Tank Storage Magazine v10 i05


Volume: 10
Issue: 5
Date Published: September 5, 2014



ARA tank storage markets: more pain to come?

Consultant PJK International summarises how changes in the global oil markets are impacting profitability for tank terminal operators

Topsafe to expand in China

Topsafe, a third party logistics service provider, owns and operates a petrochemical storage facility in Guangdong province, south China. The site is located at Humen Port Lisha Island Petrochemical Base in the central region of The Pan Pearl River Delta, where approximately one tenth of China’s GDP is generated annually. The current facility has 320,000m3 capacity in 122 tanks and a jetty of 50,000 dwt. It serves customers in south China as well as across the Asia Pacific and its throughput exceeds 3 million tonnes a year. To cater for China’s economic development Topsafe has been growing its terminal since 2007. Last year, as part of phase two, it added 16 tanks and took control of 15% of the jetty from Humen Port Group to better serve its customers. The terminal’s location serves as an entry point from the Middle East, with at least 15 other terminals in the vicinity. To keep up with demand, phase three will add 140,000m3 in 2016 to take the facility to a total of 460,000m3. Topsafe will also build a new jetty of 80,000 dwt.

Slight slowdown but overall positivity

The long awaited Pengerang Independent Terminals facility, located at the southern tip of Peninsular Malaysia’s Johor State, has now started operations. Built as a joint venture by Malaysia’s Dialog Group Berhad, Royal Vopak and Johor state government, Pengerang terminal is the first independent crude oil terminal to open in southeast Asia. Plans to build and operate the terminal have been triggered by growing crude oil and petroleum product import flows into Asia and Australia. Phase one (a) of the terminal was commissioned in April, offering storage capacity of 432,000m3 for clean petroleum products. The terminal’s capacity will be expanded to almost 1.3 million m3 when the first phase of Pengerang is fully commissioned early next year.

Third party terminal market enters new expansion phase

The storage terminal sector has seen a number of new developments lately, reflecting China’s fast economic development over the past decade. With suitable locations for terminals increasingly difficult to find in east China, in the Shanghai area in particular, international terminal operators are looking elsewhere. South China, especially Guangdong and Fujian provinces, is attracting a number of foreign terminal operators. Others are also looking in northern China, where the expanding petrochemical sector is creating growing demand for tank storage facilities to support the region’s industrial development. ‘Petroleum and chemical demand is increasing in China but there is a low growth rate because the domestic and export markets are slow. Demand growth is about 5% lower than GDP for refined products and chemicals,’ explains Katrina Chen, consulting director for oil and gas at ICIS China.

Australia ups storage capacity in the wake of refinery closures

The new Pelican Point storage facility was opened on 30 April 2014 at Port Adelaide. It represents a 50% increase in the storage capacity of South Australia. The terminal is owned and currently operated by Terminals Pty and leased to Caltex. The facilities provide fuel to industry and local service stations and serves Australia’s growing transport, agricultural and mining fuel needs. It is the first large, modern, multiproduct terminal built since the Vopak Darwin terminal in 2005. Terminals Pty, Caltex and Flinders Ports have jointly invested AU$100 million (€70 million) in the project. Aurecon undertook the design of the facilities.

Shift work and fatigue - keeping it simple

This article uses the 2005 Buncefield explosion and fires’ incident as a springboard to consider some of the key practical factors that operations and HSSE managers, safety reps and others in the major hazard side of the tank storage industry should look for in managing shift work and fatigue. Why use Buncefield as an example again? There is always more to learn, and finding practical help is not always easy, despite (or perhaps because of) the multiple reports. Buncefield was unusually well investigated; many investigations do not adequately address fatigue issues. Looking more widely, whatever industry sector is involved, the same human beings work there. So they are affected in the same way by fatigue, whether from poorly designed or poorly controlled shift patterns1, or from excessive working hours and workload. The key message of this article is ‘Keep it simple’: design and manage shift patterns both to minimise fatigue and its effects, and to optimise manageability i.e. the ease with which any shift system can be run and worked, and its chosen shift pattern populated and managed in practice. A smooth-running shift system is good evidence that the shift pattern is reasonable. The depot operation was essentially simple. Three large pipelines delivered a range of fuels to the site. The smaller one was dedicated to the site and mainly sitecontrolled and operated; the other two were larger and faster, and mainly controlled from elsewhere. These two delivered fuels to other sites as well and so could be ‘on or off’ with respect to Buncefield.

Fuel terminal asset protection

With fuel terminals running with limited but efficient manning levels, fixed fire safety systems play a vital role in the overall emergency response plan. They have the dual advantage of attacking the fire at the earliest stage and allowing employees to maintain a safe distance between them and the incident. The local authority fire and rescue services are not bound to provide asset protection in itself. They may not have the foam or foam delivery equipment to deal with a major tank or bund fire which means that it is incumbent on the operator to consider their response level. As an example, a large fuel terminal in the Manchester area of the UK was mothballed a number of years ago. Fire protection specialist Hawkes Fire was asked to design and supply the foam proportioning & distribution devices that would re-instate and enhance the existing fire infrastructure already in place.

High thermal radiation from large ethanol fires

Experience from smaller fires, with an area of just a few square metres of liquid fuel, is that fuels containing a high proportion of alcohol, such as E85, radiate less heat. This, therefore, has less thermal effect on their surroundings compared to petroleum-based fires of fuels, such as petrol. However, the largescale tests that the SP Swedish Technical Research Institute performed in its Etankfire project show the circumstances are the opposite in the case of a fire the size of a fuel storage tank. The thermal radiation from ethanol fires is several times higher than that from petroleum fuels. Ethanol has a lower calorific value than, for example, petrol. This means complete combustion of ethanol releases much less energy (about 27MJ/ kg) than complete combustion of petrol (about 44MJ/kg). A natural result of this is that the thermal radiation from pool fires burning ethanol is less than that from similar fires of petrol, which is confirmed by test results from 2m² pool fires of fuels containing varying ethanol contents

Handling a stormy situation

Pipeline and terminal operator Buckeye Partners owns a large storage terminal facility in the Bahamas known as BORCO. As this terminal is located in the tropics and semi-tropics, Buckeye is justifiably concerned about the possibility of lightning damage. Protecting against lightning is costly. It does not make the terminal work better or faster, or allow the tanks to hold more product. In some cases, lightning protection systems may actually limit tank fill height. Lightning protection has historically been covered under API 2003. Several years ago, it was broken out of 2003, and API 545 was established to address this subject. Since industry codes, standards and practices have been based upon historical subjective experience and not upon empirical evidence, API set aside funds to study the matter as related to storage tanks. Culham Laboratories was hired to test specific assumptions and protection techniques in laboratory simulations, and to make both general and specific recommendations to the newly formed API 545 committee. One of the main lessons learned in that research was the need for bypass conductors located at intervals around the perimeter of an external floating roof (EFR) tank. These fixed conductors equalise the potential and provide a path for current flow between a floating roof and the tank shell. For years, shunts have been considered adequate to perform this function. However, research has shown otherwise.

Fighting fire against the odds

ISO 14001 sets out the criteria for an environmental management system. It does not state requirements for environmental performance, but maps out a framework that a company or organisation can follow to set up an effective environmental management system. The standard can be applied to a variety of levels in the business, from organisational level, right down to the product and service level (RMIT university). Rather than focusing on exact measures and goals of environmental performance, the standard highlights what an organisation needs to do to meet these goals (IISD 2010). Environmental impacts due to combustion and the use of extinguishing agents can be successfully mitigated by selecting the appropriate extinguishing agent and technology.

Tank heating: a new way of thinking

The rising number of infrastructure projects around the globe means higher volumes of product such as asphalt and bitumen. These heavy oils need to be heated to reduce the viscosity for pumping and transportation. Traditionally, heating in these tanks had been less important due to factors such as: - Smaller capacity tanks - Tank heating being part of the tank manufacturer’s scope - Changing ambient temperatures leaving heat calculations subject to interpretation - No accurate method available to predict performance. Heavy oils need to be heated at the final usage point for performance and quality purposes. However, it is also important to heat these products at intermediate stages for transportation and it is this type of heating that must be reduced.

Why use a floating roof critical zone survey?

A floating roof, as its name implies, floats on the surface of the product in the storage tank. As the liquid level changes, during filling, emptying, or expansion and contraction due to temperature changes, the roof, by design, will move up and down with the fluid level in the tank. The floating roof was designed to minimise the vapour space between it and the liquid surface of the product in the tank. The floating roof has support legs hanging down into the liquid. At low liquid levels the roof eventually lands and a vapour space forms between the liquid surface and the roof. The support legs are usually retractable to increase the working volume of the tank. Since there is no large vapour space for the liquid to evaporate into, vapour losses are kept to a minimum. Types of floating roof designs include flat pan, vapour mounted and peripheral pontoon. In its simplest form, the floating roof is merely a large flat pan, or disk, slightly smaller in diameter than the tank shell that floats on the product in the tank. The circumference of the roof is fitted with a system of flexible ‘shoes’ to close the space between the edge of the floating roof and the tank shell to minimise vapour loss. The shoe (seal) used is generally comprised of a continuous strip of flexible, special rubber material which is attached to the roof and to the seal ring around the inside circumference of the tank shell. The complete seal unit moves with the roof maintaining a virtually vapour tight seal. In principle, the floating roof eliminates losses by greatly reducing the evaporative loss of the stored product. Floating roofs, while effective at reducing evaporative loss and emissions, depending on the postion when the floating roof lands on the bottom of the tank could pose several potential environmental, production and engineering issues.

Improving confidence in tank inspection

Tank inspection is an important part of effective asset management, from both regulatory and operating efficiency perspectives. A failure of a tank can be catastrophic, but probably more likely is degradation resulting in slow loss of stored product and possibly contamination of the environment. Any unscheduled removal from service can impact revenues from loss of capacity, and potentially lead to higher repair costs as a faster response is required. To manage this degradation, inspections are carried out on a regular basis and repair work planned accordingly. These inspections must therefore inspire confidence that they have identified any degradation correctly to avoid either unnecessary repairs or unexpected failure. A particular issue with any tank floor inspection is that once the tank is re-filled it is very expensive to cross check any inspection. Inspections are often carried out by experienced third party inspection companies which deliver a report on condition. Careful selection of these companies will certainly improve confidence in results, but any asset operator should be aware of the inspection process and challenge the inspection to deliver the highest possible quality.

In pursuit of great ground conditions

Typically, tanks are located on sites with less than perfect ground conditions near water access or old brownfield sites with poor or mixed soils. New sites adjacent to water often contain dredge spoil deposits of erratic strength and soil types. If left unimproved, these conditions can cause damage to the foundation performance of a tank. Previously placed uncontrolled fill, which is frequently observed on brownfield sites, has little to no history on the compactive efforts used in its placement, and could lead to differential settlements of the tanks. The poor soil conditions at these prospective sites force tank designers to limit the storage capacity by decreasing the shell height or designing the tank on an expensive deep foundation system to bypass the problem soils. In many cases, tight budgets and schedules do not allow the reduction of tank capacities or construction of expensive and time consuming deep foundations. In the past 15 years, increase in performance criteria has been regulated more stringently by the API. Limiting settlements of the tank around the shell to within API criteria and reducing the possibility of edge stability failures is a major design consideration for tank foundations. Tank designers now turn towards ground improvement methods to allow the efficient and cost-effective use of sites with poor ground conditions.

FRANCE: complying with the latest regulations

Following several accidents as a result of ageing equipment, the Ministry of Ecology and Sustainable Development launched an action plan to combat the situation at the end of 2008. This included several main issues: identification of the equipment to be inspected, definition of sensible areas, choice of the relevant non destructive technique, type and frequencies of inspections, definition of acceptability criteria, and evaluation of the remaining life time. In order to organise the companies involved, several aspects needed to be improved: importance of the feedback, cooperation between the services, and transparency in the decisions.

Engineering a partnership

From modest beginnings, E-M Co. – renamed EMCO Chemical Distributors – has grown into one of the top 10 largest privately owned distributors, blenders and custom packagers of industrial chemicals, specialty chemicals and fine ingredients in the US. It is also the 44th largest in the world, with more than $300 million (€221 million) in annual sales. After four decades of continuous growth, which included the creation of three additional processing facilities in the US Midwest, four new warehouses, a Canadian distribution hub and a network of satellite sales offices, EMCO had finally run out of room. So, in 2010, plans were unveiled to outfit a new corporate headquarters and manufacturing facility in Pleasant Prairie, Wisconsin. The site was located 14 miles north of North Chicago, just across the Illinois-Wisconsin border near the city of Kenosha. To house its new facility, EMCO acquired a former resin and ink plant that had been used to produce materials for the printing industry.

Easy access to inventory

Texas-based ZXP Technologies is a packaging, blending and distribution service for vehicle, commercial and industrial lubricants, as well as bulk power products. Spanning 40 acres, ZXP Technologies specialises in antifreeze, vehicle lubrication and bulk powder products. The facility, also serving as the company’s corporate headquarters, features over 200 tanks and nearly 450,000 square feet of warehousing and covered facilities. Rail spur complete with boxcar loading, truck loading docks and a three acre barge facility off the Houston Ship Channel keeps an average of 4,500 truckloads and 1,000 rail car shipments moving per year. Altogether, ZXP Technologies has the capability to facilitate over 100,000,000 gallons of annual production. With over 200 formulation and blending tanks, keeping inventory has historically been a challenge. ‘We used float and tape gauges but our staff required higher level accuracy for gauging levels and they required more routine maintenance,’ says operations manager Bobby Ballard. ‘We also have flow meters, but they are high maintenance and wildly inaccurate.’

Preventing loss with insulating coatings

A common, and unfortunate, theme of storage tanks around the world today is loss. Whether it is vapour loss, energy loss, or even loss of substrate due to corrosion, any of them can be costly. Most facilities have to contend with at least two of these, but sometimes they have to deal with all of them. Many solutions have been found to combat these issues individually, but there is only one solution out there that can help tackle all three: insulation coatings. Thermal insulating (or insulation) coatings came onto the market in the mid- 1990s and were mainly used in commercial and industrial applications. These are not reflective rooftop coatings or radiant barriers, which solely reflect UV rays due to their bright white colour. Thermal insulating coatings are usually acrylic resins filled with insulating particles, creating a true thermal barrier between two environments. The market was slow to accept them, as it was hard to believe that a coating thickness of 1-5mm could effectively insulate and replace inches of conventional insulation. Today, there are countless applications for personnel protection, energy retention, reduction of radiant heat gain, prevention of corrosion under insulation (CUI), and condensation reduction. The coatings are specified as replacements for certain types of conventional insulation worldwide, with clients such as Shell, Chevron, Exxon, and BP facilities.

Safety first for industrial coatings

Coating contractors regularly engage in one of the most hazardous jobs at a facility. Published OSHA accident reports available on the US Department of Labor web site read like tragic news headlines: ‘One killed, two injured when paint vapour explodes’; ‘One employee dies and one is burned in painting flash fire’; ‘Three employees asphyxiated by paint fumes’. The risks are further exacerbated within confined spaces such as tanks. These spaces are not only known to accumulate toxic, flammable, and even explosive fumes and dust, but the very act of application of traditional coatings presents its own serious risks. The problem stems from the application of carbonbased coatings, which include commonly-used polymers, polyureas, and urethanes. These coatings off-gas hazardous VOCs and Hazardous Air Pollutants (HAPs) during, and after, application, which can cause irritation of eyes, nose, throat and/or respiratory tract, headaches, nausea, lightheadedness, memory impairment or even unconsciousness to exposed personnel or contractors.