Tank Storage Magazine v09 i05


Volume: 9
Issue: 5
Date Published: September 2, 2013



Africa: a continent of opportunity and challenge

Africa offers significant opportunities for the bulk liquid storage sector, particularly in oil products, but the continent’s inadequate inland communications infrastructure remains a major challenge to demand growth   One of Africa’s largest and longest-established independent providers of oil and gas products and services is Swiss company Oryx Energies which today owns bulk liquid storage terminals in Tanzania, Sierra Leone, Senegal, Nigeria and Benin. It also has a large oil storage terminal under construction at Las Palmas in the Canary Islands, which will serve the west African market and the bunkering market coming on stream next March. ‘We have two kinds of terminals. We have storage facilities that are essentially dedicated to third parties, that would include TIPER in Tanzania, and in the future, the new terminal in Las Palmas, and Calabar in Nigeria,’ says Thierry Genthialon, MD of asset management and business development at Oryx Energies. ‘The others are always open to third party storage but we tend to use them to full capacity and that’s the case at Dakar in Senegal, in Benin, Sierra Leone and at our other terminal in Tanzania.’ In addition to the TIPER terminal in Dar es Salaam, which Oryx Energies jointly owns with the Tanzanian government and has management control, the company wholly owns another bulk liquid import terminal in the port. This latter facility provides further bulk fuels storage as well as additional lubricant storage at its blending plant. This terminal typically is fully utilised by Oryx Energies and is not formerly open to third parties, although Genthialon says the company is always happy to accommodate requests for storage.

Wider repercussions

When ENOC opened its new 508,000m3 terminal facility in Tangier last year, it had three main purposes: serve the local market, provide bunker fuel and draw on business from Europe. ‘The terminal is located at the crossing of two major maritime routes and only 15km from the European Union,’ explains Philippe Marache, GM of Horizon Tangier. What the terminal was not banking on however, was the market shifting to backwardation. ‘It’s not a good time for trading and throughput levels have slowed significantly,’ Marache points out.

Regulatory update

Jane Besch, CPP manager for operational excellence at Vopak Americas, takes a look at the regulatory agenda affecting terminal operators   With President Barack Obama’s second term now underway US policy has a renewed focus, at least for the Environmental Protection Agency (EPA), on greenhouse gases and climate change, as well as safety and security. Gina McCarthy was officially confirmed as the new EPA Administrator in July. McCarthy had been the assistant administrator for EPA’s Office of Air and Radiation under Lisa Jackson. She was chosen, in part, for her work at the EPA relating to climate change. In late July, McCarthy gave her first public speech at Harvard Law School, where she argued that climate change solutions and other environmental protections can fit into a national and global economic agenda – they do not have to be in opposition to one another. She challenged: ‘Can we stop talking about environmental regulations killing jobs, please?’1

Reducing risk while minimising costs

Pinnacle Asset Integrity Services explains the unique routine it uses to address the implementation and management of risk based inspection programmes for tanks   With the guidance of OSHA’s Process Safety Management (PSM) programme, refineries, chemical and petrochemical facilities are developing more comprehensive and technically advanced Mechanical Integrity (MI) programmes. And within those programmes, atmospheric storage tanks (ASTs) continue to be high priority items due to the extensive time and cost associated with cleaning and inspection. But, as operators continue to build best in class management programmes, tanks are emerging as the frontrunners in terms of cost and risk mitigation. While tank inspections represent a large cost for facilities, they also present logistical challenges for operators that coordinate hundreds of tanks across thousands of miles. Managing these inspections often requires more strategic planning than those vessels seen in a large, concentrated facility with a full time inspection department. But even in large facilities, the extensive nature of tank inspections often results in grave deficiencies in the area of data management. Instead of utilising data to trend corrosion rates or predict failures, large stacks of documentation are often stored in tank inspection cabinets and only resurrected 15 years later. In terms of risk based inspection (RBI), tanks necessitate a different approach than pressure vessels and piping. Tank risk must be assessed differently for the following reasons:

New fuel = new opportunities

Demand is growing for LNG as a marine transport fuel, so what does this mean for storage operators?   The shipping industry is in a slump. Following a new build spree there is a glut of capacity weighing on a market still reeling from the post-2008 contraction in global trade. There is no sign of any near-term relief as the June 2013 report from ratings agency Moody’s maintains the negative outlook it posted in 2011 for the next 12-18 months. High bunker fuel costs and the credit squeeze are only adding to the industry’s woes. The financial pressures are being exacerbated by regulatory requirements to upgrade the fleet to meet ever tighter emissions controls. The maritime industries may not be a big contributor to global greenhouse gas emissions (more than 90% of global commerce is conducted by sea yet maritime shipping produces just 2.7% of the world’s carbon emissions) but they are one of the fastest growing polluters, with maritime’s emissions in the EU alone expected to rise more than 65% between 2010 and 2050 under a ‘business as usual’ scenario. Of course, it is not business as usual as the International Maritime Organisation, the UN agency for shipping and marine pollution, has already deployed a series of emissionscurbing regulations. There are particularly strict measures for sulphur oxide (SOx), nitrogen oxide (NOx) and particulate matter for ships that trade within designated Emission Control Areas (ECAs) in North America, the Baltic Sea, the North Sea and, from January 2014, the US and Caribbean area. As these regulations are ratcheted down (from January 2015 the permitted sulphur content in the Baltic Sea, North Sea and English Channel will drop from 1% to 0.1%) shipowners need to find ways of ensuring their fleet is compliant.

Changing everything

As the US Department of Energy makes clear its intention to approve several licenses for the export of LNG, billions of dollars in terminal and pipeline capacity development is at play looking to change the globe’s energy pricing, storage and distribution landscape   Viewed as a potential windfall for the tank storage and distribution sector, new secretary of the US Department of Energy (DoE), Ernest Moniz, made one of his first major acts in office: the granting of an export license to the Texas’ Freeport LNG terminal – owned in part by Conoco Phillips. This made it only the second facility approved to ship gas to non- Free Trade Agreement (FTA) countries. Two years ago, the DoE authorised export of LNG to non-FTA countries by Houston’s Cheniere Energy for shipment of up to 2.2 billion cubic feet per day from its Sabine Pass LNG terminal in Louisiana. ‘With former Secretary [Steven] Chu it was renewables, renewable, renewables,’ says James Tramuto, VP of Southwestern Energy in Arkansas, a gas producer who recently presented at the Energy Information Administration’s June summit on natural gas development. ‘While at Massachusetts Institute of Technology, Secretary Moniz authored studies on natural gas and the economic impacts of exports.’ The DoE’s willingness to allow export of LNG, even without free trade agreements in place is major news for buyers as well. Japan, for instance, is focused on shifting its energy security away from nuclear in the wake of Fukushima and currently has the biggest LNG storage tank under construction. For Japan, which does not have an FTA with the US, the DoE approval in May for the Freeport project has increased the reality of LNG imports, not just from a new supply source but also at a new pricing index – Henry Hub gas prices.

Developing a safety culture

A terminal manager, who worked at Tosco for many years, discusses how he changed attitudes to safety at four terminals in northern California   There are many reasons why a company may wish to enhance their safety culture: regulatory ‘encouragement’, an effort to control costs through the reduction of injuries and incidents or it may be that the safety programme does not meet management expectations. Whatever the reason, moving an organisation to a more mature health and safety culture will not happen overnight and it cannot happen without substantial effort. Step changes can occur quickly, though, with a strong management commitment and an unwavering and highly visible drive to improve. Tangible, measureable improvements will begin to appear within weeks of the employee group realising this is not the latest version of a safety programme, that this is who the organisation intends to be. The most difficult step will be convincing employees you are serious. Once that is accomplished, your efforts will become substantially easier.

Update on Buncefield recommendations

It would be all too easy to specify a SIL3 rating for all overfill protection systems. This is unnecessary and risks missing the real lessons from Buncefield and other similar incidents. An analysis of the appropriate SIL rating per tank is necessary. More important is the need to separate the overfill sensor and the logic solver in an overfill protection system from the tank gauging system   The consequences from the series of explosions which took place on 11 December 2005 at the Buncefield oil storage depot in Hertfordshire, UK, continue to be felt more than six years after the event happened. In March 2012, a controlled explosion was carried out at the RAF Spadeadam test site in Cumbria, UK to try to understand the biggest blast in Europe’s peacetime history, which left the depot burning for four days. The theory now is that bushes and trees lining the site may have helped create a supersonic flame. However, if some lessons are still to be learned from Buncefield, others are extremely clear. Among them is the importance of level control and gauging for storage tanks: a lesson tragically reaffirmed by an explosion caused by overfilling in Bayamon, near San Juan, Puerto Rico in 2009.

Improving terminal operations while simplifying regulatory compliance reporting

Efficiency, cost control and enhanced visibility are more important than ever in today’s increasingly complex terminal environment. At the same time, marine terminal operators must operate in a challenging regulatory climate and support new and more rigorous expectations for industry best practices. There are two key requirements for meeting these objectives. The first is to have instant access to vessel information, including both current and historical locations and events. The second is that this information be more than simply ‘points on a map’, so that operators can use the data for business intelligence and analysis, and to improve operational efficiency, decision-making and reporting. Today’s enterprise-class terminal management offerings make this possible by delivering access to both real-time and historical vesseltracking information, and combining this information with integrated reporting, analysis and dock management tools. These systems also can be used to automate and enhance dock scheduling and activity logging, as well as other key processes and functions, while enabling operators to combine multiple, independent systems into a single, comprehensive and fully integrated solution. Integrated marine terminal management systems deliver benefits up and down the chain of command, from the dock operators and supervisors through senior corporate management. Each stakeholder has specific needs. For instance, at the corporate office, IT teams must ensure system compliance with security and risk mitigation practices. Chartering managers and schedules must connect with traders and identify available vessels while maintaining reliable schedules. Marine technical departments, superintendents and port captains also need the right data with which to investigate incidents and improve safety and security.

Hydrocarbon concerns: six key areas

There are many complexities of transporting and storing fuel. A weak link in the chain creates potential for disaster, so it’s vital not to only rely on point gas sensors but to consider the complete liquid phase leak detection system   1. Aboveground detection - Rapid detector response is essential. Some sensors can respond to liquid fuel spills within five seconds - Sensors and controllers are rated for hazardous area installations. (ATEX and/ or IEC EX approval).   2. Detection within rainwater outfalls - A critical consideration is the deployment of a sensor to detect thin layers of fuel on water and report this remotely to a control room - Monitoring the surface of rainwater accumulations before the storm water is discharged can prevent environmental infractions and punitive fines.

Optimising inspections

Storage tank inspection is required to ensure a tank continues to be fit for purpose and does not present a risk to the product stored, personnel or the environment. Some of this inspection can be carried out with the tank in service, such as tank shell corrosion measurement and visual inspection of the external surfaces. However, in order to inspect the tank floor it needs to be emptied, cleaned and entered. This means the cost of inspection is not only the manpower and equipment required, but also potential loss of income during the out of service time. Over the total lifetime of the tank, the out of service time is calculated as the number of times it needs to be inspected, multiplied by the time taken to perform each inspection. The time taken for each inspection can be reduced by good tank preparation, rapid gathering of corrosion measurements, quick report generation and repair decisions, and finally making any repairs necessary. The number of times a tank is inspected can be reduced if corrosion rates are low and a risk based inspection (RBI) programme is in place. Therefore recording of measurements for trending as part of an inspection can result in long-term cost savings by increasing the time between inspections.

What is an encapsulator agent?

Encapsulator technology is a tool developed during the late 1990s to control hydrocarbon spills. Since its inception, the technology has continued to be enhanced and has diversified in application and use. Encapsulator technology has been identified to be beneficial in applications such as spill control, confined space degassing, fire suppression, environmental remediation and odour control. Encapsulator agents have a large, amphipathic molecule with a polar head that is hydrophilic and a non-polar tail that is hydrophobic. As the encapsulator agent mixes with the water, it reduces the surface tension of the water, resulting in smaller droplets. The non-polar tail pulls the polar head to the surface of the water droplet due to its hydrophobic characteristics, allowing the polar heads to form a protective shell around the water droplet.

New marine terminal for hydrocarbon storage and distribution in the Port of Algeciras (Cádiz)

In December 2010, Ecolaire España S.A. (OHL Industrial Oil & Gas), a subsidiary company of OHL Industrial and integrated in OHL Group, was awarded the turnkey contract for the construction of a marine terminal in the Port of Algeciras (Cádiz). The Algeciras Terminal project was designed to fulfill two main objectives: to cover the fuel supply needs of ships in the Port of Algeciras and to offer increased environmental and safety guarantees for the surrounding population. This was the single largest terminal project ever undertaken in Spain. Its construction by OHL Industrial Oil & Gas included the development of all the detailed engineering, supply of materials and equipment, construction and installation, and commissioning and startup of the marine terminal.

Multiple ground improvement technologies for tank sites with variable soils

The Battleground Oil Specialty Terminal Company (BOSTCO), owned by Kinder Morgan Energy Partners (55%) and TransMontaigne Partners (45%), has approximately 185 acres of land and waterfront on the Houston Ship Channel in La Porte, Texas, US. The first phase of terminal construction, which began in December 2011, includes construction of 52 tanks with a combined capacity of 6.5 million barrels for residual fuel, feedstocks, distillates and other black oils. As is the case with any other aboveground storage tank (AST) project, the soil must first undergo a geotechnical investigation to determine if it can provide the required bearing capacity, and whether or not the tank will experience differential settlement which will threaten its integrity. What follows is the analysis and designbuild solution executed to improve the ground beneath 12 planned steel tanks; six of 110ft diameter and 60ft tall (100 series), and the other six of 155ft diameter and 60ft tall (200 series).

New measurement protocol becomes the norm for the Netherlands

Leak detection and repair (LDAR) programmes are becoming increasingly important when stepping up efforts to reduce hydrocarbon emissions. Not only do evaporating hydrocarbons represent a loss in revenue, reducing emissions also play a part in improving tank farm safety, as well as reducing the environmental impact. The main emission driving mechanisms from different tank designs are as follows:

Forge-ing joins at new temperatures

In recent years regulatory authorities have placed increased emphasis on maintaining the integrity of aboveground steel storage tanks (ASTs) to reduce incidents of loss of containment that result in offsite environmental impact. This regulatory focus has created increased need for AST fleet operators to identify and implement new, more cost-effective solutions for maintaining and improving AST reliability. This need to assure higher reliability has resulted in a growing industry trend to decommission and dismantle older tanks in poor condition and operate with a smaller but more reliable core tank fleet. To be effective, this operating strategy requires improvements in tank maintenance practices to assure each tank completes its scheduled run length between planned repair outages. This prerequisite need has created opportunity for development and implementation of alternate in-service repair methods that allow ASTs to remain in service between scheduled API-653 internal inspections, and minimise negative impact to plant operations.

Planning to avoid failure

Accidents involving storage tanks are unfortunately not as uncommon as people in the industry would like. The oldest and most significant event occurred in January 1919 at an alcohol factory in Boston, US1 when a tank exploded and dumped 9.5 million gallons of molasses. In January 2005 an occurrence in Buncefield2, UK saw a 22 tank storage park for jet fuel completely destroyed by fire. More recently, in Venezuela last year 3, a storage tank farm was also wiped out by fire. An overall look at past incidents shows that events occurred via different causes, marked by a string of major accidents. These accidents combined spurred the US community to create regulations and standards such as API 653, which seek to ensure co-existence with these facilities.

Integrating security into automation

In today’s hectic world, terminal managers face many challenges and most of those do not deal with the loading and unloading of product. Compliance with local, state and federal requirements around emissions, both physical and cyber security, as well as the normal business objective of operational efficiency and zero incidents are all issues that affect terminal management. However, these issues and product loading are inherently linked and terminal operators need to look for solutions that take them on in an integrated approach. In particular, as terminal operations become increasingly automated, it is important that those systems incorporate not only elements that ensure efficient and accurate product loading but also ensure the physical and digital security of the facility. These will all drive towards the ultimate goal of the right carrier receiving a full load with the correct product each and every time.