulf RON 95 petrol were down to a seven-week low of $3.50/b, although there should be continued support from regional demand. State-owned Egyptian General Petroleum and KPC were both seeking September petrol cargoes.
By contrast, Singapore premiums have climbed in recent days, boosted by Indonesia's buying for September. Indonesia is expected to import some 11 million barrels of petrol in September, up 1 million barrels on the month.
ArcLight Capital Partners has acquired Midcoast Operating from Enbridge for $1.1 billion, including pipeline, processing plants and storage assets.
Midcoast consists of three large, legacy gathering and processing systems in Texas and Oklahoma, a long-haul NGL transmission system delivering NGLs from multiple supply areas and a marketing and logistics business.
The assets include 11,900 miles of gas and NGL pipelines, 25 processing plants with over 2 billion cubic feet per day of capacity and 12 treating plants, an E/P fractionator and numerous liquid logistics assets, including storage terminals.
Dan Revers, founder and managing partners of ArcLight, says: 'We believe Midcoast represents a rare opportunity to acquire a large scale, diversified midstream business with exciting commercial and growth capital investment opportunities. We are very excited to add the Midcoast platform to our portfolio of midstream investments.'
Rob Bond, who will become CEO of the company under ArcLight's ownership, adds: 'Midcoast owns a permier set of midstream assets that provide excellent Gulf Coast connectivity for natural gas and NGLs, bringing wide basis differentials that have arisen between producing basins and coastal demand centres.'
Hindustan Petroleum Corporation has started building work on a new products pipeline and storage terminal.
The new pipeline will run from Vijayawada to Dharmapuri and the storage terminal in Dharmapuri will ensure the supply of fuel and lubes to the Coimbatore – Salem belt. It is expected to cost RS 2,677 crore and is due to be completed by mid-2021, according to local media reports.
The terminal will have an initial capacity of 4.24 million tonnes per annum, which can be expanded to 5.85 million tonnes per annum.
The 697km pipeline will run from Hindustan Petroleum's Vijajawada terminal at Kondapalli. The terminal will also help supply aviation fuel to the Salem airport.
Dr Sukhy Barhey and Emily Sin from BMT Group examine some of the opportunities and challenges for storage operators in Singapore when submitting a safety case
Requirements to provide safety cases for storage terminals are increasingly global. In line with this trend, the implementation of the safety case regime in Singapore provides an opportunity for terminals to review lessons learnt and apply them in developing compliant safety cases. Terminals can also gain a greater understanding of operations and Capex projects, and optimise current processes.
The development of a safety case is a communication exercise through which operators demonstrate that they fully appreciate the potential hazards present at their terminals and how these are managed, such that the risks are reduced to as low as reasonably practicable (ALARP). While it is recognised that terminals are good at managing the well understood hazards, often of high frequencies and low consequences (e.g. occupational health and safety hazards), the need to appropriately assess and manage risk from low frequency events with high consequences (defined as major accidents) may present challenges.
Aside from safety teams and senior management, the complexity involved in understanding and managing risks from major accidents required in developing a safety case is often not fully appreciated. It involves a combination of predictive and technical assessment.
The predictive aspect is the assessment of major accident risk arising from terminal operations. It requires a structured and systematic approach so that the risk to people is assessed and controlled. This involves identifying potential major accident hazards (MAHs) and major accident scenarios (MASs) through comprehensive reviews of safety and risk studies (e.g. QRAs, HAZIDS and HAZOPs), incident records and major accident reports such as the Buncefield fire.
The technical aspect requires an in-depth review of the reliability and adequacy of the safeguards used to manage risks. This involves concerted effort from all terminal departments to provide their expertise and facilitate the understanding of critical safety systems.
Challenges in developing a safety case
Establishing a representative operational basis
In developing a safety case, one of the challenges is to consider how best to represent the operational flexibility that is possible in terminals. How does one present the risk in storage terminals, where the range of materials, quantities and locations may vary daily?
For the purposes of a safety case this variability must be represented by a single configuration. If a prudent basis for risk assessment is adopted, the representation would be one that is the worst case possible for all locations within the terminal. This would result in situation where the assessed risk will be unacceptably high. Under such circumstance, in theory, the terminal must implement measures that reduce risk to ALARP, requiring the implementation of extensive controls. The investment in Capex and increased Opex to achieve this reduction would be prohibitive, leaving the only option of ceasing operations. This is neither a viable approach, nor a realistic representation of normal operational risks.
To address this, a baseline must be agreed with the regulator. This baseline should reflect daily operations (a good starting point is to select a configuration on a specific day) but also consider locations where risk to people may be higher should a hazardous material be stored in a specific location. This requires careful analysis and consideration. If the configuration leads to an underestimation of risk, the safety case will not be accepted or fail verification or inspections. Should the configuration unreasonably restrict operational flexibility, there could be commercial implications. If operational demands require a configuration significantly different from that used as a baseline, the safety case may need to be updated. This can be avoided by spending time in a workshop with the key stakeholders; operations, maintenance, commercial, safety and management to agree the baseline, before the development of the analysis and risk arguments in the safety case.
Defining an appropriate risk appetite
Having established a baseline configuration and identified the major accident hazards (MAHs) and scenarios (MASs), a set of safety critical events (SCEs) can be derived, through a process of grouping and filtering, to represent major accidents. These SCEs are used to demonstrate how risks are managed. This simplification is necessary to significantly reduce the large volume of work that would otherwise arise. For this process to work effectively, it is necessary to have an appropriately calibrated risk matrix and a clear and logical grouping and filtering process.
Every organisation has its own risk matrix. The regulations do not present, and indeed should not present, a risk matrix, since this is the tool that defines the organisation's risk appetite and tolerance. However, experience in developing safety cases demonstrates that organisations need to appreciate that a risk matrix designed for occupational health and safety risk will not be appropriate for assessing major accidents. Such a risk matrix will not have the granularity required to identify a safety critical event. Applying a poorly calibrated risk matrix to evaluate MASs will create problems in demonstrating the risk reduction impact of controls, which would lead the organization to identify and implement new controls that may not be necessary.
Opportunities resulting from developing a safety case
Understanding of terminal operations through Bowtie diagrams
One of main advantages of going through the development of a safety case is the clarity it brings in understanding the major risks and how risk controls are organized to reduce risk. This is well demonstrated through the use of Bowtie diagrams, a simple yet a powerful way of understanding major accident scenarios, the risk controls and how the integrity of those controls is maintained.
Bowtie diagrams give clarity on the balance between preventative controls (those that prevent an accident) and those that mitigate the impact. Through appropriate use of the Bowties, organisations can ensure that the resources they have committed are targeted to gain the maximum return in terms of risk reduction.
Identifying areas of improvement through ALARP demonstration
Safety cases also provide inputs into terminal development and improvements plans through the ALARP demonstrations, a critical element that shows considerations have been given to implement new controls or enhance existing controls. It is recognised that the implementation of all suggested measures is impracticable, hence appropriate cost benefit analyses (CBA) are conducted to select the controls that would provide significant risk reduction compared to the effort and cost involved.
The drawback of this approach is that it can be contentious when the benefits are evaluated and monetized as the risk to people is considered. In addition, the principle of gross disproportionality must be applied.
To help perform CBA at a level acceptable to the regulators and avoid the pitfalls, BMT implements a framework that allows us to select (or reject) measures in a way that stands up to detailed scrutiny and addresses the challenges of the traditional CBA. This framework gives appropriate consideration of benefits, cost and effort in selecting the measure to be impended and uses risk to guide implementation. The simplified approach has shown to be extremely useful in guiding terminals to make sound risk-based decisions.
In summary, while safety case regimes are often government mandated, experience tells us that the value beyond achieving compliance is in the process itself. By developing a safety case and going through the exercise, an organisation opens up opportunities to deepen their understanding of major accident risk and improve their preparedness and capacity for an effective management of risk in line with the resources available.
Dr Barhey will be speaking more about submitting a safety case and how terminals should navigate this new regulation on the first day of the Tank Storage Asia conference on September 26 & 27. For more information, visit www.tankstorageasia.com.
Inter Pipeline has reported strong second quarter 2018 financials of $261.5 million – an increase of $54.5 million compared to the same period in 2017.
The company says this increase is largely driven by record performance in the NGL processing business, which continues to have strong production volumes.
However, its bulk liquid storage segment experienced a decline in financial – reporting funds from operations of $17.4 million in the quarter, compared to $25.3 million in the second quarter of 2017. Storage demand for certain petroleum products in Europe continued to be impacted by a backwardated commodity pricing environment.
Average storage utilisation rates during the second quarter were 84% compared to 98% for the same period in 2017. The decline in overall utilisation was largely reflective of unfavourable market conditions in Denmark. Utilisation remained strong in Sweden and Germany, where facilities are operating near capacity.
Civil construction and fabrication activities at the $3.5 billion Heartland Petrochemical Complex advanced considerably during the quarter. Piling activities were completed for the propane dehydrogenation facility, with more than 3,000 in place, and concrete work is well underway. Fabrication in Alberta and globally is progressing with the 90-meter propane/propylene splitter and an 800-tonne reactor expected to move to the Heartland Complex site near Fort Saskatchewan, Alberta in early 2019.
ExxonMobil has signed a letter of intent for its subsidiary XTO Energy to contract up to 450,000 dekatherms per day of capacity on the Permian Highway Pipeline project.
The $2 billion project by Kinder Morgan Texas Pipeline, EagleClaw Midstream Ventures and Apache will provide an outlet for increased natural gas production from the Permian Basin to growing market areas along the Texas Gulf Coast. It is designed to transport up to 2 billion cubic feet per day of natural gas through 430 miles of pipeline from the Waha to Katy, Texas areas, with connections to the US Gulf Coast and Mexico markets.
It is expected to be in service in late 2020.
Sara Ortwein, president, XTO Energy, says: 'The Permian Highway Pipeline will provide additional capacity for reliable transportation of natural gas to the US Gulf Coast.
Sital Mody, president of Kinder Morgan Natural Gas Midstream says that the support of ExxonMobil will help accelerate its path to a final investment decision.
Kinder Morgan and EagleClaw will hold an open season for capacity on the pipeline, starting on August 10.
Moda Midstream plans to acquire the Oxy Ingleside Energy Centre, including crude oil and LPG infrastructure, from Occidental Petroleum.
IEC is a storage and export terminal that provides access to global markets for crude oil and LPG producers and marketers. It is located in Ingleside, Texas, near the mouth of the Corpus Christi Ship Channel.
It linked Eagle Ford Shale and Permian Basin production to key domestic and international markets. It will be connected directly to multiple 'next generation' long-haul crude pipeline that allow for bathcing and segregation of crude oil deliveries at some of the most competitive tariff available to shippers.
It has 2.1 million barrels of oil storage capacity and three deep-water berths for crude oil. The facility is currently undergoing expansion to add storage capacity and infrastructure for contracted customer growth. There is scope for additional expansion on the 900-acre site.
In addition, Moda also acquired LPG storage, berths and infrastructure, certain crude oil pipeline assets and offsite logistics locations. Looking ahead, the company plans to expand services through controlled-growth development for additional hydrocarbons expected to reach the terminal in the coming years.
Bo McCall, Moda president and CEO, says: 'We are excited to have the opportunity to continue building on Occidental's vision of the Ingleside Energy Centre as a premier export terminal in the US Gulf Coast. We see enormous growth potential and look forward to providing exceptional service to our existing and new customers for years to come.
'This acquisition is a milestone achievement for Moda and is a significant leap forward in realising our vision to build a leading independent terminalling company with a deep presence in the US Gulf Coast.'
The transaction is expected to close later in the third quarter of 2018.
Trafigura has submitted plans to build the first US offshore deepwater oil export terminal in Corpus Christi, Mexico.
Texas Gulf Terminals, owned by Trafigura US, submitted its permit application for the Texas Gulf Terminals project on July 9 to the US Department of Transportation.
The facility will allow VLCCs capable of carrying up to 2 million barrels of crude and other tankers to load cargo safely, directly and fully via a single-point mooring buoy system (SPM).
The use of SPMs eliminates unnecessary ship traffic in inland ports as well as the 'double handling' of the same crude oil, reducing the opportunity for spills and emissions each time the crude oil is transferred.
Currently, no US inland ports are capable of fully loading a VLCC and to do so requires multiple ship to ship transfers in lightering zones out at sea.
Trafigura says that once built, this SPM will ease infrastructure barriers to crude oil exports, grow the US economy and support jobs.
Corey Prologo, director, Texas Gulf Terminals and director of Trafigura North America, says: 'The Texas Gulf Terminals project will give US crude oil producers, particularly Texas operators, safer, cleaner and more efficient access to very large crude carriers, ensuring that the economic and employment benefits of increasing domestic crude production can be fully realise right here at home.'
The project is the latest in a series of long-term investments that Trafigura has made in commodities across the US. This includes a nearly $1 billion investment in Buckeye's marine export terminal and condensate splitter in Corpus Christi, Texas.
Ikon Midstream has established a new fuel terminal for the Laredo, Texas market.
The company says it is the first fuel terminal in Laredo and that it owns its own patent on petrol detergents and is the first independent blender to cross petrol into Mexico.
Rhett Kenagy, CEO and managing partner of Ikon Midstream, says: 'We are excited to launch the first fuel terminal of Laredo. We observed that the city lacks a fuel terminal and the fuel distributors here usually have a hard time in sourcing fuels.
'The lack of competition also offers an open market for us to scale up our growth in the region.
'We promise high end blended fuels at competitive prices for the local US distributors here who cater to a large client base in Mexico.'
Sinopec has announced plans to build natural gas storage facilities with a total capacity of 55.6 billion m3 in northern China.
According to Platts, the facilities will be located in the northern Henan province to ease supply bottlenecks in peak winter season.
The company did not give a timeline or investment amount of building the new capacity. This follows PetroChina's announcement of the construction of nearly 20 bcm of underground gas storage in northeast China.
Sinopec's gas storage cluster will comprise 16 facilities built at the site of abandoned oil and gas fields in the province.
China is set to become the world's largest gas importer within the next three years, however the lack of pipeline and gas storage capacity has affected the growth of LNG demand.
Magellan Midstream Partners has reported higher second quarter financials for 2018 compared to the same period the previous year.
The company reports net income of $214.4 million for Q2 2018 compared to $210.4 million for Q2 2017.
Transportation and terminals revenue for its refined products segment increased $13.2 million between periods driven by record shipments from strong demand for refined products in large part due to higher distillate demand in crude oil production regions served by the company.
The current period has also benefited from higher storage and other ancillary service fees along Magellan's refined products pipeline system associated with increase customer activity.
In its crude oil segment, transportation and terminals revenue increase $29.5 million primarily due to contributions from the company's condensate splitter in Corpus Christi that began commercial operations in June 2017.
In its marine storage segment, transportation and terminals revenue declined $3.6 million primarily due to lower utilisation, resulting from the timing of maintenance work and the ongoing impact of tanks damaged by Hurricane Harvey that are still under repair.
Michael Mears, CEO, says: 'Magellan continues to generate strong financial results bolstered by increased demand for our refined products and crude oil infrastructure.
'In additional to solid demand for our current services, we remain committed to developing attractive expansion projects to meet our customers' needs while generating attractive returns for our investors for years to come.'
Tallgrass Energy will develop a new crude oil pipeline from Cushing, Oklahoma to the St. James, Louisiana refining complex as well as a separate new export-capable liquids terminal.
The proposed Seahorse Pipeline is expected to be 30 inches in diameter and 700 miles long, with the capacity to transport up to 800,000 barrels of crude oil per day from Cushing to the Louisiana Gulf Coast.
It will operate as a common grade batch system that, along with Tallgrass' Pony Express Pipeline, will ensure domestic refiners and international markets have access to clean barrels from five different production basins.
The new storage terminal, Plaquemines Liquids Terminal, is a joint development project with Drexel Hamilton Infrastructure Partners and is being structured as a public-private partnership. It is expected to be fully operational in the second quarter of 2020 and is permitted for up to 20 million barrels of storage.
It will have the ability to fully load and unload post panama vessels and barges on its multiple deep-water docks. Tallgrass anticipates building a separate offshore pipeline extension that would give the terminal the added capability of loading VLCCs by the third quarter of 2021.
Tallgrass Energy president and CEO David Dehaemers says: 'The Seahorse Pipeline and Plaquemines Liquids Terminal projects build on our strategy to provide diversity of supply and greater market optionality to our customers. These projects provide highly desired take-away capacity from Cushing to the St. James refining complex, providing interconnectivity to more than 2.5 million barrels per day of refining capacity and access to international markets.'
The company expects to launch its initial open season for the pipeline on August 15, which will run for 45 days.
Williams has announced two midstream transactions for $1.173 billion that will result in its entry into Colorado's Denver-Julesburg Basin.
Williams - a provider of large-scale infrastructure – and KKR plan to buy Discovery DJ Services from TPG Growth. Discovery is a Dallas-based provider of natural gas and oil gathering and natural gas processing services in the southern portion of Colorado's DJ Basin.
When the acquisition closes, which is expected in early August, Williams and KKR will own the entirety of the Discovery midstream business through a joint venture. Williams will be the operator of Discovery.
Discovery provides midstream services to producers drilling the prolific Niobrara and Codell stacked-pay zones of the basin. The system, strategically located in Weld and Adams countries in Colorado, includes both natural gas and crude oil gathering pipelines, cryogenic gas processing, liquids handling and crude oil storage.
The assets include 60 million cubic feet per day of gas processing capacity with an additional 200 million cubic feet per day plant that is fully permitted and under construction and is expected to be in service by the end of 2018.
The Discovery assets also include 130 miles of natural gas pipeline and 260,000 acres dedicated for gas gathering and processing plus an additional 60,000 acres for oil gathering.
Alan Armstrong, president and CEO of Williams, says: 'Adding the fast-growing Discovery midstream business, including sites with permitting underway for greater than 1 bcf/d of gas processing to our portfolio, follows our strategy of connecting the best supplies to the best markets.
This is a great opportunity to expand our asset footprint into a premium-growth basin and brings the benefits of the Williams capability suite to better serve producers in the DJ Basin.
'This transaction allows Williams to take advantage of synergies between the Discovery assets and our downstream business via the DJ Lateral of Overland Pass Pipeline. We will now have the opportunity to integrate output from these acquired assets with production from our existing processing footprint in the west segment into our advantaged downstream assets, including OPPL and the Conway fractionator and storage facilities.'
Oil product stocks at the Middle East's key oil hub of Fujairah fell 2.9% in the week to Monday, July 30, slipping to a five-week low as light distillate inventories lost more ground.
Total oil stocks sank to 18.739 million barrels, down 559,000 barrels from a week earlier, according to the Fujairah Energy Data Committee.
The biggest decline was in light distillate stocks, which dropped 10.35% to 5.741 million barrels, the lowest since the start of the year, the data showed.
'Middle Eastern petrol demand appears steady, while African demand is picking up on the evidence of recent tender purchases from South Africa, Tanzania and Kenya,' S&P Global Platts Analytics said in a report Wednesday.
State-owned Kuwait Petroleum continued to be an active buyer of petrol seeking 25,000 mt of RON 91 petrol for delivery in late August via a tender closing this week, the reported added.
Spot premiums for Arab Gulf RON 95 petrol were at $3.95/b Tuesday.
Stocks of middle distillates also slipped 1.2% to 2.676 million barrels, an eight-week low.
'Arbitrage of jet fuel and gasoil to Europe could be complicated by the recent attack by Yemeni Houthi rebels against two Saudi crude tankers. The route to the Red Sea from the Indian Ocean passes through the Gulf of Aden and the narrow straits known as the Bab al-Mandab,' Platts Analytics said.
While there has been no sign of any impact to product tanker movements, the incident adds a further complication to already squeezed arbitrage flows. Jet cargoes have already been seen heading from the Middle East and India eastwards to Singapore instead of Europe.
Stocks of heavy distillates and residues rose 1.3% to 10.322 million barrels, staying above 10 million barrels for the second week in a row and hitting the highest since December 11.
The higher inventories in Fujairah are in contrast to Singapore, where residue stocks dropped to a 6 1/2-year low of 16.196 million barrels last week on continued low arbitrage supply. Fujairah bunker demand had a slight improvement compared to last week, with more buying inquiries emerging after the recent lull.
LBC Tank Terminals and Magellan Midstream Partners are increasing crude oil and condensate storage & dock capabilities at Seabrook Logistics in the Houston Gulf Coast.
Seabrook Logistics, owned equally by subsidiaries of Magellan and LBC, plans to construct nearly 111,000 m3 of additional crude oil and condensate storage in Seabrook, Texas as well as develop a new Suezmax dock with up to a 45-foot draft and 400,000 barrels per day of dock capacity.
Once the $120 million expansion is complete, Seabrook will own 490,000 m3 of storage, deep water access through and Aframax dock and Suezmax dock and connectivity to Magellan’s Houston crude oil distribution system.
It is expected to be operational by late 2019.
Michael Mears, Magellan’s CEO, says: ‘With increased crude oil production in the Permian Basin and other prolific regions, demand for crude oil storage and export capabilities continues to grow in the Houston Gulf Coast area.’
‘With the expansion of the Panama Canal and the growing role of the US in increased flows of oil, this is an important development for our project and for the success of our customers,’ says John Grimes, LBC’s group COO.
Export capabilities recently commenced for Seabrook Logistics, which currently operates 380,000 m3 of crude oil and condensate storage.
Would you like to promote your company to 10,000 tank terminal professionals?
The August/September edition of Tank Storage Magazine is one of the most important issues of the year, with distribution at no less than nine tank storage events worldwide.
This is in addition to the magazine's usual independently audited postal distribution of 3,500 terminals across the globe. In total this issue will be given to 10,000 industry professionals.
Event distribution includes:
• Tank Storage Asia, Singapore (exclusive delegate bag distribution)
• Tank Storage Association, UK
• API Tanks, Valves & Piping Conference & Expo, Seattle, US (delegate bag distribution)
• Asia Pacific Petroleum Conference (APPEC 2018), Singapore (delegate bag distribution)
• Gastech, Spain
• 8th Gulf Intelligence Energy Markets, Fujairah, UAE (exclusive delegate bag distribution)
• Bulk Liquid Storage Europe 2018, Spain
• EPCA Annual Meeting, Austria
• NISTM Conference & Expo, Texas
Articles within this issue include:
• Exclusive storage operator interviews, including a new storage project in Singapore as well as plans for a petrochemical hub in Malaysia
• A comprehensive overview of the tank terminal market in the region, including new construction projects as well as developments affecting the industry
• A look at the looming 2020 IMO sulphur fuel cap from a shipping and storage terminal perspective
• In-depth articles looking at Singapore's new Safety Case regime, hurricane preparation, tank level monitoring, fire safety, emissions, drones, process safety and cyber security threats
• Dedicated chemical storage supplement, including market analysis on the chemical storage sector as well as interviews with operators and ports – an added bonus to coincide with the issue bring distributed at the EPCA Annual Meeting in Vienna.
The deadline for this issue is the August 13th. To get involved in this bumper edition, contact David@tankstoragemag.com
BP has agreed to acquire a portfolio of unconventional oil and gas assets from BHP in a move that will upgrade and reposition its US onshore oil and gas business.
The deal will bring BP extensive oil and gas production and resources in the Permian and Eagle Ford basins in Texas and in the Haynesville gas basin in Texas and Louisiana.
Under the terms of the agreement, BP America Production Company will acquire from BHP Billiton Petroleum 100% of the issued share capital of Petrohawk Energy Corporation – a wholly owned subsidiary of BHP - for $10.5 billion.
The transaction is expected to be complete by the end of October.
The assets include 470,000 net acres of licences, including a new position for BP in the Permian-Delaware basin, and two positions in the Eagle Ford and Haynesville basins. These have a combined production of 190,000 barrels of oil equivalent per day.
The acquisition will significantly increase the liquid hydrocarbon proportion of BP's production and resources in the US onshore, to around 27% of production and 29% of resources from the current 14% and 17% respectively.
Bob Dudley, BP group chief executive, says: 'This is a transformational acquisition for our Lower 48 business, a major step in delivering our upstream strategy and a world-class addition to BP's distinctive portfolio.
Magellan Midstream Partners will expand the western leg of its refined petroleum products pipeline system in Texas.
The company previously announced its plans to expand the capacity of this line segment to 150,000 barrels per day from its current capacity of 100,000 barrels per day. Based on additional committed volume received as part of its recent supplemental open season, Magellan now plans to expand this capacity to 175,000 barrels per day at a cost of $500 million.
The expanded capacity will handle incremental shipments of petrol and diesel fuel to demand centres in Abilene, Midland/Odessa and El Paso, Texas and New Mexico. The pipeline system can also access markets in Arizona and Mexico via connections to other pipelines.
The expansion will be accomplished by a combination of increased pipeline diameter along the existing route and construction of 140 miles of new pipe from Hearne to Alexander, Texas. Connectivity to the ExxonMobil Pipeline Company's terminal in Wink, Texas will also be added as part of the expansion.
It is expected to be available by mid-2020. The company says that construction of new refined products terminals in both Midland and the Delaware Basin remain under review.
Michael Mears, CEO, says: 'Magellan's expansion of our refined products pipeline system into West Texas provides our customers with continued flexibility to meet growing demand for petrol and diesel fuel in the region with supply from our Gulf Coast and Mid-Continent origins.
'Further, construction of the new pipeline segment between Hearne and Alexander has the strategic advantage of providing additional capacity along our extensive pipeline network to satisfy strong demand for refined products destined for the Dallas-Fort Worth metropolitan area.'
Sujith Panikkar, functional safety expert from HIMA Asia Pacific provides an overview of the functional safety standards that require facilities to consider cyber security threats, what operators need to know and how to ensure they are compliant
SIS safety lifecycle management in the context of Singapore's safety case regime
The Singapore safety case regime, which became law on 1st September 2017, places increased responsibility on operators to manage safety in their Major Hazards Installations (MHI), making use of best practices and standards to keep risk reduced to ALARP (as low as reasonably practicable) levels though out the lifecycle of the installation.
The SIS (Safety Instrumented System) is a key active protection barrier in most process plants. Managing the SIS requires end users to follow the guidelines and principles detailed in the IEC 61511 standard (functional safety – Safety Instrumented Systems for the process industry sector).
It is also a requirement in the safety case to demonstrate how safety-related control systems have been designed and being operated and maintained to ensure safety and reliability. In this context the 'Safety Case Technical Guide' and the 'Safety Case Assessment Guide' published by the Singapore Ministry of Manpower - Major Hazards Department points to the IEC 61511 and Functional Safety Management for guidance.
The latest release of the IEC 61511 standard (Edition 2) in 2016 further emphasises the responsibility of end users to manage Safety Instrumented Systems (SIS) through the life cycle of the installation.
In the recent years, with increasing frequency of cyber-attacks on industrial installations, concerns regarding security of SIS installations have come to the fore creating additional challenges for end users.
Conventionally, the design of safety instrumented systems is based on identification of process safety hazards and putting in place safety instrumented protective functions to prevent consequences. This is usually approached by well-established methods for HAZOP/ SIL Classification.
It needs to be taken note that the process safety hazards analysis does not usually involve an evaluation of cyber-security vulnerabilities and threats. However, when a cyber-attack takes place on control and safety systems, the consequences can be quite similar to those arising from process safety hazards.
As evident from incidents like the Ukraine power grid outage in 2015, caused by hackers who managed to gain entry into the control systems unnoticed and then forced a blackout leaving over 230,000 residents without power or the STUXNET, in 2010, which affected nuclear facilities in Iran, the consequences of a cyber incident can be quite similar to that of a process safety incident with implications on people, environment and assets.
With cyber-attacks on industrial control and safety systems becoming a reality, operators of MHIs are now forced to examine a new scenario:
'Are safety instrumented systems responsible for protecting your MHI secure?'
Making safety instrumented systems secure
Ensuring security of safety instrumented systems requires a special strategy. This approach is based on three cardinal principles accruing from IEC 61508/ 61511 and IEC 62443 standards:
• Protection of safety functions: security effectively prevents negative influences of threats to SIS and their implemented safety functions
• Compatibility of implementations: security does not interfere with safety and vice versa
• Protection of security countermeasures: the safety implementations do not negatively compromise the effectiveness of security implementations
In order to ensure security of the SIS, there are well established approaches that involve the deployment of a cyber security lifecycle based on the guidelines of IEC 62443, using principles of defence-in-depth, segregation by zones and conduits etc.
To ensure the safety of Major Hazards Installations, operators now have a major task in hand: to review the architecture and design of their existing SIS protecting their installations to ensure these are secure as well.
Panikkar will be speaking more about functional safety standards and cyber security threats on the morning of the second day of the Tank Storage Asia conference. For more information, visit www.tankstorageasia.com.