Common REACH mistakes
The EU REACH regulation may have been in force for several years, but still many companies are confused about how to comply with it. It does not help that some of the legal text and official guidance is unclear on some key issues. Small- and medium-size enterprises (SMEs) are especially vulnerable since they do not usually have inhouse regulatory specialists able to grapple with the many volumes of REACHrelated information that exist (and which continue to grow in number and size). Consequently, SMEs are more likely to make mistakes than large companies when attempting to comply with REACH, and in some cases these may have catastrophic effects on their businesses.
Storing oil products on the equator
In contrast to the extreme cold temperatures experienced at the IMTTQuebec oil and chemical storage terminal where the winter temperature has been -36Ë
Oil futures forward curves: recent developments and outlook
Forward curves and demand for tank storage capacity are indisputably linked. A so-called contango term structure on the futures exchanges stimulates traders to hold inventories, whereas a backwardated term structure stimulates traders to minimise stocks to a level which is only limited to what is strictly needed to facilitate logistical processes. It is apparent that the value of storage capacity is much higher in a period in which a contango is applicable. At the moment oil markets are in backwardation and this undermines the value of tank storage assets. The question on each and every tank storage operator is: how long will this situation last? It is impossible to answer this question with 100% certainty but a thorough analysis of the situation does give valuable insights. Commodities like oil are different from other asset classes in the sense that an embedded timing option is present in storable commodities. When it is optimal to store a commodity for future consumption then it is priced like a financial asset, but if it is optimal to consume it immediately, then it is priced as a consumable good. Thus, a commodity’s spot price is the maximum of its consumption and asset values.
Why infrastructure funds invest in storage
The rise of infrastructure funds in recent years has been driven in part by institutional investors with long-term liabilities, such as pension funds and insurance companies, searching for investments with longterm, stable cash yields, ideally with protection from inflation through adjustment of revenues according to an inflation index. Infrastructure funds backed by such institutions focus on sectors such as gas distribution pipelines, electricity transmission grids, water utilities, toll roads and privately developed facilities for government use such as schools, hospitals and prisons. These types of investors aim to avoid commodity price volatility and output volume risk. Indeed, since the financial crisis, some investors are leaning toward sectors such as water utilities and schools where revenues are stable even when GDP is down, and away from sectors such as ports that are viewed as too ‘GDPcorrelated’ – that is, cyclical. In the tank storage industry revenues are not based on commodity prices or the output of a production site – non-cyclical qualities that appeal to infrastructure funds.
Natural gas prices, which slumped to a 10-year low in April, may be bad news for refiners, but have prompted something of a resurgence in the chemical sector. Over the last few years dismal demand, burgeoning costs and faltering consumption levels have led to an increased number of producers choosing to mothball or idle chemical plants. But this may be about to change as BASF, Socar and Dow Chemical have all announced new plants or investments in the last few weeks. Germany-based chemicals giant BASF announced an investment of €150 million to establish a new chemical manufacturing facility in Gujarat, India. Dow Chemical highlighted plans to invest in a new manufacturing plant in Saudia Arabia to produce coatings, and Azeri state energy company SOCAR spoke of its intention to build a chemical plant worth up to $14 billion (€10.6 billion) in the first quarter of 2013.
Multiple reasons for growth
US crude oil storage capacity will increase by 8% in the four years leading to 2015, an average of 2% per annum, according to GlobalData. Refined petroleum storage will advance by 2.5% over the same period. As recently as February this year, Buckeye Partners announced that its subsidiary, Buckeye Tank Terminals, had signed a definitive agreement with Chevron to purchase its liquid petroleum products marine terminal in New York Harbour for $260 million (€199 million) in cash. ‘We believe that adding the Perth Amboy facility to our existing portfolio of assets will unlock significant long-term value across the Buckeye enterprise,’ Buckeye’s president and CEO Clark Smith says. ‘We have near-term plans to transform the existing terminal operations at Perth Amboy into a highly-efficient, multiproduct storage, blending, and [high] throughput facility with an investment of approximately $200 to $225 million of growth capital over the next three years.’
Three fundamental roadblocks to a thriving organisation
The great majority of the problems that leaders face revolve around three fundamental areas: 1) Incompetencies 2) Inefficiencies 3) Complacencies. Organisations that take these three areas seriously and develop intentional and strategic initiatives to deal with each of these will generally find themselves way ahead of their competition. Think about any activity that is pursued and what the major causes are that keep success and excellence from occurring. If it is music for instance, a person who wants to become excellent at the guitar or the piano will face all three of these obstacles. Their incompetence obviously is a deterrent to their excellence. The inefficiencies abound as skill and competency develop. Complacency is one of the most challenging obstacles for most people wanting to learn a new musical skill because their incompetence and inefficiencies can easily discourage them over time to not be as committed to the goal. This is true in virtually every domain of life. These three roadblocks have the same effect on any organisation that is trying to thrive and beat out competition.
Fire profiles and tank configurations: what's the risk?
When it comes to evaluating protective measures for largescale tanks, it is imperative to base decisions on an honest risk evaluation, and a longterm impact assessment of the potential loss to revenue. So many factors figure into the equation of protecting the life of a tank over the years of use. The responsibility of protecting these tanks rests on the shoulders of storage terminal operators and fire protection engineers (FPE), production operators, maintenance personnel, and fire emergency response entities. From system design to emergency response, this team is tasked with protecting the immediate threat to life, safety and property, as well as preserving the long-term revenue generated over the lifetime of the asset. Owners and FPEs should consider three major components when developing fire protection solutions: 1. Tank configurations 2. Fire incident profiles as they relate to tank configurations 3. Potential long-term revenue loss following a catastrophic event.
Mixer selection guide
One challenge for the global refining industry is the ever changing market conditions; trapped between hard to process, poor quality (although less expensive) opportunity crudes and light crude oil refining. The aforementioned segments of the petroleum industry involved with aboveground storage tank ownership share many environmental issues. One such issue is maintaining tank integrity. Failure to maintain this asset can have far reaching consequences if no programme is in place such as API 653 or EEMUA 159. As process units have become more sophisticated, their performance requires the need for a uniform feed to ensure predictable product yields and even product quality. This has prompted a requirement for more accurate methods of mixing crude oils.
The conventional method for dismantling or repairing petroleum storage tanks is to cut them apart with oxyacetylene torches and handheld gouges. Sound a little hazardous and time consuming? US-based leak detection expert Mass Technology thought so too. In 2007 the company launched its Safe-Cut service and acquired the rights to a cold-cutting process for the refinery industry using ultra-high pressure waterjets. Safe-Cut’s entirely selfcontained mobile rig does not require access to water or electricity. The rig is equipped with several portable waterjet cutting systems, including two Ragworm robotic waterjet cutting systems designed by Jet Set Hydro Technics specifically for removing tank floors, roofs and side-shells, and a Jet Edge portable Spyder waterjet cutting system that is capable of linear, pipe, circle and radius cutting. Safe-Cut powers its waterjet cutting systems with three Jet Edge dieselpowered waterjet intensifier pumps, including a 60,000 psi, 80hp Jet Edge iP60-80DS pump; a 55,000 psi, 280hp Jet Edge iP55-280DS pump; and a 55,000 psi, 260hp Jet Edge iP55-260DX pump.
Controlling lightning damage at transfer stations
For one company lightning had been a major issue, especially considering many of its facilities are located along the Gulf Coast. Its facilities are located in open areas along rivers and canals, and therefore are very susceptible to direct and nearby lightning strikes. Company personnel had seen lightning protection installed at other facilities, and decided to actively investigate the available options. The main problem was damage to instrumentation, particularly 4-20 mA analogue level transmitters and PLCs. In many cases, the inability to regulate flow caused shut down of operations, resulting in additional financial losses.
Recommendations for reducing risk
According to a review of petroleum storage tank fires between 1951 and 2003, the number of tank fires reported in the worldwide media is in the range of 15 to 20 fires per year. The extent of the tank fire incidents varied considerably, ranging from a rim seal fire to multiple, simultaneous full tank fires. Of the 480 tank fire incidents reported, about one-third are attributed to lightning. Another study, sponsored by 16 oil industry companies, found that 52 of 55 rim seal fires were caused by lightning, and concluded that ‘lightning is the most common source of ignition’. Until API RP 545 was published in 2009, the existing lightning protection standards for the petroleum industry provided little guidance. The research performed on behalf of API did provide valuable insight to understanding the lightning-related ignition mechanism. The three primary recommendations offered in API RP 545 do make important first steps to reducing lightning-related risk for floating roof tanks (FRTs).
Building tanks for biofuels
Second generation biofuels, or biofuels produced from biomass non-food feedstocks, are finally getting close to commercial reality. And as production grows out of pilot scale, tanks are required to store the end product. After great success with a pilot scale plant and then a 400 time scale-up demonstration plant in Texas, one producer made the decision to move ahead with an 11 million gallon per year commercial-scale production facility in Mississippi. The plant will process woody biomass from native Southern Yellow Pine to produce environmentally friendly petrol and diesel blendstocks.
New specifications about electrical conductivity
For each member country, EN standards are adopted into a national version. Since 1999, the German EN 12115 version has required that OHM hoses would need electrical conductivity through the hose wall (maximum electrical resistance 109 Ω). This now has been universally adopted in the standard. Wherever the EN 12115 is valid, the new safety requirements are applicable: Ω (and M) hoses used in explosive environments must have an electrical resistance through the tube wall of maximum 109 Ω. To indicate this property, these hoses are identified as Ω/T respectively M/T hoses. Hose assemblies with an electrical resistance through the hose wall of greater than 109 Ω are marked with M or Ω respectively.
What goes in, must come out
Vapour recovery systems are a common item throughout the world today at distribution terminals in any operation involving the transfer of products, ranging from petrol to BTX products and increasingly crude oil. Indeed some of the largest vapour recovery units (VRUs) in the world are used in crude oil transfer operations, with vapour handling capacities of between 10,000m3/hr and 40,000m3/hr regularly arising. Activated carbon VRUs are the most commonly installed units. They offer a great degree of operational flexibility, with high turn down capabilities of the vapour flow and also inlet hydrocarbon concentrations. An activated carbon VRU consists of two or more activated carbon beds. At all times during the operation one bed is open to the vapour line – in the ‘adsorption mode’ – while the other undergoes a regeneration by means of vacuum. The activated carbon is used in the system to adsorb the hydrocarbons from the vapour stream and can only adsorb a given mass of hydrocarbon before it approaches saturation. Consequently, the carbon must be regenerated in order to restore its working capacity, such that it can effectively adsorb hydrocarbons in the following cycle.
Joint effort needed for large dome project
Last year the Oilhub Korea Yeosu Co. (OKYC) embarked on one of the largest ever aluminium geodesic roof projects to be awarded in one contract. The OKYC Greenfield project is a joint venture between Oiltanking and Korean National Oil Company (KNOC). The contract consisted of 36 new geodesic aluminium dome roofs. The new storage tanks range in diameter from 19-69m and store a wide range of fuels mainly imported to Korea.