Tank Storage Magazine v04 i01


Volume: 4
Issue: 1
Date Published: January 1, 2008



Stepping up to the challenge

Following Paris-based LBC Tank Terminals’ recent foray into the Asian terminal sector, the head of alternative investments for the major shareholder, Challenger Infrastructure Fund, talks to Tank Storage magazine about its future plans Challenger Financial Services is a household name in Australia, known to many as a leading investment, mortgage, funds management and financial services group. ChallengerÍs Asset Management division has responsibility for the Challenger Life company balance sheet, which invests in just three classes of asset including, over the past three years, infrastructure and infrastructure-like assets. Earlier this year ChallengerÍs Australian Stock Exchangelisted Infrastructure Fund (CIF) further diversified by acquiring various petrochemical terminals around the world. And the Challenger Group has no intention of stopping there. ïTank storage is an essential link between important products and the economy,Í explains Emil Pahljina, executive director, Infrastructure at Challenger. ïWe have a real appetite to expand our presence in the sector.Í Challenger has spent A$1.2 billion (€0.7 billion) in the terminal industry over the last six months, and would be happy to spend the same amount again. ïWeÍve been researching this market for over 18 months now,Í states Pahljina. ïWeÍre very keen to move forward, especially using the existing platform that LBC provides.Í The company chose to acquire LBC partly due to its strong presence in Europe and the US, and partly due to the capability of the existing management team. ïWe are a people company,Í says Pahljina. ïWe always work closely with the management team when acquiring any company and, at the same time, we bring our own business and commercial experience and we stay very involved with any investment we make on a day-to-day basis.Í To read this article in full you will need to subscribe to Tank Storage Magazine or buy the back-issue. Click here for further details

Seizing a sound opportunity

Although Dong Energy might not view storage as its core business, it is still managing to keep ahead of its competitors Dong Energy ¿ the result of a merger between Dong, Elsam, NESA, Energi E2, Frederiksberg Forsyning and the electricity division of KÀbenhavns Energi ¿ is the leading Danish energy company. It is active in every link of the energy chain, from offshore production platforms in the North Sea to power plants and wind farms and finally to sale and distribution. But one area which the company had not been involved in, until a couple of years ago, is storage. In the 60s and 70s Dong EnergyÍs power plants were almost entirely run on fuel oil, due to the low price of crude oil. But during the oil crises of the 70s, the rising price of crude oil rendered fuel oil too expensive to be a viable source, so the plants were switched to run on coal (this being a major task, was carried out during the first half of the 80s). This left an array of storage tanks empty at power plants situated around the country, and around the turn of the Millennium, the idea to seize the opportunity to move into the storage sector was born. In 2002 the former refinery area owned by Kuwait Petroleum, Gulfhavn, was purchased by Dong Energy for strategic reasons ¿ the processing unit had been removed from Gulfhavn, but with the acreage Dong Energy acquired some 40 oil storage tanks and a loading pier. For various reasons, it was not until late 2003 that the business unit Dong Energy Oil Terminals was created, and only by the start of 2004 that the first oil was imported. To read this article in full you will need to subscribe to Tank Storage Magazine or buy the back-issue. Click here for further details

Russia revolutionises the Baltic: from mutual reliance to the cold shoulder

Politics, history and Slavic pride are at the root of so much that goes on in the former Soviet Union. RussiaÍs temporary cut of oil product deliveries to Estonia last year, in a row over a statue, showed just how much power it still has over its formerly Soviet neighbours, and just how reliant Baltic ports still are on Russia exports For the Baltic region ¿ Lithuania, Latvia and Estonia in particular ¿ the irony of being in such close proximity to the second biggest oil exporter in the world, yet being sidelined, must be almost too much to bear. The Soviet Union depended heavily on the ports of the three Baltic states for access to key European markets but, when the Iron Curtain fell, Russia lost a lot of its direct connections to the Baltic Sea. Rather than resign itself to being dependent on transit countries, it has, perhaps wholly expectedly, invested millions in the development of its own Baltic ports further north, much to the dismay and economic disadvantage of its formerly Soviet neighbours. Most of RussiaÍs product exports consist of fuel oil, including mazut ¿ a low quality but highly-calorific fuel oil ¿ and diesel, destined for heating use in European countries and the US. According to International Energy Agency (IEA) figures, in 2006 Russia exported almost 4 million barrels per day (bpd) of crude oil and over 2 million bpd of oil products. Russian oil products exports to the US alone reached 262,000 bpd in 2006, from 11,000 bpd in 1995. The Baltic Sea plays a key role in much of this movement, with Baltic ports almost 95% reliant on Russian exports. But while RussiaÍs domestic production and exports have soared since the mid-1990s, so have the capacities of its own Baltic ports. Losing direct access to seaports like LatviaÍs Ventspils upon the dissolution of the Soviet Union in 1991 did not go down well with Russia, and it initiated ambitious investment programmes at locations at the northernmost tip of the Baltic, at ports such as St Petersburg, Primorsk and Vysotsk. Tucked away and ice bound for good chunks of the year they may be, but they offer direct access to northwest Europe, and that is what matters. Although vessel journeys to these ports from the Danish Straits add two days or so in comparison with the southern Baltic, they are big, wellconnected to land infrastructure and are, in the main, deepwater. Russia is therefore able to take advantage of lucrative backwardation in the US market and build bigger cargoes for transatlantic sales, bypassing the rest of the Baltic altogether. To read this article in full you will need to subscribe to Tank Storage Magazine or buy the back-issue. Click here for further details

From saunas to storage

Key oil and petrochemical hubs in the region have prompted StocExpo to hold its newest show in Helsinki It is not as far north as Lapland, and since Christmas has just passed Santa Claus will not be making a guest appearance, but Helsinki, situated on FinlandÍs southern tip, will prove an exciting destination to celebrate StocExpo Russia and the BalticÍs maiden voyage on 26-27 February. The region holds a strong position as producer and transhipment centre of oil and petrochemicals, and is a key location for tank storage capacity. With hubs such as St Petersburg in Russia and Tallinn in Estonia close by, as well as FinlandÍs own substantial tank capacity, StocExpo Russia and the Baltic is poised to appeal to a regional and international audience. The two-day event, consisting of a dual language conference in English and Russian with technical sessions, will provide insights into the latest developments in regulatory processes, best practices and technological progression affecting the storage of petroleum products and petrochemicals. To read this article in full you will need to subscribe to Tank Storage Magazine or buy the back-issue. Click here for further details

Automation in the Baltics

The last 10 years have been an interesting period in the history of the Baltic region, with westernisation, together with the resurgence of Russia under Putin, bringing about big changes in the oil and gas industry. Increasing automation in the refineries, ports and distribution centres is one way of coping with these transformations The changing political situation in the Baltic region has disrupted supply chains developed during the Soviet era when oil from Russia was exported from Tallinn in Estonia, Butinge in Lithuania and Ventspils in Latvia. The latter two are connected to the Russian Druzhba pipeline, but Tallinn has always relied on rail delivery. The ports are still in business but supply from Russia to Ventspils in particular has been disrupted. Russia has made it clear that supply to its own new facility at Primorsk takes priority. Butinge has a better relationship with Russia, and was designed as both an import and export facility giving it a measure of security. In 2003 the storage capacity for crude oil was significantly increased. Lacking an ice-free oil port on its own territory following the Baltic StatesÍ independence, Russia began construction of a new port at Primorsk linked to the Baltic pipeline system. The first stage opened in December 2001 and it has expanded almost continuously since. By 2003 it was the BalticÍs busiest port. The Lukoil II terminal on Vysotsky island is the latest stage, coming on stream in September 2006. In July 2007 Lukoill II exported 1.2 million tonnes of oil products. Meanwhile on the northern side of the Baltic oil and gas companies in Sweden and Finland may not have seen such dramatic changes, but like all western companies they are keen to reduce their environmental impact, safeguard employeesÍ health and safety and manage costs. Upgrading work at the Statoil terminal in the Swedish port of Malmù is typical of the way companies are using technology to meet their obligations whilst keeping costs firmly under control. To read this article in full you will need to subscribe to Tank Storage Magazine or buy the back-issue. Click here for further details

Seal of Approval

By choosing the optimum floating roof tank seal, terminal operators can achieve maximum performance with minimal disruption Design and selection of floating roof seals is a process that requires thorough knowledge of the tank configuration and the properties of the product being stored. It also requires an understanding of local regulatory criteria to avoid re-work and possible penalties from regulatory agencies for non-compliance. The tank operator should have key information required by the seal designers and suppliers to help satisfy these requirements. For existing tanks, where seals are being revamped, it is helpful to have a verticality and out-of-roundness study of the tank completed to determine the shell configuration. This can change somewhat when the tank is actually in service, but most reputable seal suppliers account for these changes during seal design. It is important that the seal be designed for the proper rim space, allowing for lateral movement of the floating roof and also to ensure that gap criteria are kept when traveling vertically over shell irregularities. For newly constructed tanks, the roundness of the tank is usually less of a problem. However, it is important to confirm that the new tank is built in accordance with the dimensional tolerances prescribed by API 650 or similar international standards. To read this article in full you will need to subscribe to Tank Storage Magazine or buy the back-issue. Click here for further details

The second Line of Defence

Petrochemical storage facilities are conscious to select the best secondary containment systems, and with growing attention to the environment there is no shortage of companies to supply them The environment is at the top of everyoneÍs agenda. Oil and related products can be a threat to the natural world when they leak, causing major environmental consequences that kill wildlife, pollute water and spoil agricultural land. It takes both great expense and time to clean up a spill, so a second layer of protection is required as a safety net. The first layer of protection present at a terminal is known as primary containment, and includes the tanks, pipes and vessels that hold liquids and the devices fitted to them to allow them to be safely operated. Secondary containment consists of enclosed areas known as bunds or berms, composed of concrete or earth walls, present to hold in any escaped liquids and any water or chemicals used in fire-fighting. Tertiary containment includes drains designed to limit the passage of petrochemical products offsite, and raised kerbs to prevent liquids that have breached the bunds and general area around the site. Major overfills and leaks have tested secondary containment in the last few decades, including a leak of 265 tonnes of petroleum from a Texaco tank terminal in New Jersey, US, after a tank was overfilled in January 1983. Another recent issue arose from the Buncefield petrochemical depot explosion in December 2005 in the UK. During the explosion, primary containment tanks and containers were ruptured and cracks appeared within and under bund walls. Fire water and product escaped due to damaged sealant and corner joints which opened up. With such a lot at stake, both financially and environmentally, secondary containment is closely monitored. ïAsset owner operators have to comply with current UK legislation requiring them to demonstrate secondary containment protection is in place,Í comments David Rice, UK strategic industry manager for oil and gas at Belzona protective coatings company. Legislation of secondary containment is becoming stricter throughout the world, as a result of greater publicity and environmental awareness. As an example of this, New YorkÍs Department of Environmental Conservation (DEC) is pushing to ensure terminal operators, storage and oil companies are compliant. ïThe DEC has increased its workforce and is starting to do more visual inspections of secondary containment in petrochemical storage terminals,Í Ted Hobin Jnr, VP of US industrial maintenance company Maple Grove Enterprises, says. A significant amount of work is also being undertaken to ensure terminals adhere to American Petroleum Institute (API) Standard 653: tank inspection, repair, alteration and reconstruction. API produces standards, recommended practices, specifications, codes and technical publications, reports and studies that cover each segment of the industry. The API standards programme has gone global, through active involvement with the International Organisation for Standardisation (ISO) and other international bodies. To read this article in full you will need to subscribe to Tank Storage Magazine or buy the back-issue. Click here for further details

Safety at the loading bay

Each day throughout the world, thousands of operations to load and off-load petroleum products take place on road tankers, rail tank cars, and marine vessels. That so few accidents are currently reported is a tribute to regulation, training, and equipment engineering Loading and unloading product into tankers is an inherently risky event, which involves connecting a fixed system to a flexibly located, and, sometimes, moving transport vessel. Accidents can occur at any point throughout the loading sequence; but in particular while entering the loading facilities, and moving the loading equipment to connect it to the tanker. Typical of the incidents reported is that of a 37 year old male plant operator who was fatally injured several years ago at a Massachusetts oil supply terminal when he fell nine feet from the top of a home heating fuel truck. The victim and the fuel truck driver had climbed on top of the truck to purge air from a load arm assembly line before filling the truck with fuel. Another was that of a loading arm that was uncoupled while product was being offloaded from the USflagged tanker Overseas Boston, in Ferndale, Washington. Up to 20 barrels of oil reached the sea after the marine loading arm failed to remain locked on the shipÍs manifold flange, although why it detached is unknown. The enquiry recommended that appropriate marine terminal procedures are modified to reference the use of the new positive hydraulic shut-off valves and E-clips located on the couplers. Regulatory organisations such as the UKÍs Health and Safety Executive (HSE) have been carrying out enforcement initiatives to reduce the risk of people falling from the top of road tankers. While not proposing a single solution, the HSE welcomes the move towards bottom loading. In Australia, a survey revealed that in 96% of workrelated falls, the victims had not been using any form of personal fall protection at the time of the incident. In 2004, the Standfast Corporation undertook a study into the use of the TRAM (total restraint access module) being used in the State of Victoria. The TRAM is designed to provide a safe means of access from a ladder, and working on top of a tanker, and is designed so that the user is firmly attached to the unit at all times and cannot fall to the8 ground. The safety system includes a handrail that slides along a horizontal bar fixed to the tanker, and a harness worn by the operator that is attached by two belts to the handrail. The handrail provides a support and constraint that moves vertically and horizontally with the operator. The report concluded that the TRAM complied with the StateÍs safety and occupational health regulations, and that it was a suitable and effective measure to prevent falls from road tankers. To read this article in full you will need to subscribe to Tank Storage Magazine or buy the back-issue. Click here for further details

Vapour recovery and emissions control

Increasingly strict environmental controls worldwide are driving the requirement for vapour control of hydrocarbons during storage. A wide variety of options are available with advantages and disadvantages which have to be weighed up on a site-by-site basis Significant health and safety problems can arise from emissions of volatile organic compounds (VOCs) while loading or unloading tankers, barges or handling vapours within a storage tank. Strong legislation, such as the Clean Air Act in the US and the Integrated Pollution Prevention and Control (IPPC) directive, which came into force in the EU in October 2007, is driving the installation of vapour recovery units. The EU Directive 94/63/EC has specified vapour recovery rather than destruction in all truck, rail and barge loading operations since 1994. Recently, the German TA-Luft regulation reduced the vapour recovery target from 150mg/m3 emitted to a very challenging 50mg/m3. The Dutch environmental authorities are following suit, but may be a little less stringent on the petroleum vapour emission level set. The US has legislated for vapour emission control since the late 1970s, but regulations vary from state to state, and use of combustion is widespread. The US Environmental Protection Agency (EPA) specifies 10mg/m3 of product loaded, but many states ask lower values. The states of New Jersey and California have very stringent regulations, and are currently considering specifying vapour control for all floating roof tank installations, in addition to existing rules for fixed roofs. VOC emission regulations also vary from country to country, to ensure that hydrocarbon vapours are contained in the storage device, incorporated into a vapour control device or destroyed. Richard Nichols of California-based vapour recovery system supplier R.A. Nichols Engineering makes the point: ïIn the US, if your vapour recovery system goes down, the terminal must shut down. Fines are becoming so onerous that thereÍs no real payback on investment. So many terminal operators are going for vapour combustors, both standalone and online, rather than risk large fines. In the Midwest, many companies donÍt even bother with vapour recovery, but California is very concerned because of the smog problem.Í To read this article in full you will need to subscribe to Tank Storage Magazine or buy the back-issue. Click here for further details

Back to Basics

When it comes to maintaining product homogeneity, sometimes the simpler the mixing system is, the better Keeping a tank in service as much as possible is at the top of the priority list. Mixing and blending requirements vary widely from product to product but, sometimes, simpler solutions can be as effective as the fanciest mechanical engineering. The less there is to go wrong, the less will go wrong. Applications like jet mixing or bubble mixing might still be niche but, typically involving no in-tank moving parts, they have a whole range of benefits. Most notably they are relatively simple compared with the conventional side- or topentry arm and impeller arrangements used for many applications in process industries. The old adage time is money rings ever more true, as operators strive for greater competitiveness and commercial success. No one wants to drain a tank due to a loose bolt or valve, let alone spend thousands on extensive cleaning of sludge from the bottom of a tank containing product that should have been kept moving. Jet mixing certainly has its limitations; it is usually better suited to, and more cost-effective in, larger tanks such as those designed to store crude, for example. But for tank owners looking to all but shelve those maintenance logs, reduce the need for man entry, and drastically reduce the need for spare parts, jet mixing or bubble mixing may be the answer. According to Aidan Cumiskey, MD of Monsal Mixing, based in Mansfield, UK, and a major player in the wastewater and sludge management sector, concerns over health and safety led to a switch from conventional arm and impeller arrangements to jet or air mixing several years ago ¿ in MonsalÍs case using re-circulation. Cumiskey says the sector has seen a vast reduction in mechanical breakdowns as a result, pointing out that markets such as biomass could find jet and air mixing beneficial in comparison with conventional mixer arms. ïThere was a lot of mechanisation in the wastewater sector until a few years ago, when concerns over access and maintenance led people to move over to non-moving parts and with all equipment outside the tank,Í Cumiskey says. ïThis led us to develop jet mixing for use in the tanks and this has now become a trend in the industry.Í Cumiskey says the company is particularly interested in exploring applications for jet and air mixing in the growing biofuels sector, not least because of the similarities in the make-up and organic nature of biomass, biogas and wastewater. He cites ragging, whereby materials from fibrous liquids such as those commonly handled in the wastewater sector, were becoming snagged in impellers and leading to mixer malfunction and tank breakdown. Jet mixing helps to minimise this, due to the lack of a need for equipment such as impeller paddles and the use of large nozzles that deter blockage. Jet mixing systems, including those supplied by Monsal, commonly use low energy gas compressors and boast quick blend times, between 90 minutes to two hours in MonsalÍs case. Larger tanks require more points of influence but the blend time is maintained, Cumiskey says. Points of influence can also be added to the tank walls as well as to the tank bottom to take account of liquid height and still maintain blend rate. The larger the tank, the more likely it is that it contains shipments from several vessels, and mixing to avoid separation and sludge settlement at the bottom is crucial when it comes to integrating different density batches. Having to drain down any tank because of mechanical failure inside is highly undesirable for any tank operator. The bigger the tank the greater the disruption, so the nonintrusive nature of methods such as jet mixing is key. GermanyÍs GEA Wiegand, headquartered in Ettlingen just south of Frankfurt, provided such a system to a northwest European client looking for a non-intrusive mixing application for a very large (80,000m3) crude tank (80 metres in diameter and 20 metres high). The customer had previously used conventional shaft-driven mixer arms but found them to be lacking in the blend times achieved, and rejected air mixing due to concerns over contamination. The customer was not expecting to open the tank for 10-15 years following installation so a maintenance free system was vital. To read this article in full you will need to subscribe to Tank Storage Magazine or buy the back-issue. Click here for further details

Seals for tank roofs

Emissions from tank roofs that do not have proper seals can constitute a significant portion of total emissions from aboveground storage tanks (ASTs). Wind and other associated factors can increase volatile organic compound (VOC) emissions, particularly from roof fittings that are not properly sealed. There is a variety of methods for sealing the roofs of ASTs. The roof systems must be able to meet operational needs efficiently while also addressing safety and, increasingly, environmental regulations for the storage of petroleum and other chemicals. They have to be able to keep odours and emissions in, and also rain, wind and airborne (or other) contaminants out. Roof seals, therefore, play a very important part in the success of meeting these objectives. The type of seal depends on the type of roof that the AST has. The choice of material for a tank roof seal is also important as it has to withstand the stored product, exposure to the sun and rainwater contact. Seals can be manufactured in a wide variety of materials, including different grades of aluminium, galvanised steel, stainless steel and polymer materials. API 650 is the accepted standard in the US and is also widely acknowledged throughout the tank storage industry, although some countries have specific national codes and standards for the design and construction of covered storage tanks. It establishes minimum requirements for material, design, fabrication, erection and testing for vertical, cylindrical, aboveground, closed- and open-top welded carbon or stainless steel storage tanks in various sizes and capacities. The standard applies only to tanks whose entire bottom is uniformly supported and to tanks in non-refrigerated service that have a maximum design temperature of 93ÁC or less. API 650 was updated in June 2007 and is now in its 11th edition. US regulations To read this article in full you will need to subscribe to Tank Storage Magazine or buy the back-issue. Click here for further details