Tank Storage Magazine v06 i03


Volume: 6
Issue: 3
Date Published: May 12, 2010



Is offshore storage driving prices up?

Last year the use of temporary floating tanks for storage became so popular that even investment banks began chartering ships. Estimates for the number of ocean-going vessels used for storing distillates vary among shipping analysts and brokers, but the total figure, including brand new VLCCs, Suezmax, Aframax and Large-Range clean tankers, soared to well over 100 at the peak of the end of last year. But now regulators are investigating whether taking capacity off the market is a good response to a surplus, or whether players are holding supplies in order to inflate prices. One justification of floating storage is that it’s the result of the market efficiently creating an incentive to stockpile oil supply for a time of high demand; with 41 million barrels of oil at sea, there shouldn’t be any supply crunch even if demand rises steeply.

A change in direction

Vopak bought a second terminal in Wilmington, North Carolina, 18 months ago and is looking to develop it into a clean fuels distribution point on the East Coast in conjunction with the site’s existing chemical business. The location of the terminal is strategically placed for the handling of large volume petrochemicals imported from new world-scale plants and with it, Vopak can establish a shared infrastructure system similar to those it developed in other parts of the Vopak world. The terminal in Wilmington, North Carolina, currently has six tanks which can be modified to support the storage of petrol, other clean fuels and biofuels.

Ever expanding possibilities

As the financial storm subsides it is time for an evaluation. The storage terminal operator looks at his carbon and stainless steel tanks and sees the structure intact and is happy the orange-brown sprawl of rust has not settled in just yet. He taps the tank and hears a dull thud resonate back to him. It is a satisfying sound – the tanks are full. He thanks the contango which means traders are storing product for longer. He knows however that they are looking hungrily for space to store more. He calls his chief financier and is pleased to hear that higher renewal rates mean revenue is up. Shortly after he recalls with elation that the terminal’s new revolver loan has just been finalised. Now he has capital to fuel opportunity. Where space is available he goes into expansion mode, or looks for an acquisition, and if the opportunity permits he looks to construct from scratch. Across the US over the past year new tankage has sprouted at a time when growth in other industrial markets seems doomed. Terminal majors including Arc Terminals, Kinder Morgan, Global Partners and Buckeye are busying buying up assets while players such as Blackwater Midstream, NuStar Energy and Westway Terminals are acquiring, expanding and in some cases constructing from new.

Complying with ISO/IEC 17025

ISO/IEC 17025 provides accreditation for the procedures carried out by laboratories, ensuring consumers that the products are safe. It assures customers that a lab is technically competent and is able to generate technically valid results. ISO/IEC 17025 details all of the necessary requirements for testing and calibration laboratories must follow to gain customer confidence. A competent management system is key, which is where ISO 9001 comes into effect. The two standards are compatible but not interchangeable. ISO 9001 applies generic management standards, while ISO 17025 involves more laboratory specific management details.

Safeguarding commercial interests

Commodities such as crude oil, distillate fuels and petrochemicals are subject to sensitive commercial transactions with price being determined on quantity and quality. Such demanding trading environments require swift resolution to any disputes and only by engaging in inspection, sampling and testing services, can suppliers and receivers be assured of product integrity. Product quality issues can also occur due to physical storage conditions and shore tank inspection services help to identify problems at this stage. By employing suitable sampling techniques, inspectors ensure representative samples are taken, ready to be analysed against product specifications.

Quality control

FAME and biodiesel are transported, sampled and measured in a similar way to petroleum diesel fuels. However as specifications for FAME have limits on alkali and alkali earth metals, sea water washing is not allowed. Shiptanks are rinsed with extensive fresh water to avoid sodium contamination. High concentrations of water in FAME can lead to bacterial contamination issues, the formation of fatty acids and stability problems. Therefore it is essential that shiptanks and shoretanks are fully free from water. Ship tanks must be dried after each water cleaning and where dehumified air is available this may used for drying. The inspector should verify the above during his ship inspection.

Securing the tanks

With a total capacity of almost 27,000 m3 of hazardous liquid storage space, Terminals Pty (Terminals) is Australia’s largest independent bulk liquid terminalling company. Terminals, located on Coode Island, one of Victoria’s major bulk liquid storage facilities, receives liquid products by pipeline from ships and stores them in the approximately 70 tanks throughout the premises. Supplying over 400,000 tonnes of hazardous and non-hazardous chemicals yearly means that Terminals wants to always ensure the most effective security solutions are used. As a well-established and highly respected hazardous chemical storage and distribution facility, Terminals took on the challenge to ensure the highest level of security was maintained for the safety of all employees and nearby residents. The bulk chemical storage company insisted on having the premises manned with security personnel 24 hours a day and hired security staff to stand guard on the facility grounds and to monitor the alarms which were automated in case of fire, intrusion, plant or process malfunctions by local systems. In the event that an alarm did go off, security guards would react as required, alerting Terminals management who would take the appropriate action. Although it ensured that action would be taken immediately, this vague and old fashioned process was costly since guards were being paid around the clock; not to mention it also opened the door to one inevitable possibility: human error.

Corrosion in storage facilities

Wherever fuel is stored or distributed there is a risk of corrosion. Traces of water are often a contributing factor and moisture readily gets picked up by fuel during processing and storage. Certain characteristics in bioethanol make this environment even more susceptible to corrosion, which has led to failures of structures and leaks in pipe work in previous incidents. Fuel ethanol Fuel ethanol is hygroscopic so it has the ability to attract water molecules from the surrounding environment. Data shows a radical increase in water content of ethanol after 30 days exposure to a humid environment. In specific relation to fuel ethanol, increased water content and decreased pH have shown to be contributing factors to increasing corrosivity.

API 650 Appendix H revision

In November last year Addendum 2 was issued for the 11th edition of API Appendix H. This added standards for cable suspension systems for aluminium internal floating roofs (AIFRs). API 650 Appendix H Standards are developed from within the Committee on Refinery Equipment (CRE) composed of the subcommittee on aboveground storage tanks, currently chaired by Alan Geis of Colonial Pipeline Company and vice chair Larry Foster of Marathon. Within the subcommittee there are two sub-groups: Design and Fabrication. The Fabrication group works on API 653. The revisions for API 650 H emerge from the Design sub-group composed of approximately 50 experts chaired by Marilyn Shores of Explorer Pipeline.

Better safe than sorry

Rim fires in aboveground storage tanks (ASTs) occur every year, frequently caused by lightning strikes. Whereas some of these will be extinguished before they cause major damage a certain number will spread and cause catastrophic destruction. Flammable vapours mixed in certain concentrations with oxygen create the potential for explosion when presented with an ignition source. One of the least understood ignition sources is lightning. The waveform of lightning has three main components: a fast high current initial pulse with up to 200kA of current for less than 500 microseconds, a long continuing current with amplitude in the 200 to 800A range, and a short (less than 5 microseconds) intermediate portion transitioning between the two. When lightning strikes a storage tank or the ground near a tank, the lightning current will flow in all directions across the surface of the steel. For fixed roof tanks a ‘Faraday Cage’ effect takes place, wherein the current primarily flows along the outside of the steel tank. There is a possibility that with the presence of flammable vapours at the atmospheric vents, these vapours can be ignited. Typical protection for a fixed roof tank against this possibility is to use properly maintained floating roofs and tight fitting seals as well as the careful planning of filling operations around the local weather. External floating roof (EFR) storage tanks present an entirely different challenge for lightning protection. An external floating roof tank has no other path for the lightning current to flow besides the metallic floating roof. Therefore the lightning current will travel not only down the outside of the steel shell, but also down both the inside of the shell, through the seal, across the roof, through the seal on the other side of the roof and up and over the other side of the exposed shell.

Responding to new lightning protection recommendations

When lightning struck on or near a petroleum tank at the Magellan Midstream Partners distribution terminal in Kansas City, Kansas, in 2008 the tank, containing approximately 1.2 million gallons of unleaded petrol, caught fire, sending a large plume of smoke across portions of the greater Kansas City metro area. About one-third of all petroleum tank fires are due to lightning strikes. Floating roof tanks (FRTs), like the one that caught fire due to lightning in Kansas City, can be especially vulnerable. The costs can be catastrophic: from loss of product, equipment, and production; to loss of life, business, and goodwill; to lawsuits and increased regulatory scrutiny. In fast developing, lightning-prone areas such as Florida, China, Malaysia, and Singapore, the risks are highest. To reduce the risk of tank fires, the American Petroleum Institute (API) issued API RP 545, Recommended Practice for Lightning Protection of Above Ground Storage Tanks for Flammable or Combustible Liquids at the end of last year. There are some new options to make satisfying API RP 545 fast, economical, and safe. Forward thinking, proactive companies in the petroleum industry are heeding the RP, which is expected to become a standard in the near future. Those who do not can only hope that lightning doesn’t strike once, let alone twice. Key findings Two key findings resulted from the API technical committee’s research and testing. First, when lightning current passes through shunts at the roof-shell interface, it will result in arcing under all conditions. Second, it is the slow component of the lightning stroke which ignites flammable vapours. Therefore, when the slow component of a lightning stroke passes through any existing roofshell interface, if flammable vapours are present, they will likely be ignited.

Sensor technology for floating roof tanks

Innovative technology now makes it possible to equip floating roofs with their own eyes and ears so they can sense when conditions are not right, when vital components such as seals are not performing satisfactorily, or when it is in danger of sinking. The equipment can also detect rising lower explosion levels (LEL) resulting from an overfill originating from its neighbour, and can call for help on its own. Floating roof related failures in petroleum aboveground storage tanks (ASTs) can cause catastrophic industrial accidents with significant consequences to the tank operator and the environment. Every year 30 to 40 significant incidents around the world cause dangerous hydrocarbon fires and chemical spills into the atmosphere, water, and soil. The financial damages to the industry from AST accidents are significant and can exceed several billion dollars in cases involving loss of life or largescale property damage. As the population of floating roof tanks throughout the world ages, the risk of sinking or other failure increases despite advances in roof structural design, evolved operational protocols, and improved maintenance practices. Moreover, the accelerating exodus of skilled workforce through retirement brings additional challenges to the operation and maintenance of the petroleum storage infrastructure. To complicate the situation, a new wave of legislation triggered by recent major accidents at petrochemical storage facilities will likely enforce tougher safety and environmental protection standards at the tank farm and may even open the door for criminal prosecution of operators when significant accidents occur. These new realities make it vital for the petroleum industry to seek novel methods for prevention of future tank accidents.

StocExpo attracts over 3000 attendees

The three-day conference and exhibition, now in its sixth year, was held in Antwerp and was opened by Danny Deckers, senior advisor MPC for the Antwerp Port Authority. Antwerp port is traditionally thought of as a chemical hub so unsurprisingly has suffered from a drop in chemical throughput, Deckers explained. However the growth in oil markets has compensated for this and the port remains one of the most diverse in the world. Within the port 14 terminals are operated by 11 companies. It boasts the most stainless steel tanks in the world and is constantly evolving – nine terminals underwent or are undergoing a major expansion or upgrading since 2005. One of the key projects in the port is now working on is the deepening of the river Scheldt. This project started in February and is expected to take 12 months, although Deckers hopes it may be fi nished by the end of the year. Before deepening the port could only handle vessels with a draught of 11.9m – afterwards it will be able to accommodate up to 13.1m. Another key focus for the port, Deckers explained, is the ongoing investments into transportation links to avoid future congestion. The rest of the day featured presentations on revamping marine oil terminals, the changes in international oil product fl ows, security of oil supply and many more.