Latest storage news

Vesta Terminals has announced plans to expand storage capacity at its Antwerp facility for (bio) jet fuel, gasoil & diesel.

The expansion comprises five new tanks of 30,000 m3 each, totalling 150,000 m3 of storage, which will be connected to the jetties and the CEPS pipeline system, connecting the terminal to most major airports in West and North-West Europe. Dedicated pipeline systems for (bio) jet fuel will be built to ensure product quality requirements.

The investment is compliant with the latest health, safety and environmental standards and includes investments in water draw-off and (multiple) filtering systems, additivation and round pumping systems.

The project brings total capacity of Vesta Terminal Antwerp to almost 950,000 m3.

The operator says that European jet fuel supply has been under increasing pressure due to growing demand and logistical constraints and more storage capacity is needed to meet this demand. Tanks and pipeline infrastructure will be built with maximum flexibility and allow the storage and handling of different grades and products simultaneously.

Most of the capacity at the terminal has been built for multiple product use, reducing risk for its customers in negative market structures.

The investment supports the need for an efficient jet fuel supply infrastructure and the growth ambition of Vesta Terminals.

Freeport Commodities has added its commercial support to furthering the construction, operation and utilisation of Texas GulfLink, a deepwater crude oil export facility off the cost of Freeport, Texas.

The facility, which will be capable of fully loading VLCC vessels, will include an onshore oil storage terminal connected by a 42-inch pipeline to a manned offshore platform 30 miles off the Gulf Coast. From the platform, the oil will be transported to two Single Point Mooring buoys to allow for VLCCs to receive two million barrels of crude oil with loading rates up to 85,000 barrels per hour.

The offshore platform will have around-the-clock monitoring, which will provide shippers with a safe and reliable mooring operation for VLCCs and other crude carrier vessels.

Sentinel Midstream president and CEO Jeff Ballard says: 'We are pleased with the additional levels of commercial support that Freepoint's involvement will provide to Texas GulfLink. As the project continues to move forward with the deepwater crude oil license application process, Sentinel is excited that Freepoint has chosen to align with Texas GulfLink and will utlise their substantial global and commercial resources to create value for their customers.

'Through their Asian market focus, Freepoint will lead efforts to meet the growing demand from Asian refineries for US produced crude oil.'

David Messer, Freepoint CEO, adds: 'The Texas GulfLink project will help meet the demand our customers have to reliably source US crude oil through a neutral infrastructure export option.'

Construction work has started on a series of storage expansion & infrastructure projects at several Kinder Morgan facilities.

Announcing its fourth quarter 2019 financial results, the company also provided an update on construction activities across its terminal segment.

Work has started on a series of projects at Kinder Morgan's Pasadena Terminal and Jefferson Street Truck Rack, located on the Houston Ship Channel. These $125 million projects include increasing flow rates on inbound pipeline connections and outbound dock lines, tank modifications that will add butane blending and vapour combustion capabilities to 10 storage tanks, expansion of the current methyl tert-butyl ether storage and blending platform, and a new dedicated natural gasoline inbound connection. The improvements are supported by a long-term agreement with a major refiner and a due to be completed by the end of the second quarter 2020.

Construction work has also begun for the butane-on-demand blending system for 25 tanks at the company's Galena Park Terminal. The $45 million project will include the construction of a 30,000-barrel butane sphere and a new inbound C4 pipeline connection as well as tank and piping modifications to extend butane blending to 25 tanks, two ship docks and six cross-channel pipelines. It is expected to be completed in the first quarter of 2021 and is supported by a long-term agreement with a midstream company.

A total of 105,000 barrels of additional ethanol storage capacity is being added to Kinder Morgan's Argo ethanol hub, including both the Argo and Chicago Liquids facilities. There will also be enhancements to the system's rail loading, rail unloading and barge loading capabilities.

An upgrade of the Battleground Oil Specialty Terminal, a leading fuel oil storage terminal on the Houston Ship Channel has also been authorised. The work comprises adding a pipeline to allow for segregation of high sulphur and low sulphur fuel oils. Detailed engineering and design work is underway on the $22 million project, which is expected to be operational in the fourth quarter of 2020.

IFM Global Infrastructure Fund has contributed its 57.6% equity interest in Freeport LNG's second liquefaction train into Buckeye Partners.

Train 2 successfully began commercial operations on January 17 with gas deliveries from BP under its 20-year tolling agreement.

Clark C. Smith, president and CEO, says: 'The contribution of IFM Global Infrastructure Fund's equity interest in Train 2 is the first step in a broader diversification strategy for Buckeye and further demonstrates IFM's support of and commitment to Buckeye.

'The Train 2 equity interest will meaningfully increase our cashflows as well as decrease leverage.'

Philadelphia Energy Solutions has been fined $132,600 by OSHA for serious safety and health hazard violations following a fire & explosions that led to the refinery's closure and bankruptcy.

The fire and subsequent explosions on June 21, 2019 released 5,000 pounds of hydrofluoric acid however no one was seriously injured. Following the incident PES shut down the Girard Point Refinery Complex in Philadelphia, Pennsylvania and declared bankruptcy.

The US Department of Labour's Occupational Safety and Health Administration says that its inspection found deficiencies in the refinery's process safety management programme, including failing to establish or implement written procedures, insufficient hazard analysis and inadequate inspection of process equipment for highly hazardous chemicals used in the process.

Theresa Downs, OSHA Philadelphia area director, says: 'When employers fail to evaluate and address potential hazardous conditions associated with chemical processes, catastrophic events such as this can occur. OSHA's process safety management standard requires that employers conduct regular inspections to ensure process equipment meets industry standards.'

PES has 15 business days from receipt of the citations and penalties to comply, request an informal conference with OSHA's area director, or contest the findings before the independent Occupational Safety and Health Review Commission.

Magellan Midstream Partners will sell three marine storage terminals to Buckeye Partners for $250 million.

The three terminals are located in New Haven, Connecticut, Wilmington, Delaware and Marrero, Louisiana.

Michael Mears, chief executive officer, says: 'Magellan remains focused on capital discipline and managing our business for the long term. Optimisation of our asset portfolio, including divestiture of facilities outside our strategic footprint, is an important element to maximise unitholder value and our strong financial position.'

The sale is expected to close by late first quarter or early second quarter 2020.

I Squared Capital and Rubis will form a joint venture partnership through an investment in Rubis Terminal.

As part of the agreement, I Squared Capital will acquire 45% of the shares in Rubis Terminal and will jointly control the company alongside Rubis.

Rubis Terminals comprises 13 facilities and a capacity of 3.5 million m3 to provide critical bulk liquid storage infrastructure to a diversified base of industrial customers and across a broad range of petroleum, chemical and agri-food products. The partnership will accelerate Rubis Terminal's strategic plan to strengthen its position within its current footprint, diversify its product offerings and explore expansion outside of Europe.

Adil Rahmathulla, managing partner at I Squared Capital, says: 'The exclusive transaction with a listed industrial company is the result a deep relationship developed over many years.

'The existing portfolio provides a strong foundation for building Rubis Terminal into a leading storage company using the I Squared Capital platform approach of operational optimisation, bolt-on acquisition and select greenfield.'

The closing of the transaction should take place during the first half of 2020.

Elengy has announced that the Fos Tonkin terminal will continue operating at the site until 2028.

The proposed regasification capacity has been entirely booked (1.5 billion m3 per year) and this commitment has enabled Elengy to take the investment decision needed to extend the site's activity beyond 2020.

The LNG terminal can evolve as a multimodal platform in the western Mediterranean basin as it has significant assets enabling to offer a diversity of LNG services to its customers: rail, road, river and sea. In addition to the unloading and loading of LNG tankers, the terminal can offer the reloading of bunkering vessels.

The company says that the terminal is a key asset to support the energy transition and, as a result, it is now working on the development of the loading capacities for small LNG vessels in order to provide the market with the required services to support the growth of LNG as a marine fuel.

The terminal could also become a loading point for trains to supply LNG intermediate storage sites outside the LNG terminals. Elengy has already launched the necessary studies for rail connection.

Marquard & Bahls has acquired a minority stake in Nordic Blue Crude, a Norwegian pioneer in the power-to-liquid sector.

The investment is an important step for Marquard & Bahls to expand its existing portfolio towards renewable energies. The company is actively exploring investment opportunities in the renewable energy sector as a result of the rapidly changing energy landscape. It intends to become an active participant in the energy transition. As a first step in the renewable transport fuels, the company is now investing in Nordic Blue Crude.

The Norwegian company is on its way to establish the first publicly known power-to-liquid project on an industrial scale. It will provide crude with first mover advantages and will enable it for further expansion. The company is engineering its first E-Fuel 1 plant in Herøya with a production capacity of 10 million litres of synthetic hydrocarbons per year, using renewable electricity, water and CO2 as feedstocks. It is expected to reach full production capacity in 2022, with room for expansion to a further 100 million litres. After the refining step, the product mix will consist of kerosene, diesel, wax and naphtha.

Marquard & Bahls CEO Mark Garrett says: 'As part of our strategy, we intend to further diversify our portfolio and increase our commitment to renewable energies, among other things. Our investment in Nordic Blue Crude is an important first step in this direction. The project is the first of its kind for us, but others will follow if the right opportunities arise.'

The bulk liquid storage sector will have a key role to play in supporting and facilitating access to a broad mix of energy solutions as part of the energy transition.

A new report from the UK Tank Storage Association highlights the crucial role the sector will play not only in the energy transition but also in supporting the achievement of the UK's decarbonisation targets.

The bulk liquid storage sector already has some insight into what a changing landscape might mean for its infrastructure and is already active in many of the areas of growth that will drive success going forward. The report – Enabling the energy transition: the role of the bulk liquid storage sector – considers the investment needs, focus areas and collaborative strategies that will unlock future opportunities and create the necessary flexibility to manage change.

In the report executive director Peter Davidson says that there are two key aspects to ensure solutions for change are successful – significant investment in enabling infrastructure and collaboration & partnership.

He says: 'The UK's bulk liquid storage sector supports growth and prosperity by importing, exporting, storing and blending liquid products that are integral to our daily lives.

'As essential energy partners, we are determined to up the ante and ensure that our sector can support and facilitate access to the broad mix of energy solutions that will be necessary to meet the UK's emissions reduction targets. We stand ready to work together with the UK government and all partners towards achieving our ambitious vision for the future of the bulk liquid storage sector.'

Read the report in full here.

Four leading industry figures in the tank storage sector have been shortlisted for the Outstanding Achievement Award at the 2020 Global Tank Storage Awards.

All nominees have an extensive amount of experience within the tank storage sector, as well as a multitude of achievements, ranging from major company turnarounds to being at the forefront of ambitious company growth.

This is the only category being voted on solely by the industry and voting will close on February 14. Nominations for the remaining award categories, which are judged by an independent panel of experts, are still being accepted until February 7.

The finalists for the 2020 Outstanding Achievement Award are:

• Kathryn Clay, president, ILTA

• Nuria Blasco, general manager, Tepsa

• Frank Erekelens, group CEO, LBC Tank Terminals

• Gert van Meijeren, CEO, CTS

The awards, which are free to enter, celebrate excellence, safety and innovation in the industry, with the award categories relating to terminal achievements, equipment innovations, port innovations and individual success.

All categories except for the Outstanding Achievement Award will be judged by an independent panel of industry leaders from companies including Ineos, Kinder Morgan, Stolthaven, Shell, BP, Oiltanking, Inter Terminals, VTTI, Vopak and Koole.

The winners will be announced on March 10 in Rotterdam. Hosted by market-leading publication, Tank Storage Magazine, the gala dinner & ceremony attracts more than 200 terminal professionals each year, from as far as Saudi Arabia, India, Malaysia, South Africa, the US and across Europe.

The event comprises an all-inclusive drinks reception, a three-course dinner, captivating entertainment, a casino and much more. It is an exclusive opportunity to entertain clients and reward colleagues for their hard work throughout the year.

Everyone in the industry is entitled to one vote each. Read more about those who have been shortlisted and place your vote now by visiting the awards website.

Abu Dhabi and Japan have signed an energy cooperation agreement concerning the storage of more than eight million barrels of crude oil.

The agreement, which extends a previous oil storage deal that came to an end at the end of 2019, will allow ADNOC to store crude oil at facilities in Japan. This oil can be traded to customers and ensure Japan has a supply in the event of a disruption or shortage.

Dr Sultan Ahmend Al-Jaber, UAE minster of state and ADNOC group CEO, says: 'The new agreement with the agency for natural resources and energy to store Abu Dhabi crude oil in Japan further strengthens the excellent working relationship between the UAE and our Japanese counterparts.'

Japan's state minister of economy, trade and industry Makihara Hideki says: 'The joint oil storage project is a most symbolic and mutually beneficial project for both countries. I really hope that our bilateral relationship between Japan and UAE will be further strengthened through the project.'

2020 is set to be a crucial year for the European gas market as the industry deals with storage and pricing issues in an increasingly oversupplied market at the same time as the European Green Deal casts doubt over the long-term future for gas in Europe's energy mix. Murray Douglas, director, European Gas at Wood Mackenzie, looks at the key issues facing the sector.

Legacy suppliers learn value of flexibility

'In 2019, supplier response to low gas prices varied across markets,' he says.

'Norway and Algeria are two important examples of how supplier flexibility has been critical in adapting to changing market dynamics and balancing the global LNG market.'

Norwegian production was low in the second half of 2019 - and not just because of unplanned maintenance at several pipelines and fields, including Aasta Hansteen and Ormen Lange. Low output was also a result of Equinor reducing production from Troll and Oseberg – its key flexible fields – in a low-priced environment.

Douglas says: 'We expect Norway to continue pursuing its value over volume strategy by withholding sales gas from the market during times of low prices. Most of this reduction will take place at Equinor's Troll field, although other players like Total and Shell may also decide to follow the reduction should prices fall further.

'As the oversupply intensifies through 2020, we expect Norway to withhold 4 billion m3 from flexible fields.'

In Algeria, LNG provided an outlet for supply, as buyers nominated down on oil-indexed pipeline contracts. Piped flows to Italy and Spain collapsed almost 40% for the year-to-date versus 2018, while LNG exports were up 20%. Pipeline contracts that were due to expire have all been renewed and will start over the next year.

'Piped exports from Algeria will remain flat into 2020, averaging 21 billion m3 to Spain and Italy. However, the risks are weighted to the downside as the pipeline contract extensions will provide more volume flexibility to buyers and Algeria's own domestic demand continues to build year-on-year.'

European gas storage – struggling to get down

With plentiful supplies of cheap pipeline gas and LNG still available, the use of storage in the first quarter of 2020 will turn out to be below average. This is reflected in Wood Mackenzie's view that there will be 45 billion m3 still in storage at the end of March, versus the five-year average of 40 billion cm.

'The outlook is developed assuming average weather for the coming winter – a situation which rarely occurs. Assuming uninterrupted Ukrainian transit, the impact of weather will have an amplified effect on the market.

'In the event of a cold winter, storage could get down to 30 billion m3 by the end of winter. But a mild winter could lead to gas levels in store remaining as high as 54 billion m3 at the end of March – a key concern for those looking to market gas into Europe.'

Storage levels at the end of March will have a significant bearing on the summer 2020 gas market as storage demand makes up a significant proportion of European summer demand.

He adds: 'If European injection requirements are significantly lower than average, we get into some real challenges on Europe's ability to continue absorbing the level of LNG supply growth.

'The implications for the wider global gas market are significant – expect increased interest in European storage not just from European players but from those much further afield.'

Oversupply to deliver even lower prices (and infrastructure bottlenecks)

European gas prices have been on a downward trajectory since October 2018, with TTF hitting an all-time monthly low of US$3.1 per million British thermal units (mmbtu) in September 2019.

And with Ukrainian gas transit secured following the signing of a new agreement with Russia, this means the prospects for price recovery in 2020 are non-existent.

As the European LNG marketplace becomes increasingly congested, some infrastructure constraints will surface and place further downward pressure on hub prices. This will become particularly acute in the UK during summer where regas utilisation will be capped at 75%, assuming Norwegian pipeline deliveries follow historical trends.

The UK's lack of long-range storage; low summer demand (UK coal has already been displaced); and the available exit capacity into continental Europe and Ireland will place physical constraints on LNG send-out.

Norwegian pipeline deliveries to the UK will come under serious pressure and we will see significant volatility in NBP-TTF differentials through the summer.

A European Green Deal

The EU's has pledged to become climate-neutral by 2050. The drive to decarbonise continues to gain momentum and policy remains the key enabler.

The European Investment Bank's recent announcement shows the scale of the ambition – it will stop lending to unabated fossil fuel projects from 2021.

But Europe wants to go beyond simply maintaining its leadership position in carbon emissions reduction, it wants to commit to accelerate the change.

The new President of the European Commission, Ursula von der Leyen, has begun her tenure by raising the bar on climate-related policy through a European Green Deal.

At the heart of the package lies a bold proposal for a legally binding commitment to climate-neutrality by 2050 for the EU.

Douglas says: 'In order to bring this target into range, the Commission will outline a pathway to decrease the EU's emissions in 2030 by at least 50% and towards 55% below 1990 levels (the current target is for 40%).

'Regardless of whether such a shift is achievable by 2030, it underlines the scale of the ambition. Indeed, President von der Leyen has described the European Green Deal as 'Europe's man on the moon moment'.

'A Carbon Border Adjustment Mechanism – to capture carbon costs associated with imports – features in the European Green Deal and could have a significant impact for gas and LNG exporters.

'With growing societal pressure to tackle climate change, EU policy makers are now more explicit that gas must be decarbonised along the full value chain. Gas must demonstrate it can narrow the gap with low-carbon energy through action to cut carbon and methane emissions.'

Douglas concludes: 'Price remains king. However, we will see a significant ramp-up in buyers and investors focused on the green credentials of companies operating along the gas supply chain.

'How companies are positioned on carbon intensity and, especially, how they are measuring and tackling methane emissions will become a more central feature for gas supply in 2020.'

Kinder Morgan has sold all 25 million of its shares in Pembina Pipeline for$764 million.

The company says that the sale is consistent with its intention to convert the shares into cash in an opportunistic and non-disruptive manner.

Kinder Morgan will use the proceeds to pay down debt – creating balance sheet flexibility in 2020.

Mabanaft has become an operating partner and ammonia offtaker in Gulf Coast Ammonia, a new ammonia production plant in Texas City.

Gulf Coast Ammonia, jointly owned and controlled by Starwood Energy Group and Mabanaft, issued a formal notice at the end of December to proceed with turnkey construction of an ammonia production plant with nameplate capacity of 1.3 million metric tonnes per year to built at a brownfield site in Texas City. The facilities are expected to enter commercial levels of production in the first half of 2023. Air Products will serve as exclusive supplier of all hydrogen and nitrogen feedstock requirements.

GCA has concluded long-term offtake agreements for the entire nameplate production capacity, of which 500,000 metric tonnes of ammonia per year will be marketed by Mabanaft. The project offers advantageous logistics with 70,000 metric tonnes of on-site storage and a dedicated, deep-water jetty capable of loading domestic barges as well as the largest sea going ammonia carriers to reach global ammonia markets. The marine facilities will be owned and operated by Oiltanking, part of Mabanaft.

Tim Bullock, CEO of Mabanaft, says: 'Mabanaft is very excited to be investor and offtaker to this project. This is a major step for Mabanaft to diversify its portfolio in growing chemical markets in line with the new group strategy.'

The first cargo of ethylene has been exported from Enterprise Products Partners and Navigator Holdings' joint venture marine terminal at Morgan's Point, Texas.

The Navigator Europa recently departed the facility carrying 25 million pounds of ethylene for Marubeni, a large Japanese trading company.

The new terminal located along the Houston Ship Channel features two docks and the capacity to load 2.2 billion pounds per year of ethylene. A refrigerated storage tank for 66 million pounds of ethylene is also being built on site and will increase the capability to load ethylene up to a rate of 2.2 million pounds per hour. Construction is expected to be completed in the fourth quarter of 2020.

The facility is pipeline-connected to Enterprise's Mont Belvieu, Texas complex, where the company is in the process of commissioning a high-capacity ethylene salt dome storage well with a capacity of 600 million pounds. Enterprise has designed the system to serve as an open market storage and trading hub for the ethylene industry through storage, connections to multiple ethylene pipelines and high-capacity export capabilities.

A.J. 'Jim' Teague, CEO of Enterprises general partner, says: 'Because of abundant natural gas liquids thanks to the shale revolution, the US is now a global leader in ethylene production, with an unprecedented buildout of mostly ethane crackers along the Texas and Louisiana Gulf Coast, providing hundreds of thousands of jobs to local economies.

'Including a second wave of new petrochemical plants now being developed, production of ethylene is poised for continued growth and is expected to exceed 100 billion pounds per year by 2025.

In addition to the new terminal and storage infrastructure are two projects Enterprise is developing that will extend its ethylene pipeline and logistics system further into South Texas, which is a leading growth area for new crackers and ethylene derivative plants.