Tank Storage Magazine v06 i02


Volume: 6
Issue: 2
Date Published: March 19, 2010



StocExpo sell out

For a business that works with chemicals, oil products and renewable fuels, a drop in fuel demand, a downturn in the chemical and refining sector and a stagnant biofuels market may have proved disastrous. But the industry is still going strong and it’s proving to be a great time to be in the storage business. Demand for space is continuing to grow, as are the key players which are expanding across the globe. Added to this the market’s contango has incentivised traders to store oil products for later resale, so occupancy rates are at some of the highest the industry has ever seen, especially in the central locations including the ARA region and Singapore. Although the outlook looks good now, no one can predict what is around the corner. A second and prolonged dip in demand is still possible, which could lead to a tightening of trade barriers – a concern which is causing some terminals to remain cautious.

An end to Buncefield?

The explosion and fire at the Buncefield oil storage terminal on 11 December 2005 was thoroughly investigated by a Major Incident Investigation Board (MIIB) chaired by Lord Newton of Braintree. The MIIB published a total of eight reports which dealt with all aspects of the incident. Industry and regulators took joint responsibility for addressing the recommendations set out in the MIIB report dealing with Recommendations on the design and operation of fuel storage sites (MIIB D&O report). As prompt action was required this joint work started before the MIIB report was completed under the auspices of the Buncefield Standards Task Group (BSTG). Following the publication of the MIIB D&O report the Process Safety Leadership Group (PSLG) was established to continue the effective cooperation between industry, trade unions and the Control of Major Hazards (COMAH) Competent Authority (CA) so that they could jointly develop, progress and implement recommendations and practices that would improve safety at COMAH sites storing fuels. The PSLG steering group, chaired by a senior member of industry, comprised representatives from the United Kingdom Petroleum Industry Association (UKPIA), the Tank Storage Association, the United Kingdom Onshore Pipeline Operators’ Association, the Chemical Industries Association, the Trades Union Congress, the Health and Safety Executive, The Environment Agency and the Scottish Environment Protection Agency.

Are we dying for new legislation?

Flixborough, Bhopal, Piper Alpha, Toulouse and Texas City – all are well-known to those on major accident hazard sites within the chemical industry. Each one resulted in fatalities and injuries, environmental damage and destruction to buildings and the businesses involved. Undoubtedly, the lives of those connected with the incidents will also have been changed forever. The incidents were deemed so catastrophic that they helped to change the behaviour of organisations around the world and influenced the formation and enforcement of new legislation designed specifically to prevent similar situations ever happening again. By way of example, 28 deaths at the Nypro (UK) site at Flixborough caused by the leakage of cyclohexane vapour and the subsequent explosion in June 1974, and the explosion at the ICSEMA chemical plant in Seveso in 1976 led to the Seveso and Seveso II Directives in Europe, which are regulated under the COMAH Regulations in the UK. This regulatory regime has had a profound impact on the way we now look at design, construction, operation and maintenance at high hazard sites. But even though the regulations are periodically reviewed and amended in an attempt to further improve process safety, and the learning is shared freely around the world, major accidents still occur.

No R&R for ARA

Demand for chemicals and petrol may still be down, but the storage industry is standing strong. Key players are adapting to market conditions by expanding in strategic locations, using swing tanks and implementing risk prevention measures. Many consider storage terminals to be a recession-proof business. Certainly the key players are announcing impressive profits and big expansion plans but the industry still needs to adapt to its surroundings. Faced with a declining chemical market operators must convert tanks to handle alternative products, and in order to tackle a saturated market they must choose new locations wisely. Outside of the key Antwerp-Rotterdam- Amsterdam (ARA) chain, deep water ports and those with access to large markets are doing particularly well. Much like the recent phenomenon in the airline industry where new companies such as Ryanair and EasyJet focus more on smaller planes with regular flights and a quick turnaround, Nedstore Terminals saw an opportunity for a major shift from the mammoth bricks and mortar of the ARA region. The new independent privately held company – which appeared at the back end of 2009 – looked at ARA and Hamburg and other main ports and saw no greenfield areas available in those harbours, only a few expansion opportunities for existing terminals. The ports are dominated by big players such as Vopak and Oiltanking, and there is also lots of traffic congestion adding costs to the business. Further to this these ports have sensitive environmental restrictions making it difficult to get environmental permits in Antwerp or Rotterdam, for instance, which are packed already.

Vesta: a new name in oil storage

One of the world’s largest energy traders Mercuria takes its name from Mercury, the god of trade. So when it came to renaming some of the company’s assets Vesta was the logical choice – the goddess of home and family. The name Vesta, introduced in March, covers all of Mercuria’s storage and processing facilities. ‘The temples to Mercuria were in the key market centres, just like our terminals!’ explains Anton Klomp, who is in charge of the Vesta team. Mercuria is part of a growing trend in which traders are buying into storage and other infrastructure. The ownership of oil storage and processing gives greater substance and stability to a trading company’s operations, as well as providing valuable and less volatile income streams. The company owns assets in midstream oil and biofuels and has also invested, as a minority participant, in a number of other activities ranging from crude oil production in Argentina and Canada, to oil storage in China and bioenergy in Brazil.

Tank terminal update Europe

Tank Storage magazine takes a look at recent terminal or tank farm construction, acquisition or expansion projects in mainland Europe.

Flying a little further

Some equipment suppliers are feeling the squeeze in today’s economy. Is aircraft refuelling a target market worth exploring? Global airport investment is around $50 billion (€36.8 billion) a year of which an estimated $1 billion is spent on airport fuel systems. There are three main centres of aviation traffic – US, Europe and east Asia, but opportunities exist wherever there is air travel. Aviation fuel is not chemically very different to automotive fuel, but the way it is handled is much more carefully controlled. The way the business is organised is rather different too. In the past a large airport fuel system would usually be installed by one of the major oil companies. As the airport developed, the fuel facilities would be upgraded to keep up with demand. Competitors would be attracted by the growing business leading to massive duplication of facilities. Faced with this situation the oil companies have developed joint ventures and reciprocal fuelling arrangements enabling fuel to be pooled and dispensing arrangements shared at each airport.

Safety first for LNG storage

Liquefied natural gas (LNG) is an extremely cold, odourless, nontoxic, non-corrosive substance that is transported and stored at low pressure. As long as it is contained within appropriate tanks and piping it poses very little danger to anyone. No incident has been directly related to LNG tank failure since the fi rst export plant was commissioned in 1965. The one and only case of an LNG accident that affected the public was in Cleveland, Ohio, in 1944. As a result of a tank failure 128 people died in an explosion at the East Ohio Natural Gas Company. The steel tank proved brittle when exposed to cold due to a low amount of nickel content in the tank (due to WW2 rationing) and it also lacked a dike. Nowadays industry standards ensure a certain level of safety protection. Three different tank designs are available for LNG – single, double and full containment tanks.

Fire hazard management training

One of the biggest challenges facing HSE personnel, fire safety managers and emergency responders at terminals is the implementation of a relevant, justified and cost-effective fire and explosion hazard management (FEHM) policy. Whatever the size of facility and operating environment, adopting an integrated approach to managing fire risk and developing effective pre-fire plans is vital. This integrated approach requires detailed consideration regarding the levels of fire prevention, incident detection, fire protection and fire response capability to produce a workable site-specific policy.

Reaching new heights

Building a tank on an island brings with it some unusual challenges including strict custom regulations. Undertaking storage tank repair and maintenance work in the South Atlantic could be perceived as high risk by some UK companies, but not all. UK-based Redhall Engineering found that it was not the scope of work that provided the biggest headache, but the sheer amount of pre-planning and organisation required to overcome the logistical, staff welfare and climate issues that working on a remote tropical island location inevitably brings. The contract, which was awarded by a long standing client that operates in the South Atlantic, was to carry out the overhaul of three tanks sited within the Bulk Fuel Installation (BFI) at the Wideawake Airfield on Ascension Island.

The new way to build tanks

Traditionally large storage tanks are always fully assembled on site. But by building prefab parts of the floating roof elsewhere the project turnaround time, as well as the associated costs, can be significantly reduced. In April last year Netherlands-based contractor Mercon suggested this approach for the rebuild of BP’s tank #77 at its refinery in Rotterdam. Mercon, which maintains all 117 tanks at BP’s Europoort site, started with the breakdown of this diameter 53.3m, height 16.5m tank which is used for storing light distillate fraction (LDF).

Preparing for the influx of renewable fuels

Legislation affecting renewable fuels is still being updated so terminals and blending facilities must ensure they are aware of the latest regulations affecting the products they handle. The operator should evaluate and establish the following plans. Firstly they need to have a plan for one or more supply options for ethanol and biodiesel. The predominant design is for single delivery method via tanker truck, but each situation is different so the terminal needs to be prepared.

MID – fuelling accurate blending

Addressing the impact of the European Measuring Instruments Directive on biofuels blending.

Floor inspection without the added costs

Tank bottoms are notoriously hard to inspect. A new method removes the need for downtime at the same time as providing repair and maintenance guidelines for tanks.

Insuring against tank downtime

An effective tank management programme is necessary to ensure that tanks continue to operate safely and are inspected and maintained on a regular basis in the most costeffective manner possible. A mixing programme should complement this to minimise deposits that can decrease capacity, cause corrosion and increase inspection costs. Higher deposit levels also leads to an increased risk to personnel exposed to hazardous tank cleaning.

The role of alarm annunciators in managing safety

Alarm annunciators are a vital tool in safety management but operator involvement places a limit on the technology’s reliability