Oil supply expected to grow faster than demand
Analysis shows that oil markets have gradually been tightening over the last two years while the outlook indicates a possible inflection point early 2015 and an increasing downward pressure on oil prices for the coming two-to-three years. The recent geopolitical outages of oil production from the Middle East and North Africa has until now been perfectly balanced by the increased supply of unconventional tight oil from the US. This predicted easing of the oil markets is partly driven by an assumption of gradual return over the next two years of oil from Libya, Iran, Iraq and Sudan, while US drillers are continuing their activities with unchanged intensity and increased efficiency.
Speedy, specialised and flexible
With a total storage capacity of 106,630m3 consisting of 96 tanks ranging from 100m3 to 5,500m3, family-owned storage operator Verbeke provides an alternative to the massive storage facilities in the port of Antwerp. ‘Our organisation is fast and flexible in every possible way, so we can respond quickly to our customers,’ explains the company’s owner Ryan Verbeke. The site is located deep inland between Antwerp and Brussels at a crossroads of roads and waterways. In addition, the Scheldt river serves as a direct connection to the sea, so customers do not have to pay port fees.
Tepsa expands chemical handling capabilities and hub services
Earlier this year Spanish terminal operator Tepsa took part in the first simulation of a spillage of chemical substances into the waters of the Port of Barcelona. The Muelle de la Energía was the stage for a simulation that outlined the spillage of a solvent product, while the chemical tanker White Lady, docked at Tepsa terminal, was being unloaded. This is the first exercise with this kind of product carried out in the Port of Barcelona. The drill involved the activation of the Port of Barcelona and Tepsa’s Internal Maritime Plan, as well as the Self-Protection Plan at alert stage.
TanQuid focuses on chemicals for future growth
Germany’s market leading independent terminal operator TanQuid has undergone many changes over the past seven years. Starting with its acquisition of Petroplus’ German tank farms in 2006, followed closely by the acquisition of IVG terminals in 2007 and culminating in the establishment of a joint venture with BP in 2012. Since then TanQuid has been focusing on establishing its core portfolio of tank farms. ‘We have divested those facilities which weren’t in line with the strategical fit and have integrated all our tank farms with harmonized business processes and standard automation software,’ explains Jens Moir, TanQuid’s CEO. Now the company’s focus has moved onto one of value preservation and growth. ‘We are happy with our 14 tank farms across Germany and Poland and will now look at how we can grow storage capacity on individual sites and further expand our portfolio of tank farms.’
The third REACH registration deadline is closer than most people think
The European REACH Regulation1 entered into force on 1 June 2007 and since then has tremendously impacted the chemical industry, not only in Europe but worldwide. With REACH an entirely new approach for managing chemicals was introduced in Europe, targeting to assess all chemicals on the EU market in relevant amounts (> 1 MT/a) by 1 June 2018. In 2007 it was estimated that approximately 30,000 chemicals relevant to the EU market would have to undergo such an assessment, i.e. having to be registered under REACH by all manufacturers and importers using these substances in amounts of 1 MT/a and more. By April 2014 approximately 12,400 unique substances were registered by industry, resulting in approximately 48,000 registrations (on average four registrations per substance). When looking at the numbers, there are only four years left for roughly 18,000 substances to become registered – an ambitious goal to achieve.
Chemical industries exit recession, but concerns mount over increasing competition
chemical industry is slowly exiting the global economic recession. However, despite expected marginal growth, concerns are mounting for industry leaders, who face increasing competition, feedstock cost disadvantages, a difficult business climate and aging infrastructure. German chemical industry executives are concerned about the potential loss of business to more competitive regions, but, in general, they still have a slightly more optimistic outlook than the rest of European chemical operators, according to John Page, vice president of consulting at IHS Chemical. ‘This optimism is largely because the German economy is one of the strongest economies in the region,’ he says. ‘Germany has a much larger and more robust manufacturing base than the rest of Europe, and their facilities are more up-to-date from a technology standpoint, than the rest of Europe. Most companies expect the German chemical business to pick up in the coming months, in part due to increasing domestic demand. ‘IHS Chemical forecasts an overall increase in German chemical production of 2% for 2014, so we are talking about sluggish growth here, but it is growth,’ Page says. ‘German chemical prices are likely to drop slightly, by about 0.5% but we expect chemical sales to rise to €191 billion in 2014. Despite an expected increase in domestic demand for chemicals, however, very little is going to change in the foreseeable future regarding the German chemical exports.’
Terminal life management
Inspection programmes for a storage facility should not only cover the storage tanks themselves, but also the many metres of connection piping and feed lines from loading facilities. Until recently inspection of these pipe runs was typically carried out under the API 570 Piping Inspection Code, which is primarily aimed at pipe work within the petroleum refining and chemical process industries. Whilst API 570 will ensure safe operation within terminals, it is somewhat more stringent than necessary as it covers pipe that may operate at higher temperatures and pressures, and be subject to more aggressive internal processes. API recognised this and in 2011 released the new standard API 2611 specifically for inspection of terminal pipe work operating up to maximum 300 psi at ambient temperature. For terminal pipe the main degradation comes from pipe wall loss due to corrosion and erosion. Erosion typically occurs at bends and injection points and hence its location is generally predictable, but corrosion can be random in nature occurring anywhere within the pipe, although ‘hot spots’ can be identified such as deadlegs and injection points. A key element in the inspection is therefore measurement of the wall thickness through a combination of NDE methods such as visual inspection, ultrasonic, eddy current, long range (guided wave) ultrasonic and x-ray profiling. One of the most important decisions in an effective inspection plan is the choice of thickness measurement locations (TMLs). As API 570 section 5.5.3 states: ‘In reality corrosion is never uniform, so additional TMLs may be required. Inspectors must use their knowledge of the process unit to optimise the TML selection for each circuit, balancing the effort of collecting data with the benefits derived by the data’.
Different options for degassing
Antwerp-based chemical service provider AQ specialises in renting out materials for various purposes, including shipto- ship transfer. Its services include: • Off-spec treatment Using mobile units the company is able to react quickly to worldwide problems with off-spec batches aboard tankers, land-based tanks, tank trucks, etc. • Equipment rental Hoses, fenders, reducers, etc. • Cryogenic equipment a) Purging b) Degassing • Hose / pipeline test service Testing hoses on an annual basis is mandatory. AQ is SIR-certified (Stichting Industriële Reiniging [Industrial Cleaning Foundation]), which means that the company is the qualified inspectors in its field. This guarantees a watertight test service that thoroughly scrutinises and analyses the quality of your equipment.
Vopak grows South African terminal
The demand for liquid bulk storage in South Africa has shown steady growth over the past few years and now Vopak, together with its joint local venture partner, Reatile, is capitalising on this by expanding its terminal in Durban, South Africa. The partnership is building an additional 64,000m3 , which will be commissioned in Q2 2015. The tank farm’s current capacity is 121,549m3, comprising of 141 tanks used to store petroleum products, chemicals and oleochemicals. This new capacity will be for petroleum products. ‘The South African fuels market is growing so we are increasingly facilitating the import of clean petroleum products such as diesel and petrol,’ Erik Kleine, MD of Vopak South Africa, explains.
Sub-Saharan Africa: Land of opportunity but huge challenges lie ahead
‘Sub-Saharan Africa is showing some of the biggest growth in oil consumption in the world,’ says Stanislas Drochon, director, Africa Oil & Gas at IHS Global. ‘Consumption of the main products, such as gasoil, petrol, fuel oil, jet fuel, LPG and kerosene, was roughly 1 million bpd in 2000 and last year it was close to 1.85 million bpd. So that’s an average growth of 4.3% per annum since 2000. If you exclude South Africa, which is a more mature market, annual growth has averaged 5.4%.’ A growing population, an expanding economy, and a growing middle class, as well as the continent’s mining and power sectors, are all key drivers for this demand growth, he says. Though refineries exist in sub-Saharan Africa, their capacities are generally small and utilisation is low. So much of this oil products consumption has to be met by imports.
Morocco moves to expand its oil storage
Morocco is heavily dependent on external sources for the vast majority of its energy needs, importing up to 95% of its energy supplies. The country produces marginal volumes of crude oil - some 500 bpd, according to data from the US Energy Information Administration (EIA) - while domestic production of key refined oil products needs to be heavily supplemented by sizeable import volumes. Meanwhile, Morocco’s energy demand is growing strongly, driven by demographic expansion and economic development supported by major industrial projects and international investments. Oil consumption last year was an estimated 209,000 bpd, up from an estimated 206,200 bpd the previous year, but down on 2011’s 240,000 bpd, data from the EIA show. Crude imports (including lease condensate) were 107,000 bpd in 2011 (latest data available) while imports of motor petrol, gasoil, aviation fuels, LPG and ethane totalled 117,000 bpd in 2011, according to the EIA which bases its oil trade figures on International Energy Agency data.
When two become one
In April this year Koole Transport completed the acquisition of Westway Group’s four remaining bulk liquid terminals in Europe, located in the UK, Poland, Amsterdam and the Netherlands. Both companies are now owned by EQT Infrastructure fund. Explaining the reasons behind this decision, van Holst says: ‘Koole Tanktransport has a terminal in Pernis, Nijmegen and Zaandam and is a very big player in the ARA region. ‘Amsterdam is an overflow port for Rotterdam for non hazardous products, so we always need to be flexible and strongly focused on the customer. Now that we have merged with this Rotterdam-based company, we have a footprint there to transport products to our terminal in Amsterdam.
Gulf Petrochem expands its storage horizons
UAE headquartered Gulf Petrochem Group opened the first phase of its new oil terminal in Fujairah in February 2013 and will start up a new terminal in Pipavav in southern Gujarat, India later this year, marking the next period of growth for the organisation. The group is also evaluating opportunities for a suitable location for a new oil storage project in Malaysia, as well at other locations in Asia and Africa, as a key part of its strategic growth plans for its storage business. With a storage capacity of 412,000m3 across 17 tanks, the first phase of Gulf Petrochem’s Fujairah Oil Terminal is able to handle class 3 petroleum products such as fuel oil and gas oil. Thangapandian Srinivasalu, executive director, Gulf Petrochem, says most of the tankage is filled.
LNG: Fuel of the future
If the 20th century was powered by oil, then the 21st is the century of gas. Not only is a lot of gas being found, be it giant fields in the deepwaters off East Africa or America’s shale gas boom, but the regulatory mood is all in favour of this clean-burning fuel. Its environmental credentials are impressive compared to oil or coal: America’s switch to cheap gas, for example, has helped this former carbon black sheep make a serious dent in its carbon emissions, with more to come after the Obama administration pledged in June 2014 to cut carbon emissions from the power sector by 30% below 2005 levels by 2030. It is not just power generation companies that are turning to gas. The transportation sector – which globally accounts for about 13% of all carbon emissions, although more in the West, accounting for 25% of emissions in the EU and 28% in the US – is also weaning itself off its dirty oil habit and turning instead to alternative, cleaner burning fuels like liquefied natural gas (LNG). The maritime industry 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 it is a fast growing polluter, prompting the International Maritime Organisation to ratchet down the permitted levels of sulphur oxide, nitrogen oxide, carbon dioxide and particle emissions in designated Emission Control Areas (ECAs) in North America, the Baltic Sea, North Sea and US/Caribbean area. The need to remain compliant with IMO regulations will increasingly inform shipowner decisions when it comes to fleet renewal and expansion.
TURKEY: a risky investment or still a strategic decision?
The strategic importance of Turkey as an energy-bridge between east and west continues to be underscored by recent events hundreds of miles away. Look to the north, and the crisis in Ukraine has not only heightened Europe’s awareness of Turkey’s strategic role as a transit route for Caspian gas, but it has also prompted warmer relations between Moscow and Ankara: after all, Turkey is Gazprom’s second biggest foreign gas customer after Germany, dependent on the Russian gas giant for 60% of its gas supplies. Turkey wants to keep getting that gas at the right price, and Gazprom, aware of the EU campaign to lessen its dependence on fickle Russian gas supplies, is keen to keep selling it: in April 2014 Russia and Turkey agreed to look into upgrading the capacity of the $3.5 billion (€2.6 billion) 1,200km Blue Stream pipeline, which ships gas from Russia to Turkey via the Black Sea, from 16 billion m3 per year to 19 billion m3 per year. And then look to the east, where, in an alliance that would once have been unthinkable given historic tensions, Turkey is the end destination of a new pipeline that links the oilfields of Kurdistan to world markets. It is almost 10 years since Norway’s DNO spudded the first oil well in the newly created autonomous region of Kurdistan in northern Iraq. A decade on and Erbil, the regional capital, is an oil boom town, with luxury hotels, high end malls, top of the range Range Rovers and western oil men jetting into Erbil International Airport. International oil companies including Genel Energy, Afren and Gulf Keystone Petroleum of the UK, Hess Corporation and Marathon Oil from the US, Talisman Energy from Canada, MOL of Hungary and Korea National Oil Co are all positioned in a region where strike rates are north of 70% compared to an industry average closer to 25% and discoveries can be measured in the billions of barrels. At the time of writing, with Islamist militants taking control of key Iraqi cities triggering fears about disruption to the 3.5 million bpd being pumped from Iraq, Kurdistan’s oil riches look more valuable – and vulnerable – than before.
Sealed bearing prevents valves from malfunctioning
Bearing failures are the highest root cause of failure in triple offset butterfly valves (TOVs). This issue can be directly attributed to the need to have metal bearings with very tight tolerances when accepting the shaft diameter. Properly designed TOV’s are metal to metal torque seated valves. Therefore, very little shaft deflection can be tolerated in order to properly torque the seal ring into the seat. Additionally, properly designed TOV’s should have the bearings located as close as possible to the centre line of the disc, which helps to deliver a rigid support of the shaft when torqueing into the seat. In clean services, such as air or water, the chances of the bearings fouling are small. However, in the world of petrochemicals there are many potential problems with bearing failures. Many of these problematic situations are obvious, such as sulphur tail gas and acid gas services within refineries and gas processing plants. Sulphur in its gas state will have a phase change to a solid in temperatures below 115°C. If the gas phase sulphur is trapped in the bearing cavities and there is a drop in the temperature, the sulphur will become a solid. This causes bearing to shaft seizure, locking the disc in one position. When this situation occurs, the end user must apply a heat gun of some sort in order to unlock the valve. This procedure is not the best practice when operating a modern process facility. Most TOV manufacturers offer a welded-on steam jacket in order to use the steam’s latent heat to deliver heat to the bearing area. While this is good design practice, human error has negated this benefit when plant personnel simply turn off the steam to the jacket or unhook the connections to perform some maintenance and do not reconnect the steam to the fittings. In addition, every turnaround of a processing plant can be dangerous if media is still in the bearing cavity and that cavity is not the right temperature. Other chemical applications such as butadiene and styrene have the same issues as described, except when these chemicals become trapped and dormant it causes a phase change and popcorn, or polymerise, resulting in seizing of the bearings.
Whatever the weather
A major liquids pipeline trunk line company operating in the northern border States of the US and Canada reported a severe operational problem with its double block and bleed plug valves. Due to very low operating temperatures in the winter months (Montana in the winter is extremely cold) ice developed in the lower trunion area of the valves. The valve design uses a plug with a bottom trunion that must fully travel within a trunion support pocket upon closure. As this area is a collection point for dirt, debris or, in this case, liquids with a higher specific gravity than the flowing hydrocarbons (water), this area essentially acts as a trap. In cold weather the trapped water forms ice and thus prevented free movement of these valves. The operators attempted to remediate this by installing heat tracing but this proved ineffective. This problem was consistent over several years. In 2010 the company installed an Omni (Omniseal) DB&B plug valve similar to what was already in service but with one major design difference. On the Omniseal valve the design is such that the bottom trunion is inverted and projects up and through the plug itself. Any ice accumulation will be pushed up into the flow stream rather than compressed and trapped into the trunion pocket.
Alleviating the challenges of Type B inspections
Internal floating roofs (IFR) require routine inspections as mandated by the Code of Federal Regulations 40 CFR 65.43. Tank owner/ operators are to perform visual inspections for IFR Type A failures annually. These inspections are conducted from the manways and do not require tank entry. IFR Type A failures include: • IFR not resting on the surface of product or leg supports • Product on the surface of IFR • Holes, tears or other openings in seal or seal fabric • Visible gaps between the seal and tank wall.
Extending inspection intervals
Inspections of aboveground storage tanks (ASTs) have traditionally been performed in accordance with time and condition (TNC)-based inspection intervals. This approach is acceptable, but it can mean unnecessary expense when inspecting low risk ASTs in benign service with no indications of damage. Based on an evaluation of damage mechanisms, such as metal loss due to corrosion, a more applicable and relevant inspection method may allow for less frequent inspections. A logical, useful result of a risk based inspection (RBI) programme provides the user with a prioritised and fully customised inspection schedule for an asset, or group of assets. The RBI approach is largely influenced by health and safety (H&S), environmental, and economic factors. Industry standards -- including API Recommended Practice (RP) 580, Risk Based Inspection, and API RP 581, Risk Based Inspection Technology – provide guidance on applying a qualitative or quantitative approach to establishing an RBI programme. An RBI programme provides for a risk analysis of each AST, or facility. Every operation and activity involves some level of risk, and the level of risk must be evaluated as acceptable or unacceptable. If the level of risk is deemed unacceptable, changes must be made to operations or inspection activities to mitigate the risk.
Automating terminal operations
Vopak, like any terminal, stores, manages and handles multiple products owned by multiple customers. Physical terminal processes encompass (un)loading of trucks, barges, ships and trains, terminal internal transports and stock keeping. These physical processes must be conducted in compliance with a customer’s requirements and according to planning that takes into account tight administrative processes such as pipeline administration, stock management, and scheduling. This results in strict requirements for the administrative processes and the need for automation. The challenge in this environment then becomes the linkage between physical and administrative processes and associated data in a way that safety, process integrity and efficiency are optimised. Terminals today operate in one of the following modes: • (Remote) manual – Operators manipulate field equipment remotely from the central control room (CCR) or locally, based on manual procedures and instructions • Automated – The physical process execution is automated and the control system automatically controls field equipment for conducting product movements • Integrated – The physical and administrative processes are tightly coupled, and information flows automatically between customers and operations in the field. The (remote) manual operational mode in practice in today’s terminal industry, but it is sensitive for operational errors when applied at larger terminals, potentially leading to safety and process integrity risks.
The environment isn't the only beneficiary from plugging leaks with an IFR
Global warning is happening. According to the World Meteorological Organisation, every year from 1986 to 2013 has seen annual average global land and ocean surface temperatures above the 1961–1990 average. The evidence is clear to see. Canada was once covered by the Laurentide ice sheet, but scientists have confirmed that the ice is melting at twice the rate it was 50 years ago, and this is true also of the ice sheets in Antarctica and Greenland. The early arrival of the seasons has visibly occurred within people’s lifetimes, as witnessed through the flowering of plants. The majority of people and governments attribute global warning to the effects of industrialisation and the discharge of carbon dioxide, methane, ethane and other volatile organic compounds (VOC) into the atmosphere. A minority denies this and believes it is caused by external factors operating on the natural climatic system such as volcanic eruptions, solar activity and velocity variations in the orbit of the Earth around Sun, which have, over tens of thousands of years, led to the heating and cooling of the Earth’s atmosphere. Let the protagonists debate it. The pragmatists must take action. Global warming is not good for human life and, whatever the reasons, the petroleum industry amongst others has a duty to minimise its effect and slow it down. Also, VOCs are injurious to the health of employees, and most national environmental agencies have regulatory frameworks inflicting heavy financial penalties for breaches of emission discharge licenses.
Solutions to contain VOC emissions and comply with evolving EPA regulations
Terminal operators, oil and gas transportation and transfer companies are all seeking the most efficient and costeffective method to control the emission of volatile organic compounds (VOCs) that are sometimes released into the atmosphere from a tank as a result of loading and unloading operations. Because VOCs can represent a health and environmental hazard, and because their emission is strictly regulated, it is imperative to prevent their release. In August 2013, the EPA issued an update to its 2012 New Source Performance Standards for those producers that have tanks that are each emitting more than 6 tonnes of VOCs per year. This update has led many operators to re-evaluate their methods for controlling VOC emissions, while had to quickly implement a solution to comply with this new regulation, 40 CFR Part 60, by April 2014. This demands a reduction of 95% of uncontrolled emissions.