Tank Storage Magazine v09 i06


Volume: 9
Issue: 6
Date Published: November 18, 2013



Ineos claims victory at the Battle of Grangemouth

‘The petrochemical business at Grangemouth has reached a crossroads. Unless we reform our cost base and secure new gas raw materials the site will close’   Shockwaves were sent through the heart of the UK fuelling industry when Ineos Petrochemicals UK chairman Calum MacLean released this statement on 19 September, followed by a white-knuckle ride of complicated events which prompted a union reaction and much speculation as to how the plant’s closure might also signal the demise of the giant refinery, Scotland’s only crude oil facility, adjacent to it. The Grangemouth row began after an internal investigation into the conduct of Unite union convener and Labour Party chairman of Falkirk Stephen Deans, who worked at Grangemouth for 24 years, was launched in September. Unite called for industrial action in response to what they deemed to be unfair treatment of Deans, with 81.4% of members saying yes to a strike on a turnout of 86%.

New name, old faces

Epic Midstream may be a new name to the storage market, but its team are certainly not lacking in experience. Made up of people with extensive experience gained from working at the likes of Kinder Morgan, BORCO, Vopak, Marathon Oil, First Reserve and Nustar, the midstream investment platform is keen to make its mark. Last year Blue Water Energy and White Deer Energy formed a partnership to acquire a 100% interest in five refined product storage terminals located across Georgia and Alabama in southern US. Epic Midstream now has $200 million (€149 million) equity allocated and is focused on growing its existing facilities while acquiring and enhancing petroleum and chemical storage and handling assets serving North America. ‘There is plenty of room for investment in this market,’

Construction starts at northeast Asia oil hub

Building work officially began on 27 November to create what is to become the ‘oil hub of northeast Asia’ in Korea. The Port of Ulsan is already home to some 21 million barrels of storage capacity, but this is set to increase by an additional 18.5 million barrels. ‘By 2020 our storage capacity will be as large as that in Singapore,’ Park Jongrok, president of the Ulsan Port Authority (UPA) says.

'Greater Singapore' to become the new storage hub

Despite backwardation, storage capacity in Asia just keeps on growing   Demand for additional storage terminal capacity continues to grow in southeast Asia, driven by growing domestic fuel requirements and the rising volume of strategic petroleum supplies being stored in Singapore and nearby locations. Despite current backwardation in the petroleum market, storage capacity availability remains tight in Singapore and neighbouring countries. Although a decision by several Japanese trading houses to give up rented tank storage capacity in Singapore created business press headlines earlier this year, industry sources say the vacated tanks were quickly snapped up by other traders as early signs begin to appear that overall fuel demand is starting to pick up again. Growing refining capacity in China, India and the Middle East is another factor boosting liquid storage requirements. China’s two top oil and gas companies Sinopec and PetroChina, for example, were both given larger diesel and petrol export quotas this year by the Ministry of Commerce.

On the rise

Imports, refining capacity and GDP are all growing in China, leading to a multitude of opportunities for storage operators all across the country   Demand for third party liquid storage capacity has grown quickly in China’s coastal provinces over the past decade, driven by the nation’s expanding chemicals market and rising consumption of imported chemicals. China’s rising diesel and petrol exports also offer global traders and storage tank operators an opportunity to enter the mainland market. Local mainland investors are also building new storage capacity to serve their expanding domestic customer base. Some are newcomers to the terminal sector, viewing storage terminals as an attractive business diversification opportunity.

Taizhou, Shell and the 'doomed' refinery

The Chinese government’s decision to cancel a 400 million barrel per day (bpd) refinery project in Taizhou will have ‘far-reaching consequences’ for the Asia-Pacific refining industry’s future growth potential, according to research and consulting firm GlobalData. Jeffrey Kerr, GlobalData’s managing analyst for downstream oil and gas, believes the decision to cancel the project, which was to cost Shell, Qatar Petroleum (QP) and China National Petroleum (CNPC) upwards of $13 billion (€9.5 billion) to develop, has led to a high level of uncertainty surrounding the fate of many future projects in the region. Some confusion has arisen as a result of Kerr’s analysis however, as Shell insists the project is still undergoing a feasibility study and a specific site has not even been selected as yet. The last official news Shell released on the project was back in 2008. Since then both Shell and QP seem to have gone quiet on the subject. There are a number of reasons why such a cancellation could have happened, though at this stage it still amounts to mere speculation as none of the companies involved offered an explanation as to why Kerr’s press release was given so much attention. QP and CNPC could not be contacted, and Shell senior spokesman Jonathan French confirmed there has been no formal information from the company on the project for around four years.

Intermodal imbroglio

Rail failures in 2013 instigated emergency actions and higher scrutiny from the US and Canadian government, while a new study says pipelines are safer and more reliable. So why are new pipeline projects still being delayed?   North American oil booms have popped up in places with virtually no refining infrastructure or marketplace, and truck and rail have been placed under enormous pressure to transport crude to coastal energy manufacturing and distribution centres. Advocates of pipeline expansion have had a series of recent episodes to argue that rail is beginning to crack under the pressure of this growth in bulk freight shipments. The Association of American Railroads says crude oil shipments increased 443% in the US between 2005 and 2012. In just one year, carloads of crude oil increased from approximately 65,600 in 2011 to approximately 257,450 in 2012. Can rail handle moving hundreds of millions of tonnes of crude and refined products per year? Uncertainty was renewed in October when a train carrying crude oil and LPG derailed in Alberta, Canada, causing an explosion and fire. Luckily no one was injured, but the accident aggravated a tense situation started by the July tragedy in Lac-Megantic, Quebec, when a runaway train carrying crude products exploded in the centre of the town, killing 47 people.

Safety fast

With the current shale oil boom across North America, ‘safety fast’ really is the best way to describe the ultimate goal of the crude by rail industry   In 2012 alone, crude movement by rail more than doubled and in, the last four years, has increased more than 30-fold. Based on Q1/Q2 data for 2013, and the newly developing shale plays, this growth is expected to continue. There are around 150,000 miles of freight rail in the US alone (about three times more than the US Interstate highway system) which provide all types of rail service to millions of customers across North America. Rail infrastructure in particular has benefitted from the recent demand created by the Environmental Protection Agency’s (EPA) ethanol renewable fuel standards (RFS). Given the relatively low volumes of ethanol demanded by RFS requirements (when compared to petrol throughput volumes), and the difficulties of distributing ethanol via traditional pipelines, many terminals and refineries had no option to meet government regulations except by truck and rail. In the last decade, favourable rail economics has driven major rail construction at refineries and terminals across the US. While the regulatory requirement for renewable fuels may increase with RFS2, the surge in ethanol use has already resulted in many refineries and independent marketing terminals gaining easy access to rail. Now with the oil shale boom, energy-related rail traffic increases even more drastically. Most of the shale plays are in areas not traditionally associated with crude drilling, so they lack the pipelines and gathering systems that would otherwise help these producers to quickly grow their assets. The Bakken and Niobrara plays have a good backbone of rail service, but relatively little pipeline capacity. The Marcellus and Utica plays are in heavilypopulated areas that make laying pipeline more time consuming and costly.

Taking overfill prevention to the next level

Still using old mechanical pointlevel gauges for overfill prevention? Technology has changed and there are safer, more efficient options available today. The new API 2350 overfill prevention standard combined with IEC 61508 (SIL)- certified continuous level measurement also for the HiHialarm, is the way forward to meet current and future safety requirements   Nowadays petroleum tank spills are major news that can easily escalate from local media to regional and global publicity. The Buncefield overfill accident, which caused Europe’s largest vapour cloud since the Second World War, is by far the most famous example. But new incidents are continuously occurring and there are several examples of terminals that have gone bankrupt due to oil spills. Safety is becoming increasingly important and the underlying driver is clear: a gradual reduction in acceptable societal risk throughout the entire world. The same trend also applies to tank farms and bulk liquid storage facilities where it is driving development of new technologies, standards and best practices towards safer options. Overfill prevention is important due to numerous reasons. Human safety, environmental protection, public relations, clean-up costs and indirect effects such as down-time are pretty obvious. Maybe less obvious is, by better knowing what is in the tank, the insurance cost can be reduced, while simultaneously improving the operational efficiency due to increased tank utilisation and higher transfer rates, for example. Often petroleum products with high volatility and flammability are stored. Mix an ignition source with the right amount of air and the combination can cause a vapour cloud explosion, which is exactly what happened at Buncefield. Besides causing considerable damage to surrounding tanks and nearby assets, vapour cloud explosions are also a realistic and serious safety concern for the on site employees.

Ragworm makes waves in the US

The Netherlands-based company Ragworm has set new records by cutting out the entire bottom of a 70m tank into 6m x 2m plates in 100 cutting hours, despite the fact that 50% of the tank was double plated. Two 55,000 psi jet edge-powered Ragworm waterjet cutting systems were used to complete the project. The Ragworm is a patented robotic waterjet system manufactured by Jet Set Hydro Technics. It uses dual ultra-high pressure abrasive waterjets to strip tank walls from their old floors and roofs without the risk of explosion or creating toxic fumes associated with traditional cutting methods such as oxyacetylene torches. Named after a baitworm that lives on the ocean floor, the Ragworm crawls along the bottom of the tank and cuts away sheet after sheet of steel plate. It can also ride along the side of the tank and separate the walls from the floor.

Cutting emissions from 174 to just 2.2 tonnes/year

Oil vapour emissions (OVE) have harmful effects on people and the environment, so selecting a proper internal floating roof to seal up the vapour space to reduce unnecessary loss is critical. One of the internal floating roofs that have been extensively used in oil storage tanks are metallic internal floating roofs on floats (also known as float tube type). Its deck is above the liquid, supported by closed pontoon compartments for buoyancy and typically constructed of aluminum alloy or stainless steel. This kind of internal floating roof is easy to construct, but it has some drawbacks: • Not in full contact with the liquid surface, resulting in multiple vapour spaces • Great quantities of vapourisation are unstoppable • Float units are separated so it is easy to cause fluctuation while oil filling or draining • The deck may deform as the thickness is often too thin • Short lifespan.

Silicone-free sealing

Atreus Deck and Dome, a business unit of the Austriabased industrial service provider, Kremsmueller Group, has been awarded a contract for the design, manufacture and supply of nine aluminium dome (ADRs) and internal floating roofs (IFRs) for the Socar Aurora Terminal in Fujairah, UAE. Belleli Energy was the EPC contractor for the second extension phase of the terminal. This multi-purpose product terminal is a joint venture between the state oil company of Azerbaijan and Swiss trading house Aurora. It was the first project to be carried out at Kremsmueller’s new manufacturing shop in Turkey, which is dedicated to the manufacturing of Atreus products.

ATEX 0 certified pumps in demand

The challenge of safely and economically dealing with rainwater and petrochemical spills in ATEX Zone 0 areas is growing, as more stringent monitoring controls come into place for tank storage terminals, particularly in European countries. Certain ATEX Zone I areas within these terminals have been redefined as ATEX Zone 0 areas, requiring a risk assessment review but also providing an opportunity for pump manufacturers. Crane Process Flow Technologies in Germany is reporting an increasing number of enquiries for its DEPA Air Operated Double Diaphragm (AODD) pumps which are certified for ATEX Zone 0 use by Physikalisch- Technische Bundesanstalt, Germany. The pumps, which can be air or nitrogen powered, eliminating the requirement for monitoring control systems, are proving particularly suitable for tank storage terminals.

Shunts or by-pass conductors... or both?

In 2009, along with the new Recommended Practice API 545, came the requirement for by-pass conductors between an external floating roof (EFR) and tank shell. This is in addition to, and supplements, the historical requirement for shunts. However, operators repeatedly ask: ‘Do we need both shunts and by-pass conductors?’ The answer is: ‘Yes’. The reason both are needed may be found in the signature components of a lightning strike. There are two distinctly different components, however the drawings typically referenced to represent those components, may be part of the problem in understanding why both shunts and by-pass conductors are required.

Ensuring contaminationfree fuel

The same fuel contamination problems found in on-engine fuel systems also create problems in storage and dispensing facilities. Fuel problems can be caused by water, dirt, asphaltenes and cold weather if the storage is outside and aboveground. No matter how carefully it is handled, contaminants will find their way into fuel during transfer and storage. Water is a diesel engine’s number one enemy and condenses directly from the air inside the storage tank during normal daily heating and cooling cycles. In addition to water, solid and semi-solid (microbiological) particulate contamination is prevalent.

Innovative solutions for oil terminals

Centrifugal pumps have long been the primary equipment of choice to move fluids in and out of oil terminals, tank farms and bulk storage facilities. The use of centrifugal pumps stems primarily from their general suitability, widespread familiarity and low price. Yet the adoption of positive displacement pumps continues to increase in this application because of market trends that require operators to handle multiple fluid types, an ever-growing need for speed-of-transfer, better inventory management and increase site profitability. It is important to remember storage is not the objective of the terminal or tank farm manager; rather, it is the timely delivery of a stored product. A centrifugal pump transits velocity to a fluid. As the fluid passes through a precisely designed vane passage it converts the velocity into pressure (a kinetic energy machine). Most centrifugal pump impeller vanes are designed for water performance as its basis; standard correction factors are applied to account for varying viscosities.

Failing to plan is planning to...

Management consulting firm Systems Navigator gives a fictional example of how it is possible to evaluate over 30 different scenarios in order to find the optimal terminal design before beginning construction. The company uses simulation modeling to minimise construction costs, while ensuring a high level of service to terminal customers. Using this method the company is able to get a clearer idea of just how much investment would be needed to operate the waterside operations of one particular terminal. Major cost savings can be achieved by minimising the number of berths per construction phase and by minimising the dredging requirements.