Tank Storage Magazine v08 i02

40.00

Volume: 8
Issue: 2
Date Published: February 27, 2012

Category:

Headlines

Recession hits refineries

Dwindling refining margins, aging infrastructure and increasing competition with Asia and North Africa mean many refineries across western Europe and the US are either up for sale, partially closed, mothballed, in the middle of conversion to a terminal, or have already been converted. Not all refineries will find a buyer, and not all that do will find themselves becoming terminals, but refinery-to-terminal (RTT) conversion is a growing trend. Refining margins have been on a slow downward slide for several years, and it is this gradual decline, now exacerbated by the current economic slump, that has hit refiners especially hard. They have hardly been complacent, but the steady deterioration in the commercial landscape for the processing of crude into products has facilitated something of a ‘wait and see’ approach. Perhaps in the hope that commercial conditions would improve, few refinery operators have been prepared to commit to substantial investment in processing unit upgrades or modernisations. These slowly eroding profits, rather than a short sharp shock, mean there has been an absence of sufficient impetus for refineries to either invest in upgrades, or to sell up.


Black gold rush

Texan oilman George Mitchell was a rich man when he started work in the 1980s to unlock gas from the Barnett Shale in Texas. He was even richer in 2002 when his company, Mitchell Energy & Development, was sold to Devon Energy for $3.5 billion (€2.6 billion). Another decade on andthe horizontal drilling and hydraulic fracturing technologies he pioneered in the Barnett have transformed the energy landscape in the US. According to Washington’s Energy Information Administration (EIA), the estimated unproved technically recoverable shale gas resource for the US is 482 trillion cubic feet (TCF), with the 40TCF Barnett shale now dwarfed by other shale plays such as the Marcellus (141TCF) and the Haynesville (74TCF). This glut of cheap gas– at the time of writing prices were under $2.50per MCF, around one third of the price in the UK, and natural gas inventories were hitting new seasonal highs – has reinvigorated the country’s once moribund petrochemicals and steel industries, now enjoying competitive advantages dueto low cost feedstocks.


Gearing up for REACH 2013

Almost a year has flownby since the first phase of REACH registration completed successfully, with manufacturers, importers and distributors of over 1,000 tonnes of chemicals a year registering their chemicals with the European Chemical Agency (ECHA). Since that time, the chemical industry has shifted its focus onto the next REACH landmark –REACH 2013 registration. At the European Commission’s REACH Registration conference in September a new campaign– ‘REACH 2013 - ACT Now!’ – was launched b ythe ECHA. The goal of the campaign is to ensure chemical manufacturers, importers and downstream users start preparing for the 31 May 2013 REACH registration deadline now. By this date, all phase-in substances manufactured or imported in the EU above 100 tonnes a year will need to be registered under REACH.


Latest in the pipeline fight

January’s decision by the Obama administration to deny TransCanada a presidential permit for its Keystone XL Pipeline project maintains the uncertainty in how to better monetise growing production of Canada’s oil sands and shale oil in North Dakota and Montana. It also blurs the market’s response as to how trapped capacity at the Cushing supply hub in Oklahoma would be unlocked. What is likely is that new projects will be announced addressing these opportunities if Keystone XL remains a planned theory stuck on the drawing board. To be sure, the pipeline would not satisfy all the logistical needs in reaping the benefits from the technological breakthroughs that are driving growing output of Canada’s oilsands and of shale oil from the Bakken formation in the US. However it would go a long way towards meeting this goal, serving as a shipping backbone inmoving this raw material. After more than three years in carefully moving through the permitting process, more than double the typical timeframe, the Obama administration said Keystone XL – a proposed pipeline linking Hardisty, Alberta with US Gulf Coast refineries – was not in thenational interest of the US.


Preparing for a big freeze

IMTT’s terminal in Quebec, Canada was purchased in 1986, and now has 52 storage tanks ranging between 100m3 and 34,500m3 capacity. What makes the terminal different from most other terminals is the environmental condition in which it has to operate. Marc Dulude, executive VP, told Tank Storage magazine that the temperature had been as low as -36oC for a few days. During the low temperature season between 15 December and 15 March, it is generally in the region of -15oC to-20oC, with intermittent short periods of 3oC to 6oC. Snow can continue to fallwell into April, and because of the humidity, snow volumes can be large. High velocity winds are another of the problems the terminal has to contend with.


Turning uncertainty into opportunity

These are challenging times for the European project. The sovereign debt crisis continues to bite, with Greece promising to implement further austerity measures in a country already pared to the bone; Germany’s leaders under pressure at home not to capitulate to further bailouts of feckless neighbours; France looking inward as the presidential elections heat up; and the UK retreated from an EU fiscal compact. Beyond Europe there are worries about Iran and the continuing instability inparts of North Africa and the Middle East, all vital to oil flows to the west. Oil demand is sluggish in Europe, a situation exasperated by the refining crisis – since mid 2008 nine refineries have closed in Europe with more expected, particularly amongst older vintage units– and price volatility remains a concern. There is also, of course, the uncertainty that comes from constantly changing legislative and policy framework of the EU.


Selling? Important factors for the smaller independents

Smaller scale, family owned independent storage operators continue to enter the market, particularly in regional niches in mature markets like the US and western Europe, as well as in the rapidly growing markets in Vietnam, India, Brazil and elsewhere. In order to embark on the journey of a business sale, it is of upmost importance to understand the exact reasons for the business sale as it significantly impacts the selling strategy and approach to the market. This assessment should include consideration of the seller involvement post transaction(i.e. transition period), as well as various other factors such as tax, estate planning and liquidity considerations (i.e. cash and stock component of the purchase price). Social issues such as how the sale will be received by employees, the local community and current and prospective clients should also be considered and addressed. These factors will shape the objective and desired outcome of the sale and are key in determining which prospective buyers should be contacted and the type and characterisation of information provided.


No such thing as waste

Belgium-based Anno Chemicals is no ordinary trader. The company specialises in recovery, storing and redistributing off spec product. Although refiners, shipping companies and terminal operators take every possible precaution to prevent cross-contamination and product degradation, incidents inevitably occur. A shipping vessel not being properly cleaned is one of the primary causes of contamination, although overheating and freezing can also change a chemical’s physical characteristics. Freezing conditions can also make cleaning a lot more complicated, as pockets of frozen water are often overlooked, and seawater contamination is another potential risk.


Keeping everything in one place

TanQuid, Germany’s biggest independent tank terminal operator, was faced with this particular challenge in 2008. At that time, TanQuid was a business created from three newly merged companies with completely different system structures. It was clear what had to be done. The new company urgently needed a standard terminal management system that could draw upon the same data at all of its sites to enable centralised terminal control. TanQuid selected the OpenTAS terminal management and automation system from Germany-based consulting and software company Implico. TanQuid was spun off from VTG-Lehnkering as an independent tank storage company. It subsequently expanded with the acquisition of the Petroplus and IVG tank terminals sites. The company now owns 14 tank terminals with storage capacities of between 24,500-878,000m³. It operates two further tank terminals on behalf of other companies, and on 1 January 2012, the Transtank joint venture with BP Europa SE was added to the portfolio. OpenTAS had been used successfully for many years at the five sites of the former VTG-Tank lager (one of Implico’s first customers) so it made sense to use the technology for all the companies’ sites.


Europeâ

As Europe is going through an unprecedented financial and economic crisis, the oil and gas industry continues to face an uncertain business environment. Another recession could lead to reduced demand and further increase the pressure on margins in downstream operations. This has suppliers and buyers looking to exploit any operational efficiency they can. Terminal operators play a critical role in helping suppliers and buyers achieve those efficiencies, and can benefit their own operations while doing so. To gain a competitive edge, terminal operators need to be mindful of the big trends in the industry and make sure their Terminal Automation System (TAS) is capable of supporting state-of-the-art supply management systems that suppliers intend to use in order to maximise their efficiency. And for most TAS, a simple configuration change is all it takes to achieve this.


Increasing inspection activity

Storage tanks are an essential part of the distribution network and are vital in buffering the varying demands of end users. They are most commonly built from steel with thickness from 5-15mm. Steel is a relatively cheap and strong material that can be easily fabricated on site but does have the inherent problem of corrosion over time. The inevitable corrosion of the floor plates is a particular issue as it requires emptying and cleaning of the tank, taking it out of service during the work. This is an expensive exercise, and even more so when a storage site is near capacity, resulting in lost income as well as the cost of inspection. Inspection of atmospheric storage tank floors presents the tank engineer with the combined problems of needing to inspect large areas up to thousands of m2 efficiently whilst also identifying millimetre sized corrosion that could lead to leakage.


Cooperating with the customers

Inspection and maintenance of storage tanks and piping systems are not only expensive but also involve risks. Nevertheless, inspections are often carried out too frequently and unnecessarily. Fixed frequencies are strictly observed only to conclude, after the fact, that inspection was not really necessary. The present guidelines allow for a transition to more flexible inspection frequencies per tank as long as these are based on a reliable analysis of failure risks and tank condition. Risk based inspection (RBI) is the method used to schedule inspections on the basis of risks rather than fixed intervals. The method is based on the fact that there is a great deal of knowledge available on how various variables impact the condition of a storage tank and/or piping system. Such variables include corrosion, the thickness of the tank wall when last inspected, the type of medium being stored and the average operational period for the tank. By identifying these and other variables for each storage tank, it becomes possible to estimate the risks involved and to accurately plan inspections when they are really necessary.


Fire fighting on the go

Mobile high volume pumping is constantly developing in order to get bigger, better, faster and lighter equipment to help fire fighters fulfil their tough job. Incidents such as the Buncefield oil terminal fire in the UK, the Dalian pipeline explosion in China, and the Fukushima Nuclear reactor disaster in Japan have all made use of this equipment. This is due to their high capacity, quick deployment, easy operating, modular configuration and flexibility. Furthermore they can also be used as a backup system if the fire main is under construction or shutdown for maintenance. With a mobile system standby, the production does not have to be stopped and safety is guaranteed.


TEEX announces revision to fire fighting training

One of the worst case scenarios emergency responders face each year is incidents involving fires at flammable liquid storage facilities. According to the National Petrochemical and Refiners Association (NPRA), there are 16.8 million barrels of product refined in the US each day from 149 operable refineries. It is clear there is a need to have responders trained and prepared to respond to emergencies which result from flammable liquid fires. As one of the primary providers of emergency response training in the world, the Texas Engineering Extension Service (TEEX) – Emergency Services Training Institute (ESTI) www.teex.org/fire should be in a position to assist emergency response organisations in training their members in the safe response to liquid storage facility fires. To meet this need, modifications to Training Project #45 – API Storage Tank were needed.


There is such a thing as a free lunch

In less than five months a new bitumen storage tank was built at the Shell Nederland Raffinaderij’s TGI plant in Pernis, the Netherlands. Construction took place during the third and fourth quarter of 2011. Since the tank was built in a live environment, safety was of the utmost importance. To meet this challenge, designer and constructor Mercon used a fixed tower crane with special safety features instead of a mobile tower crane. The project started at the end of August 2011. The original deadline for mechanical completion was 1 February, but Mercon was able to bring this forward to before Christmas.


The green clean

Over the past 10 years increasingly stringent health, safety and environmental regulations have been driving the need for more specialised and effective cleaning products and processes. These can reduce the volume of waste produced from tank cleaning as wellas cutting the time it takes to complete the project. The use of more environmentally sound biobased chemistry is becoming possible as prices start to fall inline with petrochemical derived equivalents.


Oiltanking enhances actuators

Oiltanking installed a new split body ball valve at its Mediterranean Malta Tank Terminal in 2011. This is a first for Belgian valve supplier Belven, which supplied the BV4 valves, equipped with SI-Pro fail-safe actuators from Rotork Skilmatic. Rotork’s local agent Prodim, a specialist in valve automation, provided the engineering, sizing and delivery of the newly released and upgraded SI-Pro unit, which was originally launched in 2005. The 2012 release features the additional bluetooth setting and download possibilities, extended fault and diagnostics (which can be transferred from the field and to a standard PC for analysis and storage), partial stroking, a new indication display and many more.


Petroleum loading with a safety rope

Breakaway couplings are compulsory in many situations, but operators still need to decide on the most efficient variety. The Kiel Canal in Schleswig-Holstein connects the Northand Baltic Seas and makes the longer detour around Denmarkof about 900km unnecessary. This saves fuel as well as time. Petrol stations along this waterway depend on time saving and safe loading technology.