Latest storage news
LBC Tank Terminals has appointed Frank Erkelens as its new group CEO, replacing Walter Wattenbergh who is set to retire.
Erkelens, who has extensive international leadership experience in the tank terminals and logistics sector and was recently CEO of Odfjell Terminals, will start on October 15. Wattenbergh will retire from the company on September 30.
Erkelens says: 'It is a privilege and I am very excited to lead LBG into the next phase of its development and to deliver long-term growth and value creation. Under the leadership of Walter, LBC underwent a substantial turnaround and the company is well positioned to capture the growth opportunities in the markets it is serving.
'With the support of LBC's strong shareholders and together with the team at LBC the focus will be on delivering value for LBC's customers, shareholders, partners and employees, as this will continue to drive LBC's success and growth in the future.'
LBC Tank Terminals' chairman Haroun van Hövell adds: 'Suring nearly five years with the company, Walter has successfully led LBC through a significant turnaround by streamlining the business and refocusing on growth initiatives in order to better serve client needs. We are very grateful to Walter for the many contributions he has made
'[Frank's] vast experience, track record and strong reputation will be of great value to LBC. Frank will build on Walter's legacy and steer the business through the next phase of its strategic development.'
Wattenbergh says: 'It was a great pleasure to work with so many talented professionals at LBC and to see the company flourish. I am pleased to leave the organisation in the very capable hands of Frank.'
A drone attack on the world's biggest crude-processing facility removed 5% of global oil supplies and caused London's Brent futures to surge $12 when trading opened on Monday.
The attack on Saudi Aramco's Abqaiq facility and its Khuaris oil field on Saturday resulted in the production suspension of 5.7 million barrels of crude oil per day, which accounts for more than half of Saudi Arabia's global daily exports.
Following the UAV attack, oil posted its biggest ever intraday jump to more than $71 a barrel according to Bloomberg. London's Brent futures increase is the most in dollar terms since they were launched in 1988 and experts says that crude could still post its biggest one-day percentage gain in nearly three years.
The news agency reports that the US blames the attack on Iran and says that it is the single worst sudden disruption ever.
Amin Nasser, Saudi Aramco president and CEO, says: 'We are gratified that there were no injuries. I would like to thank all teams that responded timely to the incidents and brought the situation under control. Work is underway to restore production.'
Saul Kavonic, an energy analyst at Credit Suisse Group, says that the market has never seen a supply disruption and price response like this in the oil market.
Alan Gelder, Wood Mackenzie VP for refining, chemicals and oil markets, says: 'This attack has material implications for the oil market, as a loss of five million barrels per day of supplies from Saudi Arabia cannot be met for long by existing inventories and the limited spare capacity of the other OPEC+ group members. A geopolitical risk premium will return to the oil price.'
Vima Jayabalan, Wood Mackenzie's research director says that China, South Korea, Japan and India are the biggest takers of Arab Extra Light and Arab Light crude oil, which Abqaiq and Khurais are the main processing centres for and that Asia's dependence on Saudi Arabian crude has increased significantly over the last year-and-a-half.
'The impact and the next course of action will depend on the duration of the outage,' he says. 'Saudi Arabia has enough reserves to cover the shortfall over the next week, but if the outage extends, then filling the gap with the right type of crude quality could be a challenge.
'In terms of refining and petrochemicals, the spike in crude oil prices will dent margins further.
'A prolonged outage and/or further upside above-ground risks in the near term could have an impact on the preparation ahead of the IMO marine bunker specifications change, but at the moment it is still early days to assess.'
Black Diamond Gathering, the joint venture between Noble Midstream Partners and Greenfield Midstream, has formed a strategic relationship with Saddlehorn Pipeline Company.
The relationship includes an option for Black Diamond to take a 20% ownership in Saddlehorn. This investment option expires in April 2020. Black Diamond, which provides crude oil gathering and storage services to producers in the Denver Julesburg Basin, made commitments during Saddlehorn's recent open season.
Saddlehorn can currently transport 190,000 barrels per day of crude oil and condensate from the DJ and Powder River Basins to storage facilities in Cushing, Oklahoma owned by Magellan and Plains.
Following the open season, the pipeline will be expanded by 100 mbbl/d and will have a new total capacity of 290 mbbl/d. This is expected to come online in late 2020. Upon an option exercise by Black Diamond, Magellan and Plains would each sell-down their equity interests in Saddlehorn to Black Diamond on an equal 10% basis while WES would retain its 20% equity ownership.
Brent Smolik, Noble Midstream's CEO, says: 'Saddlehorn is an important long-haul outlet from the DJ and Powder River Basins with premier midstream equity partners and commitments from high-quality producers. This opportunity is a natural expansion of Black Diamond's strategic footprint, with the ability to realise economics further down the crude oil value chain while enhancing the all-in value proposition for our customers.
'We are excited by another potential long-haul pipeline investment and believe this opportunity reflects our strategic advantage and differentiated playbook for long-term growth and value creation.'
Additionally, Black Diamond also added a 15-year oil gathering dedication from Verdad Resources, which comprises 85,000 acres and more than 750 potential drilling locations in the DJ Basin. This increases the total acreage dedicated to the Black Diamond system to 243,000 acres.
As of Monday, September 9 total oil product stocks in Fujairah stood at 17.355 million barrels. Stocks fell by 2.54 million barrels week on week. This is the first time they have stood around 17 million barrels since the end of 2018 when they fell to 17.348 million barrels on December 31, 2018. Overall product stocks fell by 12.8% with a drawdown across all three product stock categories.
Stocks of light distillates fell by 438,000 barrels reflecting a fall of 7.2% week on week. Total volumes stood at 5.654 million barrels. This is the lowest level since late August last year when they stood at 5.225 million barrels on August 27, 2018. Gasoline East of Suez remained supported sources noted with refinery outages in Asia propping up the market, sources noted. The FOB Singapore 92 RON gasoline crack against front month ICE Brent was assessed at $5.68/b on Tuesday, reflecting a rise of $1.14/b week on week, S&P Global Platts data showed
Stocks of middle distillates fell by 24.8%, drawing down 486,000 barrels to stand at 1.472 million barrels at the start of the week. This is the lowest level since late January when they stood at 1.269 million barrels on January 28 this year. Sentiment in the East of Suez gasoil market remained bearish amid tepid demand, sources said. 'Demand for gasoil cargoes in North Asia is quite bad now, and there are a lot of prompt cargoes around...the front-month backwardation is also starting to flatten out,' an industry source said.
Stocks of heavy distillates fell by 13.6%, drawing down by 1.616 million barrels on the week to stand at 10.229 million barrels. Tight availability in Singapore for delivered bunkers in comparison to Fujairah was leading to the persistence of a relatively wide price spread between the two ports. The spread between 380 CST delivered bunker in Singapore and Fujairah was assessed at $33.25/mt yesterday with the South East Asian port seeing premiums compared to the Arab Gulf port fall $12.25/mt week on week.
Valero Energy and Darling Ingredients have initiated an advanced engineering and development cost review for a new renewable diesel plant in Port Arthur, Texas.
The proposed facility under review would product 400 million gallons of renewable diesel annually as well as 40 million gallons of renewable naphtha. It would help address the growing demand for renewable diesel in global, low-carbon markets.
The new plant would be owned and operated by Diamond Green Diesel, the 50/50 joint venture between the two companies.
The plant, which would be the first renewable diesel facility in Texas, would be located to leverage Valero's existing refinery and optimise logistics management. The production from the facility would increase Diamond Green Diesel's annual renewable diesel production to 1.1 billion gallons with nearly 100 million gallons of renewable naphtha production.
The final investment decision is expected in 2021, with expected operations commencing in 2024.
Joe Gorder, Valero chairman, president and CEO, says: 'We expect low-carbon fuel mandates across the globe to continue to drive demand growth for renewable fuels. This project would meaningfully expand our renewable diesel segment, which continues to generate strong results, and demonstrates our commitment to environmentally responsible operations.
DGD's future total annual capacity includes production from its Louisiana plant, which is currently being expanded to produce 675 million gallons of renewable diesel and 60 million gallons of naphtha. This expansion is expected to be complete by the end of 2021.
Vopak has acquired a 49% stake in Sociedad Portuaria el Cayao, an LNG import facility in Cartagena, Colombia.
The facility is the only LNG import facility in Colombia and has been in operation since 2016.
It comprises an LNG jetty, onshore infrastructure and a 9.2km gas pipeline that connects SPEC to the natural gas grid. A chartered FSRU is receiving the LNG and sending the gas on shore. SPEC holds long term contracts with three local gas-fired power plants.
The shareholders are now Promigas, with a 51% share and Vopak, with 49%.
Eelco Hoekstra, chairman of the executive board and CEO of Vopak, says: 'We are very much looking forward to the partnership with Promigas and to enter into the growing Colombian LNG market. This is another growth step in our LNG portfolio and it fits very well in our ambitions to grow and diversify our service offering in LNG.'
The first expansion phase at Vopak's Veracruz terminal in Mexico has started operations.
Phase 1 began operations early in September with the launch of new fillers and 200 auto-tanks operating daily 24 hours a day.
Vopak says that along with its customer, it now supports the commercialization of diesel and gasoline in the Mexican market, which will allow supply, especially to the state of Veracruz, Puebla and in some cases Mexico City, with imported fuel and diesel.
Oman Oil and Orpic Group have signed an MoU with SK Engineering & Construction for the development of the storage and terminal business in Duqm.
The MoU covers the development of a storage and terminal business in the country's special economic zone. Both parties will work closely to establish an anchor customer base and explore interest from strategic partners for the project.
The project will focus on utilising natural caverns to store oil and taking advantage of Oman's geological formations and geographical location.
Delta Western has paid a $400,000 penalty and committed to install internal floating roofs to three tanks following alleged Clean Air Act violations.
The US-based independent distributor, which distributes diesel and gasoline to commercial customers in Alaska from its Juneau facility, was alleged to have violated the Clean Air Act's new source performance standards for storage vessels and gasoline distribution terminals.
The Environmental Protection Agency alleged that the company failed to comply with the National Emission Standards for hazardous air pollutants that apply to bulk gasoline distribution and dispensing facilities.
Ed Kowalski, director of EPA's enforcement and compliant assurance division in Seattle, Washington, says that the scope and scale of the company's operation required them to install adequate air pollution control equipment and technology at their facility.
'When terminals handle a certain volume of petroleum, more sophisticated pollution controls must be installed to reduce emissions of hazardous pollutants and better protect people and the environment. We are glad to hear that the required equipment to reduce harmful air emissions is either now installed or will be shortly.'
The company will be installing internal floating roofs to control emissions from three high capacity gasoline storage tanks and install additional controls to reduce emissions from gasoline delivery trucks loading at its terminal. These upgrades are scheduled to be complete by the end of October 2019. Installation of these controls will significantly reduce the emissions of toxic vapours from the terminal.
The US Federal Energy Regulatory Commission has accepted Commonwealth Projects' LNG project application.
The project comprises the construction of one LNG plant, including six gas liquefaction trains and appurtenant facilities. Each train will have a liquefaction design capacity of 1.4 million metric tonnes per annum for a total nominal liquefaction capacity of 8.4 mtpa.
It will also include six LNG storage tanks, each with a capacity of 40,000 m3, one marine loading berth and a 3.04-miles long, 30-inch diameter pipeline that will connect the LNG facility with existing intrastate and interstate pipelines for the purpose of supplying gas to the project.
Paul Varello, president and CEO of Commonwealth, says: 'FERC's formal acceptance of Commonwealth LNG project's filing application marks another significant milestone achieved by the Commonwealth LNG team and represents an important step in progressing the project and moving closer to a final investment decision.
A final investment decision on the project is expected to be taken in the fourth quarter of 2020. Commonwealth remains on schedule to start operations of the 8.4 mtpa facility in the first quarter of 2024.
Saudi Aramco has signed an MoU to facilitate the acquisition of a stake in a refinery and petrochemical complex as well as using a storage facility to serve its customers in Asia.
The company plans to acquire a 9% stakes in the Zhejiang integrated refinery and petrochemical complex. The MoU also includes a long-term crude oil supply agreement and the ability to utilise Zhejiang Petrochemical's large crude oil storage facility for its customers in Asia.
The agreement solidifies Saudi Aramco's participation in the 400,000 barrels per day refinery from Phase III of the Zhoushan Petrochemical Greenfield project, and also allows the parties to evaluate potential opportunities for investment in other pars of the value chain. These may include refining and petrochemical production, storage and trade of crude oil and natural gas, retail, as well as distribution of oil products within the Zhejiang Free Trade Zone.
Chye Poh Chua, founder of ShipsFocus, explains how big data and artificial intelligence was used at Singapore's port to reduce wait time and enhance storage terminal utilisation
The prospect has never been brighter for the tanker shipping and tank terminal industries in dealing with wait time and utilisation in ports.
The advent of big data, AI & Industry 4.0 technologies has given rise to new applications that help overcome many problems that those in the energy and chemical industry have learnt to live with.
Tanker arrivals at Singapore’s port make up the highest share among all cargo ship arrivals1 at 38%. Of these arrivals, 51% are for cargo operations at the more than 45 tank terminals and almost 200 jetties among them. Many
of them spend up to three days in port. Once in port, there are many intrinsic activities and events including getting to and staying at the terminal & berth until the ship departs from the port.
Wait time occurs in each of these various junctures until resources are appropriately allocated. This means that in Singapore port’s self organised ecosystem including the absence of a daily ‘port line-up’ these terminals and jetties work in silo without the visibility of resource readiness or availability beyond a disparately and bilaterally dependent communication.
Last but not least, due to the dynamic resource allocation problem along with other issues, many of the stakeholders rely on manual systems to conduct their operations. Even though many have kept records of their activities, their non-digitised data is often incomplete, erroneous, non-standardised, which limits meaningful usage of the data. Portview was developed to try and mitigate these problems.
Due to an absence of data from the stakeholders, Portview was based on ships’ AIS data2. Consequently, Portview was offered as an online tool that provides near-time and visualised clarity of ships and their arrivals in port, terminals and jetties in Singapore.
The aim for Portview is to be a data-driven, AI-enabled, decisionsupport coordination platform to facilitate tanker operations in port, to improve productivity and optimise efficiency. As a result, ShipsFocus entered into a collaboration with the Institute of High Performance Computing (an A*Star member) in 2018 to develop predictive and optimiser engines for this purpose.
Portview users now have near-time access ships’ data, their positions, wait-time at the anchorage, stay-time at the jetty, plus a slew of visualisations and interactive data and analytics of the performance of tank terminals.
BIG DATA & AI APPLICATIONS
As most of the stakeholders in the port network rely on analogue systems in their daily operations, concepts such as big data and AI, which are founded on a digital system, could be unfamiliar to them.
To move on to these applications, these stakeholders must digitise first. However, such change can be enormous for it is fundamentally a change of system that will involve several things. Portview is used as a ‘short-cut’ as a way to help these stakeholders digitise from 0 to 1. The platform shares suitable data and analytics with the relevant stakeholder.
WAIT TIME AND TERMINAL UTILISATION
For carriers and tank-terminals, a ship’s wait time and terminal utilisation are key concerns, even though most have come to accept these as norms. Portview can help them to identify systematically where the exact nodes on the chain that generate most wait times and why. Often, the stakeholders realise that they did not have sufficient data to explain intelligently the true causes of these wait times in spite of their regular occurrence.
In this process, stakeholders are proactively seeking digitisation solutions. ShipsFocus usually suggests an ‘entry-level’ approach and identifies a small or ‘data-capturing’ operation, for example the terminal’s jetty scheduling.
A scheduling tool is then recommended to capture data digitally and naturally in the work process of the scheduler. This requires a change of habit for the scheduler. But consistent usage ensures that this new skill is acquired quickly. Manual data-recording activity is completely eradicated as a result.
More applications are being added to Portview as different stakeholders combine their own data, some of which is proprietary, to create new values, specifically in reducing wait time, demurrage and improving utilisation.
During the development of Portview, ShipsFocus identified several key takeaways that can help key stakeholders:
1. The company’s domain understanding was much appreciated as some were frustrated with the inability to ‘keep up’ to the hype, as most research and materials available were for the container segment, which was unsuitable;
2. Many erroneously believed an analogue system was needed for dynamic operations like booking, scheduling, and event recording. These involve tediously repetitious work and data-entry processes. Also, the data generated is often dirty due to entry errors, omissions and non-standardised practices;
3. Many liked the SaaS (Software as a Service) subscription model, which reduces heavy upfront cost and risk of non-delivery;
4. Many did not know how to link big data, or AI with their current operations. Portview eradicates the need to understand big data and AI and integrates with the company’s day-to-day operations acting as a tool and providing supportive decision-making insights;
5. Even with many stakeholders hesitant to share data, Portview was able to identify ship call-patterns that show benefits of coordination among the terminals.
1. Based on MPA 2018 figures.
2. The automatic identification system (AIS) is an automatic tracking
system that uses transponders on ships and is used by vessel traffic
services (VTS). When satellites are used to detect AIS signatures, the
term Satellite-AIS (S-AIS) is used.
Chye Poh Chua will be talking more about the application of big data and AI in reducing waiting times and to enhance terminal utilisation, along with Mark Lim from Stolthaven Terminals, during the second day of the Tank Storage Asia conference on September 26. For more information visit www.tankstorageasia.com.
Two storage terminals in the path of Hurricane Dorian sustained damage as the category 5 storm moved across the Bahamas and up the east coast of Florida.
The deadly storm, which wrecked devastation on communities in the Bahamas, has killed at least 50 people in the country and destroyed or severely damaged 13,000 homes when the storm hit with winds of up to 185 mph.
Dorian equalled the highest winds ever recorded for a hurricane at landfall when it struck the Abaco Islands. The storm then moved north-west and across Florida's east coast.
Equinor says that its South Riding terminal in the Bahamas, which comprises 6.75 million barrels of crude and condensate storage capacity, sustained damage and that oil was observed on the ground outside of the onshore tanks. All personnel in the Bahamas were confirmed safe and accounted for.
Equinor has a team working at the terminal, including an advanced onshore response team with oil spill technical specialists.
At the time of printing, an onshore team started to recover oil and move it into tank storage. A response team continues to assess the damage and plan the recovery work. Initial recovery assets have been deployed and additional machinery and equipment is being added. The company says that no oil is leaking from the terminal.
Equinor has donated $1 million to one or more relief organisations involved in the response for the Bahamas.
The storm also passed over Buckeye Partners' Bahamas Hub, a 26-million-barrels petroleum storage, transshipment and blending facility at Freeport.
Initial assessments found minor damage to the facility from wind and rain, and no indications of any product release.
The company has partially resumed operations at the terminal. Work continues on completing final assessments and restoring full operations at the facility in the near future.
NuStar Energy has completed three key pipeline projects that significantly expand its capacity to move products to Corpus Christi and Northern Mexico.
The company recently completed a project connecting its existing 16-inch pipeline in South Texas to the Plains Cactus II pipeline that transports WTI volumes from the Permian Basin to South Texas. It also completed the second stage of its WTI export project, a new eight-mile 30-inch pipeline to transport crude oil from a connection to the Plains Cactus II long-haul pipeline in Taft, Texas, to its Corpus Christi terminal.
NuStar is also building 600,000 barrels of additional storage at the Corpus Christi terminal, which will bring its total capacity to 3.9 million barrels. This project is expected to be completed in December 2019.
Brad Barron, NuStar president and CEO, says: 'We are very excited about the continued growth of our South Texas Crude System, which is once again experiencing throughput at near the historically high levels we saw in the Eagle Ford's heyday in 2015, and the increased utilisation of our Corpus Christi export terminal, which is now handling the leading edge of the impending wave of Permian long-haul crude oil.
Additionally, the company is moving volumes on its newly expanded Valley Pipeline System in South Texas after increasing the system's capacity to supply refined products from Corpus Christ to the Rio Grande Valley and Northern Mexico. The expansion doubles the pipeline's capacity to 90,000 barrels per day.
NuStar also began moving volumes of diesel into Northern Mexico following the reactivation of its existing refined products pipeline connecting its Laredo Terminal in South Texas and its Nuevo Lardeo Terminal in Mexico. The company is currently building additional tankage and truck loading bays at the Nuevo Lardeo Terminal, all of which are expected to be completed in February 2020.
'We are pleased we were able to utilize and expand existing assets to help address the supply imbalance in Northern Mexico that is expected to continue growing and exceeding that country's infrastructure.
'It is an amazing coincidence that all three of these projects, each of which has been years in the making, all began moving volumes within 24 hours of each other.'
Koole Terminals & Maersk Oil Trading will start producing IMO 2020-compliant bunker fuel.
Production will take place at the Petrochemical Industrial Distillation (PID) unit, located at Koole's Botlek site in the Port of Rotterdam. The toll distillation deal allows Maersk to product very low sulphur fuel bunker fuels and will enable Maersk to further expand its bunker supply volumes in Europe.
Annual production is expected to cover 5% to 10% of Maersk's annual fuel demand.
John Kraakman, CEO of Koole Terminals, says: 'Koole Terminals continues to explore opportunities to contribute to a sustainable society. One of the initiatives is to utilise our PID unit for producing environmentally friendly transportation fuels. We are proud to partner with Maersk and produce a low sulphur bunker fuel to support the reduction of sulphur emissions in order to reduce air pollution.'
Head of Maersk Oil Trading at A.P Moller – Maersk Niels Henrik Lindegaard adds: 'The fuel manufacturing process allows Maersk to produce compatible low sulphur fuels that comply with the IMO 2020 sulphur cap implementation, reducing the need to rely on 0.1% price-based gasoil and fuel oil outside the ECA zones.
'Our activities with Koole will be an important driver in ensuring stable, reliable services for Maersk's customers during a potentially volatile period for global shipping.'
Qatar Terminal and Fluxys LNG have signed a long-term LNG Services Agreement for the Zeebrugge LNG terminal.
Under the agreement, Qatar Terminal subscribes unloading slots at the facility from the expiry of the current long-term unloading contracts and up to 2044.
His Excellency Saad Sherida Al-Kaabi, Qatar's minister of state for energy and president and CEO of Qatar Petroleum, says: 'We believe this will further support our customers in Belgium and Europe in general, by providing them access to reliable LNG supplies from Qatar and allowing them to maximise the utilisation of such supplies.
'Qatar Petroleum has long invested in and anchored LNG receiving terminal capacity in Europe, a key LNG market, as part of our supply destination portfolio diversification strategy. We continue to be committed to supporting the EU's energy policies and to providing reliable energy supplies into Europe.'
Pascal De Buck, CEO and chairman of the executive board of Fluxys Belgium, adds: 'This agreement further extends our long-standing cooperation with Qatari partners, secures long-term activity at the Zeebrugge terminal and further strengthens the facility's position as a versatile LNG gateway into Europe offering customers optimum destination flexibility.'