Tank Storage Magazine v08 i05


Volume: 8
Issue: 5
Date Published: November 26, 2012



Marine terminals: the next step in standards & safety

In October the Oil Companies International Marine Forum (OCIMF) published the second phase Marine Terminal Management and Self- Assessment (MTMSA) of its Marine Terminal Information Systems (MTIS) package. Marine Terminal Management and Self Assessment (MTMSA) is a standardised tool for global application to assist terminal operators in the assessment of the effectiveness of their management systems for berth operations and the management of the ship/shore interface. The guide can be used by terminal operators to demonstrate potential risks and show how they can be analysed and reduced. This supersedes the publication‘Marine Terminal Baseline Criteria and Assessment Questionnaire’, which OCIMF had launched in 2004.

Tighter controls on chemicals increases compliance challenges

The next landmark for the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) compliance is 31 May 2013. The legislation will bring tighter European controls on the manufacture, movement and use of dangerous or hazardous chemical products. The transport sector for hazardous chemicals and materials relies heavily on Classification, Packaging and Labelling (CLP) regulations for information on shipments. But whereas CLP provides information through labels, REACH legislation now states that more detailed information must be provided through the use of safety data sheets (SDSs) and that the information provided must be readily available to the relevant members of the workforce throughout the supply chain. This stage of REACH is expected to have a significant impact on both larger companies and SMEs in the cargo handling sector who, like all other sectors of the industry, will find the process of compliance complex, time consuming and challenging. To compound matters, a wave of similar legislation has been introduced in other parts of the world, increasing pressure to ensure compliance across the supply chain and adding further complexity into the mix.

Oiltanking keeps on growing

‘Opportunities in the oil storage market don’t come up every day, so when they do, we grab them with both hands,’ as both Oiltanking Asia Pacific’s president and VP for business development explain   Germany-based storage service provider Oiltanking surprised the market in October by announcing it was to acquire 100% of Singapore-based Helios Terminal and its holding company Chemoil Storage. The 503,000m3 capacity terminal storage facility allegedly cost Oiltanking $285 million (€223 million). The company is now in the completion phase of the process. ‘We are awaiting final Chemoil shareholder approval and stock market clearance, which should all be completed by the end of the year,’ says Koen Verniers, president of Oiltanking Asia Pacific. In announcing the sale Chemoil stated: ‘The company believes that structural changes that have occurred in the marine fuels market will, in the future, favour an asset-light business model that is able to respond quickly to volatility in volumes and margins. The proposed disposal is therefore being carried out to make more efficient use of the company’s resources by re-allocating funds currently tied up in storage assets.’

China on the rise

China’s bulk liquid storage sector has seen a big growth in capacity over the past decade amid surging oil imports to meet burgeoning local demand and rising volumes of chemical product imports. The state-backed oil majors are building new storage terminals and embarking on further expansions of their existing facilities in response to an expanding local customer base. China’s government is also encouraging domestic producers to increase their commercial oil reserves. International independent terminal operators also continue to expand their mainland presence, encouraged by the longterm favourable outlook for chemical products demand in the country and to keep pace with global chemical company client requirements for high quality storage facilities. Local players serving mainly local customers are also entering the chemicals storage sector, further keening up competition. According to China International Capital (CICC), estimates quoted by the agency in the China section of its 2012 Oil & Gas Security Emergency Response of IEA countries report published in July 2012, China’s crude oil commercial storage capacity stood at around 310 million barrels (approximately 49.3 million m3) in 2010 and planned projects suggested it could increase by a further 150 million barrels by the end of 2012. CICC estimated the country’s refined product storage capacity at around 400 million barrels in 2010, which is seen rising to almost 500 million barrels by 2015.

Big plans, but what is the reality?

With not all planned projects in Malaysia going ahead, David Hayes looks at the status of the proposed projects across southeast Asia   Demand for tank storage in Singapore and Malaysia is expanding as traders build up petroleum inventories to improve their competitiveness in supplying customers in China and southeast Asia, where economic growth continues to lift consumption of fuels. The world’s refining capacity is moving east. Old refineries are closing in Europe and the US and new ones are opening in east Asia. The owners have invested to ensure they can meet specifications anywhere and supply their products everywhere. Building a new refinery creates a large amount of new petroleum production capacity in one go while the local market may expand more slowly. Exporting helps use surplus capacity with traders aiming to buy stocks when prices are low, ready to sell when prices are higher. ‘Traders in Singapore aim to supply everywhere,’ Chris Skrebowski, director of Peak Oil Consulting, says. ‘The Far East market is growing most rapidly. By chartering a reasonably large tanker, traders can extend the range of where they send their petroleum cargoes.’

State-run companies look to the independents for storage needs

India’s third party tank terminal market could be about to enter an important expansion phase as government-owned petroleum companies look for storage capacity in new locations to supply the growing demand for vehicle and industrial grade liquid fuel developing across the country. Working with tighter investment budgets than India’s private energy companies, state-run Indian Oil Company (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) are considering working with third party terminal operators rather than building their own tank farms to meet their internal growing requirement for new storage capacity. ‘We are looking at inland terminal possibilities,’ says Sanjiv Lele, general manager for western India at IMC, India’s largest third party terminal operator. ‘These inland terminals would supplement storage facilities for government oil companies who have their own cross-country fuel pipelines and distribution facilities. They can use private companies to provide terminal capacity at a better cost, rather than taking a risk themselves.

Jurong Island: breaking ground in the literal sense

With space already tight on Jurong Island, terminal operators are eagerly awaiting news on the region’s space saving initiatives. Tank Storage magazine talks to JTC to find out the latest on its underground rock caverns   Singapore’s Jurong Rock Caverns (JRCs), when complete, will provide 1.47 million m3 of storage space and free up 60 hectares of land on Jurong Island, providing enough space to house up to six petrochemical plants. So it is no surprise that operators and producers alike are keen to see the project develop. Construction on the JRCs started in 2007 and JTC Corporation Singapore’s principal developer, is in charge of the project, and was hoping to get an operator on board by the second half of 2012. It had pre-qualified, established players like Vopak and Horizon Terminals back in 2007 but was forced to delay the process with the arrival of the global financial crisis in 2008. The process to ensure that the chosen operator is capable and qualified to manage the caverns is a long one but the JRC operatorship contract is still scheduled to commence in 2013.

From the track to the tank

Safety is at the heart of the oil, gas and chemical industries. Firms are constantly assessing how to improve the safety and reliability of their equipment to ensure the protection of people, buildings and assets. However, some equipment is often overlooked. Hoses are used for the transfer of fuels, chemicals and hazardous liquids. This can be ship to shore, ship to ship, ship to tank, plant to truck, truck to tank, in plant and rail car transfer. Mainly because of a lack of engineering expertise and knowledge of alternatives, a large number of low grade hoses are specified for these purposes. While these hoses may seem superficially attractive because of their low cost, in reality they are a weak link in a hazardous environment. The lack of investment in their testing and production means they are inflexible, often too heavy and weak, and costly to repair and maintain.

Making insulation a long term investment

Given the wide range of industrial tank insulation systems and technologies available today, tank owners face the difficult decision of choosing the best solution to meet their needs. Tank owners often naturally default to the lowest insulation bid when purchasing a system, opting for the solution that meets their budget and offers the most apparent short-term benefits. But choosing an insulation system based on lower initial costs alone is not always the smartest decision. While tank owners may initially pay less for the overall system, they could end up spending more in the long run on higher operating costs and increased maintenance requirements. Fortunately, in the past decade, the thermal tank insulation industry has seen a shift in the use of traditional systems to more sophisticated technologies. In contrast to predecessors, these newer systems offer cost-effective solutions that generate value over time with lower installation costs, superior structure and aesthetics, enhanced performance and reduced maintenance requirements. For tank owners, once the decision is made to purchase insulation for a tank, certain factors must be taken into account when selecting the right supplier.

Looking to the future

More than 900 attendees, 285 companies, 186 first-time visitors and 80 countries represented made it the biggest EMEA HUG ever   This year’s Honeywell Users Group (HUG) had an intergalactic feel as the company literally launched the next generation of its Experion Process Knowledge System (PKS) Orion solution to the global market. Touted as a ‘major evolution of process control’, Experion PKS Orion introduces two major innovations: it is the first industrial process system to use universal input/output (I/O) channel technology to remotely configure process and safety systems without the need for additional hardware; and it comes equipped with a complete virtualisation solution. The universal I/O technology simplifies engineering and configuration during the design stage of a project, which can save up to 33% of the installation costs. Late changes, which often result in costly project delays, can now be done through remote access rather than manipulating hardware in the field.

Palm oil lining solutions

Palm oil is an extremely versatile material that we encounter in our daily lives, more often than we might expect. Grown predominantly in the countries of South East Asia, including Malaysia and Indonesia, the list ofuses for palm oil and its derivatives is a long one. From confectionery to cosmetics, cooking oil and many things in between, palm oil is a material that is being increasingly as either a component of, or as a raw material to produce biodiesel blends and biofuels. As well as being used in its crude state, in order to fulfil the many roles it has, crude palm oil must undergo a range of chemical processes and refinements to produce new materials such as olein, stearin and palm fatty acid distillates.

Layered protection

Critical safety functions, such as emergency shutdowns, need to be kept separate from generic IT solutions to ensure efficient, fail-safe operations   Thanks to the prevalence of high performance computing platforms, high-speed communications and impressively large mass storage devices, industry has been able to craft highly integrated high-tech environments. The benefits of such integration include plant/business-wide operational efficiency plus the lower installation and maintenance costs associated with a single ‘IT foundation’. Accordingly, within many safety critical industries, it is becoming increasingly tempting to implement safety functions, such as emergency shutdown (ESD) within plant control systems. This is, of course, of great convenience. But take things too far and all of one’s eggs might end up in a single basket. In a report published in 2010 by the Scandinavia-based research organisation SINTEF, concern was expressed over the increasing levels of inadequate segmentation between Basic Process Control Systems (BPCSs) and Safety Instrumented Systems (SISs).

Germany: know what's changed

For those that missed the 8th Conference on Flat Bottom Tanks in Munich, Peter Patterson provides a summary of the new regulations concerning pollution control that need to be in place by 2015 and the new rules regarding the Water Act, which come in from 2013   At this year’s 8th Conference on Flat Bottom Tanks, Karen Pannier from the German National Environmental Agency Umweltbundesamt gave an overview of the amendments to the 20th German Federal Emission Protection Directive (BlmschV). The directive, concerning petrol vapour recovery, came into force in October 2009. However, this needed to be modified to include biofuels and naptha, plus to include the best available techniques and the new changes that came in on 24 April 2012. Emission sources include storage tank seals, pumps, floating roofs being lowered, shutoff devices and flanged joints.

A problem shared...

This year’s Tank Storage Association Conference in Coventry, UK was again packed up with delegates wanting to hear the latest regulatory, safety and technology updates. Peter Baker, who works for the COMAH Competent Authority (CA) at the HSE, opened the one day event by giving an overview on the progress the CA has made over the last year. From 2011-2012 there were 307 Reporting of Injuries, Diseases and Dangerous Occurrences Regulation (RIDDOR) reports, 142 of which were dangerous occurrences and 91 were precursor type incidents (explosions, fires, and dangerous substance releases). Inspectors issued 278 enforcement notices detailing 642 breaches, 92 of which related to COMAH duty holders and 58 of those were for top tier sites.