Tank Storage Magazine v07 i01


Volume: 7
Issue: 1
Date Published: January 27, 2011



Expanding eastwards

Poland was ranked as one of the top 10 fastest growing oil storage markets earlier this year,1 yet there is still only one privately owned tank farm in the country. This is TanQuid Polska’s facility in Radzionków in southern Poland, which manages approximately 7% of the consumption of mineral oil products in the country, including petrol, diesel and biofuels. ‘The demand for fuel is increasing by about 5-7% a year,’ says the terminal’s managing director Marek Stoń. ‘This is mainly due to the high population and the rising number of cars.’ Up until the economic crisis the Polish market had seen a steady growth of 2.7% a year. During early 2010 the market stagnated a little but this may have been the result of weather conditions. ‘In the last few months we have seen a very rapid recovery,’ explains Lutz Szibor, CEO of TanQuid.

All doom and gloom?

Economic gloom has been widespread for the last couple of years, and Price Waterhouse Cooper’s (PWC) report Hard Landing 2, published in September 2010, makes it clear that all countries in central and eastern Europe (CEE) face financial problems. Difficulties in obtaining credit have a serious effect on operations, and make capital investment in pipelines and terminals diffi cult, but sometimes a perceived problem is also an opportunity. PWC’s assessment of Russia lists its strengths: good growth prospects; accumulated reserves from the pre-crisis period; moderate foreign debt and low public debt, and its weaknesses: structural weaknesses in the banking system and excessive dependence on exports of energy resources. In other words Russia is ripe for external investment (since its own banks are not up to the job) and needs to export oil and gas. Consequently, we see Russian energy companies jostling for alliances, mergers, takeovers, stock swaps and other deals with companies in eastern Europe and beyond. Russia is the major energy producer in the region but has long relied on ports in the Baltic states to get its oil out to its customers. With the breakup of the soviet empire this has got a lot more complicated and disputes such as that between Belarus and Latvia over the LatRosTrans pipeline to Ventsplis rumble on. Russia has developed its own port at Primorsk and is actively seeking other export paths. It has in recent years developed a northern route via the Barents Sea and eastwards overland to China. In 2009 Russia passed Saudi Arabia as the biggest oil producer, the increase being due mainly to the Vankor fi eld coming online. Situated in east Siberia Vankor is connected to the Transneft network but most of the oil will be exported via the Eastern Siberia–Pacific Ocean pipeline.

Physical security considerations

Many CFATS regulated facilities manufacturing or storing chemicals in tank farms might be attractive to terrorists. Most of these facilities have submitted security vulnerability assessments (SVA), site security plans (SSP) or alternate security programmes (ASP) to the Department of Homeland Security and are awaiting notification of their final tier assignment. Regulated facilities must strive to achieve an approved SSPs which may not occur on the first submission. The physical security expectations for CFATS regulated facilities can be found in a document entitled the Risk-Based Performance Standards (RBPS) published in May 2009. It contains 18 standards that apply in whole or in part to regulated facilities dependent on the type of COI and associated risk of criminal or terrorist attack. In the guide, risk-based performance standards one through four cover the bulk of the physical security expectations that will result in the majority of expense for regulated facilities. Therefore, it is essential to take a disciplined engineering approach to implementing measures to detect and prevent attacks to avoid unnecessary cost or inadequate systems that would be rejected by Homeland Security. On some occasions, when an initial SSP submission is rejected, Homeland Security prescribes a Site Assistance Visit (SAV). When a SAV is ordered it usually means there are significant gaps in an SSP submission (e.g. complete sections of risk-based performance standards are omitted) and DHS believes they need on-site, face-to-face contact to resolve discrepancies. A SAV is intended to inform site owners and operators about security vulnerabilities and gaps as well as protective measures to increase preparedness for all hazards, including terrorist attacks. This can be timeconsuming and, in the case of a subpar SSP submission, is better avoided. It is one thing to ask for help, it is another to have it imposed on you. Homeland Security representatives will come onto your site, review your conditions, your site security plan and discuss potential options for closing gaps in your SSP submittal. This is guidance only and is not prescriptive. Representatives will not dictate solutions, nor make any representations that one measure or another will assure SSP approval.

Forward curves in oil futures markets

The shape of the forward curve drives demand for storage capacity to a great extent. Generally a so-called contango situation with large enough calendar spreads stimulates oil traders to store product whereas a backwardation results in an incentive to lower stocks. It is evident that in both cases revenues of storage companies are influenced significantly, however, in opposite directions. Because of the strong relationship between forward curves and the storage business, it is extremely important to monitor and anticipate the shape of forward curves. Decisions concerning investments in storage capacity and corporate risk management all explicitly or implicitly assume various scenarios with respect to oil futures term structure and dynamics. Nevertheless, few fully understand the mechanics that drive forward curves.

The terminal of the future

Tanks made of composite material partitioned into different compartments, extensive automation and sustainable energy generated locally which can be temporarily stored in the form of ammonia. These are just some of the ideas which may form the terminal of the future. Trends in energy consumption Based on the future predictions of players such as Shell, the use of energy will have doubled by 2050 due to the growing prosperity of newly industrialised countries in the world. The contribution of oil to energy supply will gradually drop after 2020, whereas the contribution of gas will stay about the same, as will that of nuclear power plants. The requisite additional energy will come from coal, biomass and natural sources, such as the sun, wind and water. This will lead to larger volumes of and greater differentiation in fossil and non-fossil raw materials, semi-finished products and fuels. There will also be a shift in the oil refinery sector: Europe will process less crude oil for export, import more finished oil products from elsewhere and therefore store less crude oil and more diverse oil products. A further factor in the equation is that countries in Europe will no longer keep a strategic supply of fuel for 90 days but for 120 days. This all translates into a sharp increase in demand for storage capacity.

Minimising spillage during connection

Recent high profile environmental incidents involving spillage of hazardous materials has highlighted the need for reliable couplings. Many companies are still using basic non-valved quick release coupling systems where the risk of spills on inadvertent coupling disconnection are high. Using a dry disconnect coupling system can minimise, or in the case of dry link, eliminate this risk entirely. Many companies have to resort to using spill kits to contain the results of a spillage problem. Why have this problem in the first place, putting the employees, clients and the environment at risk? Whilst dry disconnect coupling systems require a higher initial outlay, in the long term, maintained correctly they repay their cost, give the user added peace of mind and remove the cost of expensive cleanup operations.

Reliability in closure testing

Although no one can say with 100% certainty that a particular valve will seal completely under all circumstances, what is claimed by manufacturers is that a new valve seals under testing (seat and shell tests) completely at the factory. This statement, usually backed up by the test parameters of API or MSS or other body, gives most customers a level of comfort they accept as adequate. In most cases this is sufficient to meet the service conditions. However, in critical service where absolute and reliable complete shut off is required, there is an alternative that should be considered since simply passing factory seat and shell testing might not be telling the complete or accurate story. Most widely recognised test standards use a liquid as the test medium. Usually this is water or kerosene. This is a reasonable and prudent test medium since when pressure testing at 100% or 150% the cold working pressure (CWP) – shell and seat – could be dangerous with anything except for a liquid.

Solving a dilemma

Creating mobile loading equipment is not as easy as it may sound. Back in 2007 a company was looking for marine loading arms mounted on carts or mobile mezzanine structures to be deployed on a multiuse/ multi-cargo jetty. The driving force behind the mobility requirement was the absolute need for the entire jetty surface to be clear and available to other forms of cargo transfer when the company was not conducting operations. That meant all liquid loading and unloading equipment had to be mobilised and installed on the jetty for operations and demobilised and removed from the jetty during nonoperating periods. This made a traditional marine loading arm installation unworkable. However while the mobile concept was very workable, it had drawbacks from a cost, logistics and manpower perspective. In response to this dilemma, the Netherlands-based Kanon Loading Equipment came up with a suggestion – to use a loading arm with an extended reach, which could be permanently installed in a safe, secure area behind the jetty. This would be capable of reaching all the way across the existing jetty to the various ships and barge manifolds they expected to receive. This promted the design, fabrication and installation of the fi rst extendable each model MLA260 Marine Loading Arm.

Automisation revolutionises 3D planning

Planning is the most important factor in the safety of a tank farm. By using an advanced planning system approximately 70% of routine planning work can be automated. The focus can therefore be set on important safety issues, including target’s critical maintenance points. For example, when designing tank stairs an automated system can generate a 3D model, just by entering the tank’s height, diameter and insulation material. The time and effort saved can be directed towards safe landings or specifi c maintenance points. A system such as this can also take into account the required standards and safety issues. The system can control the whole production process and improve delivery reliability by minimising possible human errors, from planning to manufacture.

Botlek installs new equipment

In March this year the Netherlands-based Botlek Tank Terminal will install a new robust Carbis-designed marine gangway system at its latest terminal in Rotterdam. This is a dual sided system. Each gangway is hydraulically powered and has full remote control for all movement functions. Created by US based fall prevention solutions provider, Carbis, the gangways have the company’s marine tread system which allows safe, non-slip footing over a wide range of gangway operating angles. In general the European market has lagged behind the US when it comes to fall protection equipment. But by partnering with Loadtec Carbis is able to offer its complete range of equipment to European terminals. As an example, early last year Loadtec supplied a new road tanker access system to New Britain Oils. This comprised three tanker enclosure systems (TCEN4) at the company’s refinery in Liverpool, UK.

Controlling vapour loss from external floating roof tanks

The main reason for having a floating roof is to reduce evaporation losses. Having said that, the cost of supporting the covers for tanks exceeding 30 metres in diameter is not insignificant. If trussed supports are used the trusses will be very deep. If domed, the fabrication costs may be excessive, or if column supported, the foundation costs escalate. It might be expensive, but floating roofs reduce emissions by approximately 95%, compared with fixed roof alternatives. The design of floating roofs, both internal and external, are governed by design codes and conventions. Without doubt, the most widely recognised are API 650 and formerly BS 2654, now BSEN 14015.

Reducing risk

Proper installation of lightning protection for external floating roof tank systems is critical. The API 545 and NFPA 780-2011 provide authoritative and comprehensive detail on the protection standards for these structures. With the right tools and an understanding of the applicable standards, it is possible to administer a critical evaluation of the potential risks for any given facility. A successful risk assessment methodology maintains specific protocols for determining and mitigating the risk of damage due to lightning. Statistical modelling methods of the lightning attachment process demonstrate the approximate number of lightning strokes over a given period of time. Using electro-geometric data from integrated systems software, a three-dimensional representation of the facility can be modelled. Calculations can then be made that display all of the potential lightning attachment points. This data can then determine the degree of protection necessary for a given facility and whether the current systems are robust enough to help allay disaster. Measuring lightning’s charge and formation Lightning occurs during the forced separation of positive and negative charges within a cloud. Opposite ground charge Due to the process of convective charging and particle charging, the cloud gains a separation of net charge at the top and bottom. Generally, the top of the cloud has a positive charge, and the bottom has a negative. Negative cloud to ground discharges account for over 90% of all lightning strikes.

Safeguarding assets and reputation

Whilst it is about fi ve years since the explosion at Buncefi eld fuel storage depot physically shook Hemel Hempstead and metaphorically shook the petrochemical industry, the incident was back in the media about six months ago following the fi ning of those companies considered responsible. The penalties imposed against some are considered to be amongst the highest to date in relation to safety offences in the UK. Even so, there was considerable public outcry that the fi nes were too lenient, which created a second wave of bad PR against the companies (and individuals) that were named and shamed. The explosion in 2005 of course led to an investigation, conducted by the speciallyformed Buncefi eld Major Incident Investigation Board (MIIB). Then, in September 2008, the UK Petroleum Industry Association (UKPIA) and Tank Storage Association (TSA) announced that their members had committed to the standards of BS EN 61508 Safety Integrity Levels (SILs) plus the installation of automatic shutdown systems to prevent the overfi lling of storage tanks (that receive fuels via pipeline transfer).

Extending inspection intervals

A release prevention barrier (RPB) is installed in or under an aboveground storage tank and is impervious to the liquid being stored. Its purpose is to divert leaks toward the perimeter of the tank where they can be easily detected as well as to prevent liquid from contaminating the environment. The use of loosefit thermoplastic geomembrane liners is often the least-expensive means of providing for an RPB as referenced in API 650. API 650 Appendix I defines an RPB as follows: ‘An RPB includes steel bottoms, synthetic materials, clay liners and all other barriers or combination of barriers placed in the bottom of, or under an aboveground storage tank, which have the following functions: (a) Preventing the escape of contaminated material, and (b) Containing or channeling released material for leak detection. API 653 Section 6.4.2 directly addresses inspection intervals. Two types of inspection intervals are defined: • The initial inspection interval applies when a new tank is put into service or when an existing tank is put into a new service. This initial interval is to be no more than 10 years, unless one of the listed safeguards are used to reduce the risk of a leak. Section lists the following optional safeguards and their respective initial inspection interval • The subsequent inspection interval applies when a tank is being returned to its previous or similar service.

Degassing: solving the regulatory challenges

When operating hydrocarbon storage tanks one of the downsides is dealing with VOC emissions, which can be the result of diurnal temperature swings. However the major source is most likely due to refilling empty tanks or emptying tanks for cleaning or maintenance. VOCs result in unpleasant odours and are known to be a significant contributor to smog. At worst, they can be carcinogens.

New possibilities

This year’s Tank Storage Asia expo & conference moved to the brand new location of Kuala Lumpur, Malaysia. Despite Singapore being the regional petrochemical hub, Malaysia has the space, strategic location and economics to rival its neighbour. Opening the conference, Aiman Abdullah, general manager of Independent Oil Terminal (IOT) Kuching, gave an overview of Malaysia’s role as an emerging supplementary storage hub. Back in 2004 Assar Chemicals joined up with Petronas Dagangan Bhd and Shell Timur Sdn Bhd to set up an Independent Oil Terminal (IOT) at the Assar Senari Industrial Complex (ASIC). The idea behind the project was to replace the old petroleum terminal. The facility, which has been in operation since January 2007, is the only petroleum terminal serving both Petronas and Shell in southern Sarawak, and the site now has a storage capacity of 61,000K/L.