Regulatory changes, the growth of technology and tighter restrictions on emissions are some of the key impacts affecting the tank storage sector.
A survey of the 2018 Tank Storage Awards judging panel reveals that currently, the biggest challenge facing operators is keeping track of changes to regulations as well as ensuring staff are on top of safety requirements and that they are compliant.
The panel of ten judges from across the storage sector, including representations from BP, Shell, Vopak, Oiltanking, Inter Terminals, LBC and VTTI highlights that human error is one of the biggest threats to storage terminals, followed by equipment failure and fire.
Looking to future developments, the judges feels that robots will be one of the next big developments in the sector. 'They can significantly bring down costs for maintenance and inspection activities and shorten out of service times,' they comment.
Additionally, the internet of things is another area where the judges see significant potential in the future as well as further automation of processes and an increasing importance in the role of technology.
Interestingly, the judges strongly agree that storage terminals do not rely too much on technology in their current operating models.
Comments from the judges say: 'These technologies need to be appropriate to the environment and a thorough understanding of the consequences of failure and any need of redundancy and protection from failure or interference, either malicious or unintentional is key to their success.'
The second Global Tank Storage Awards will be held after the first day of StocExpo Europe on March 20, 2018, at the Cruise Terminal in Rotterdam.
For more information, and to read the judges' survey in full, visit www.tankstoragemag.com/awards.
A new oil and chemical bulk liquid storage terminal has been opened in China.
The Weifang Sime Darby liquid terminal expands Weifang Sime Darby Port's range of services offered for storage and other terminal facilities.
The first phase of the facility was opened earlier this month, with a storage capacity of 406,000 m3. The second phase, which involves the construction of 91,000 m3 of capacity is expected to become operational in October. Building work on the final phase, with a capacity of 164,000 m3 is expected to be complete by the first half of 2019.
The terminal will be build, managed and operated by Weifang Sime Darby Liquid Terminals, a JV company owned equally by Sime Darby Overseas and Dragon Crown Group Holdings.
The port sits within the network of Longkou Port, Yantai Port, Weihai Port, Qingdao Port and Rizhao Port and it receives cargos from central, northern and western Shandong and Weifang city.
Timothy Lee Chi Tim, vice chairman of Weifang Sime Darby Liquid Terminal, says: 'The terminal is part of our RMB 2.8 billion master expansion plan, which will put Weifang Sime Darby Port on the roadmap to achieving our aim of becoming a significant multi-purpose port in the northeast Asian region.
'The launch of our liquid terminals is timely to capture the growing market for crude and refined oil, as well as chemicals in China. These commodities have benefitted from the gradual liberalisation of import and export policies in China.'
Funds from Inter Pipeline's bulk liquid storage segment declined in the second quarter of 2017 as a result of lower throughput and unfavourable foreign exchange rates.
The segment generated funds from operations of $25.3 million in the second quarter of 2017, a decrease from $29.6 million in the same period in 2016.
The company says that while utilisation rates were at 98%, compared to 97% in the same period last year, a decrease in throughput activity and the unfavourable foreign exchange rates contributed to lower funds from operations.
In June, the company commissioned 175,000 barrels of new chemical storage capacity at the Seal Sands terminal in the UK, comprising of five tanks. These tanks are supported by long-term contracts.
Overall, the company's funds from operations increased by 5% over the second quarter of 2016 to $207 million.
Ursa Space Systems has announced plans to provide the world's first global oil inventory reports.
The company says that the reports will build an 'accurate balance sheet for better insight on oil supply and demand'.
Currently, it provides an inventory report for China, but is looking to deliver global oil storage reports on a region-by-region basis, starting with the Caribbean, Middle East/North Africa and Europe. These reports are due to come online in the coming months.
Matt Wood, Ursa's VP of sales and marketing, says: 'Developed in close collaboration with our customers, the global product builds upon our success with Ursa's China oil storage report released in May.
Colin Fenton, of Blacklight Research, says: 'Energy trading is continually revolutionised by the emergence of technologies that bring new sources of knowledge and efficiency.
'As the promise of space-based remote sensing marched toward reality, we knew we had to find and partner with the best operation. Our access to Ursa's data has been a key edge for Blacklight in anticipating shifts in oil market fundamentals and prices so accurately in 2017.'
The reports provide weekly time series of oil stocks down to the tank level for a majority of the inventories on a regional basis. The measurements can then be used as an anchor in calculating an oil balance sheet, or as an input to models that predict prices of a wide range of commodities and other financial instruments.
Additionally, Ursa provides contextual information such as tank owner and storage type.
ArcLight Capital Partners has entered into a joint venture with BP West Coast Products, which will involve the acquisition of two storage terminals.
The joint venture agreements cover refined product logistics infrastructure assets in the US Pacific Northwest.
The two large-scale refined product terminals are in Seattle, Washington and Portland, Oregon. The transaction is expected to close in late 2017.
TLP Management Services will operate the terminals under a multi-year operating agreement. Separately, ArcLight intends to grant TransMontaigne Partners a right of first offer to purchase Arclight's interest in the joint venture.
USD Partners' acquisition of the Stroud terminal will help drive additional commercial opportunities.
In its second quarter financial results, the company says it believes the Stroud terminal represents 'one of the most advantaged rail destinations for Western Canadian crude oil given established connectivity from Cushing to multiple refining centers across the US, including underutilised pipelines to major refining centres along the Gulf Coast'.
Through the acquisition, USD has established a rail-to-pipeline solution from Western Canada. It is supported by a new customer and multi-year take-or-pay cash flows.
Dan Borgen, CEO, says: 'Our Stroud terminal acquisition demonstrates the ongoing value of rail takeaway solutions for Western Canada's vast crude oil resource. We believe our origin-to-destination capabilities and rail-to-pipeline solutions will drive additional commercial opportunities at the partnership, particularly as current production normalises and grows, new projects are brought online and available takeaway capacity becomes constrained.'
The 76-acre terminal was bought on June 2.
The company recorded its adjusted EBITDA of $15.1 million and its net income at $8.4 million in its second quarter 2017 results.
IEnova and Valero have signed capacity contracts for a refined products storage terminal in the Port Veracruz, Mexico.
In July, IEnova won a bid for a 20-year concession to build and operate a $155 million marine terminal for the receipt, storage and delivery of refined products.
The company has since executed the agreement, which includes the transfer of the waterfront lot where the terminal will be built, by the end of 2017.
Additionally, IEnova will build and operate two storage terminals that will be located near Puebla and Mexico City and will have initial storage capacities of 500,000 and 800,000 barrels respectively. The capacity of both these terminals has also been contracted with Valero.
The global project, including the marine terminal and two in-land terminals, represents a $275 million investment.
Valero plans to import refined products including petrol, diesel and jet fuel, and store them at the Veracruz Marine Terminal. These products will then be distributed by truck and transported to Puebla and Mexico City by rail.
In a statement IEnova says these assets will contribute to the reliability of supply of refined products in central Mexico.
IEnova will be responsible for the implementation of the projects. The two in-land terminals will start operations during 2019 and the marine terminal in Veracruz at the end of 2018.
Carlos Ruiz Sacristán, CEO and chairman of the board of IEnova, says: 'Mexico will require important investments in the transportation and storage of refined products in the next years, and IEnova is ideally positioned to become a leader.'
Joe Gorder, Valero's chairman, president and CEO, adds: 'With the recent constitutional reform, it is now possible for Valero to import refined products directly into Mexico for further distribution, including branded sales. This transaction will enable us to extend our supply chain to efficiently supply petrol, diesel and jet fuel to the growing Mexican market.'
Synergy Downstream's Jeff Wilson explains how cross government ministry regulatory reforms and private sector investment will enable Indonesia to secure downstream energy security in the national interest
Apart from growing domestic energy demands, Indonesia has the potential to become a major fuels storage and trading hub.
Despite growing imports of crude oil, oil fuels and LPG demand, which are projected to account for 80% of total demand by 2025, the repeated failures by consecutive governments to fully implement oil and gas laws and regulatory reforms, combined with gross long term under-investment, means that a growing downstream energy security crisis is unfolding.
To put the situation into perspective, Indonesia currently has no mandatory crude oil, oil fuels or LPG operational reserves or emergency reserves at all. Fortunately this situation is now changing - creating significant private sector investment opportunities in storage and distribution infrastructure and reserves.
Jeff Wilson, managing director at Synergy Downstream, explains that until recently there have been many barriers to level playing field competition, which have maintained the national oil and gas company's de-facto monopoly across several large volume downstream market sectors.
These barriers have increasingly manifested themselves through continued underinvestment, supply shortages, declining fuel stocks, substandard products and product pricing abuses. Fortunately these problems are now being addressed.
He says: 'It has been accepted by key stakeholders that downstream energy security cannot be achieved on time by maintaining Pertamina's (national oil and gas company) de-facto monopoly, expanding its storage capacity and product reserves or by addressing the monumental challenges within government budget constraints and competing priorities.
'Security requires multiple supply chains and infrastructure solutions that can only be effectively realised by a combination of regulatory reforms, significant private sector investment and level playing field competition.'
Despite any or all proposed or planned refinery projects becoming operational, more than 80% of Indonesia's oil fuels and crude oil requirement will need to come from imports – strengthening the need for more storage and logistics infrastructure.
Wilson explains: 'Domestic oil fuels and LPG demand is growing at a rate of 4% to 5% per year. For Indonesia to realise the government's energy security targets of 30 days operational reserves and 30 days emergency reserves an additional 19,000,000 KL of oil fuel and crude oil storage and 1,500,000 tons of refrigerated LPG storage must be constructed, commissioned and stocked by year 2025.
This means that Indonesia needs to quadruple all existing storage infrastructure by 2025.
A package of regulatory reforms that ensure a transparent level paying field competitive market is needed, along with regulatory oversight, enforcement and significant private sector investment.
In fact, Wilson estimates that $82 billion (including refineries) must be invested in Indonesia's downstream sector in the next eight years to realise the government's energy security objectives.
Five consecutive downstream energy security projects, financed in part by the British Government, sponsored by the National Energy Council (DEN), championed by the Ministry of Energy and Mineral Resources (ESDM) and supported by the Downstream Oil and Gas Regulator (BPH Migas) have been executed by Synergy Downstream Solutions. The reports, conclusions and recommendations have been endorsed and some recommendations have been implemented with others moving forward.
Wilson adds: 'Given both the government and Pertamina's long term financial constraints, key project recommendations focus on delivering downstream energy security at no cost to the government through level playing field competition and private sector investment.'
Wilson will be speaking on the first morning of the Tank Storage Asia conference on September 27 & 28 at the Marina Bay Sands, Singapore. For more information visit www.tankstorageasia.com.
Vopak E.O.S plans to construct a 4,000 m3 LNG terminal in Muuga, with plans to increase capacity in the future.
According to the Baltic News Service, a Vopak spokesperson says that they plan to start construction in the ‘near future’ and that the first phase is due to be complete in a year’s time.
The company is considering requesting funding from the EU for the project.
Plans to build a regional LNG terminal at Muuga, east of Tallinn were first launched in 2012, in response to market demands.
Buckeye Partners' acquisition of a 50% stake in VTTI was a primary driver for its year-over-year improvement in its adjusted EBITDA.
However, its legacy business encountered some challenges during the second quarter according to chairman, president and CEO Clark Smith.
The decline in capacity utilisation in its global marine terminals segment was due to the exit of a long-term customer from one of its facilities. Work is underway to re-contract open storage capacity within this segment.
However, its domestic pipelines and terminal segment benefits from increased pipeline tariffs and contributions from growth capital investments that drove pipeline and terminal throughput volumes.
Smith says: 'We did, however, experience higher integrity and other project-related spending during the more temperate spring and summer months in this segment. Our merchant business continues to contribute positive returns and drive utilisation across our system, although the contribution for the quarter was impacted by lower rack margins and weaker market conditions.'
International-Matex Tank Terminals is set to acquire Epic Midstream.
The acquisition from affiliates of White Deer Energy and Blue Water Energy, values Epic at $171.5 million and is expected to close in the third quarter of 2017.
Epic has a portfolio of seven terminals in the US southeast and southwest, with principle operations in Savannah, Georgia. Storage capacity comprises 3.1 million barrels of refined petroleum, asphalt, biofuels and chemical storage capacity.
Richard Courtney, CEO of IMTT, says: 'The addition of Epic adds an exciting new dimension to IMTT. Together with a greatly expanded product line – jet fuel – Epic provide us with a presence in the strategically important Port of Savannah, some exciting new customer relationships and an energetic team.'
David Vattimo adds: 'IMTT and Epic are a great fit, commercially and culturally. We have put a tremendous amount of effort into improving and leasing the Epic assets over the past several years – we think both the team and the tanks will prove to be a great addition to IMTT.'
The Philippine Coastal Storage and Pipeline Corporation (PCSPC) has added an extra 540,000 barrels of storage at its facility in the Subic Bay Freeport Zone.
Three new 180,000 barrels fuel storage tanks and two tank truck loading racks were added to the company's facility. The additional storage will swell capacity to 5.2 million barrels for various fuel products such as diesel, petrol, jet and fuel oil.
This forms part of its commitment to SBMA to invest and build 1.8 million barrels of fuel tank storage in the Maritan tank facility. Capacity at the facility has doubled over the past six years.
Michael Rodriguez, chairman of PCSPC, says: 'This considerable increase in storage is in response to our customers' demand for quality and available fuel storage in Subic Bay.
'With our existing long term lease agreement with Subic Bay Metropolitan Authority, PCSPC looks forward to being able to undertake further investment, as demand requires, in order to serve the increasing fuel needs of the Philippines now and in the future.'
Phillips 66 plans to construct an extra 2.2 million barrels of crude storage at its Beaumont Terminal on the US Gulf Coast.
So far, 1.2 million barrels of product storage has been placed into service at the facility during the second quarter of 2017. Expansion of the terminal's export facilities, which would take it from a current capacity of 400,000 barrels per day to 600,000 barrels per day, is due to be completed in the first quarter of 2017.
Additionally, the company is progressing with its Bayou Bridge Pipeline segment from Lake Charles to St. James, Louisiana, with commercial operations expected to start in the first quarter of 2018.
DCP Midstream is expanding the Sand Hills NGL Pipeline capacity to 365,000 barrels per day, with a expected completion date in the fourth quarter of 2017.
Green Plains Partners experienced lower storage and throughput volumes in its second quarter financials.
Net income for the second quarter 2017 was $13.1 million, compared to $14 million for the same period in 2016. It reported adjusted EBITDA of $16.7 million compared to $16 million for the second quarter 2016.
Revenues generated from the partnership's rail transportation services agreement with Green Plains Trade decreased by $600,000 due to lower average rates charged for volumetric capacity provided. However, this was offset by revenues generated from its storage and throughput agreement and terminal agreements with Green Plains Trade, which increase by $600,000 due to higher throughput volumes related to ethanol storage assets acquired in September 2016.
Revenues generated from the partnership's terminal services agreements with other customers declined by $400,000 due to lower third-party ethanol and biodiesel volumes at its Birmingham facility and other terminals.
Todd Becker, president and CEO of Greens Plains Partners, says: 'Overall storage and throughput volumes were lower this quarter versus last quarter, but we expect them to return to normal levels in the last half of the year.
'We continue to focus on growing our downstream platform and believe our strong base of business provides a strategic and financial advantage.'
Alkion Terminals has bought a bulk liquid tank terminal in Italy from ENI.
Alkion will be the sole owner and operator of Alkion Terminal Vado Ligure in Savona. It benefits from a strategic seafront location and is connected by pipeline to the Trecate Refinery.
The company says it is committed to invest further in the modernisation and expansion of the facility's storage capacity and infrastructure.
Rutger van Thiel, CEO at Alkion Terminals and partner at Coloured Finches, says: 'We look forward to continue serving the European petroleum and chemical industry at our ten Alkion terminals and to pursue our ambition to further expand the Alkion network into Europe.'
The company was established in 2016 as a new terminal operator focusing on Western Europe. It is creating a network of terminals that perform a primary role in the hydrocarbon downstream and other liquid bulk logistics value chain.