Tank Storage Magazine v11 i03


Volume: 11
Issue: 3
Date Published: May 8, 2015



Unlocking the Colombian potential

Developing and enhancing strategic storage assets in Cartagena is key to fully unlock the crude oil potential in Colombia as exports grow in this key region and Oiltanking is relishing the challenge.The driving force behind these expansion plans is the fact that over the years, production of crude oil has steadilygrown to more than a million barrels a day in Colombia. However refining capacity is only half of that. In addition, refineries need more light crude instead of the heavy oil being produced in Colombia.Both these factors have driven up the need to export from the country.Ricardo Diogo, business development manager for Oiltanking Latin America says that infrastructure needs tobe constructed in the right place to optimise the logistic supply chain.The storage provider's current focus in Colombia is an expansion of its existing terminal in Cartagena. The marine-based terminal, which has a capacity of 36,400 m3 is the first Oiltanking terminal in Colombia.The terminal is supported by a deep water dock with a depth of 29 feet and is connected to nearby industries by pipeline. It serves both chemical and petroleum markets by storing feedstock for the production of chemicals and speciality chemicals as well as clean petroleum products.

Brazil - Latin America's battered angel?

Amid Brazil’s gathering economic storm clouds, storage operators are taking a cautious approach to capacity expansions. Lynda Davies reportsBrazil is facing some strong headwinds. The country posted a GDP growth reading of -0.2% year-on-year in Q4 2014, taking growth for the year as a whole to a scant 0.1%. Data for Q1 of this year suggests a further slowdown from 2014, and is a long way off the heady 4% annual growth experienced between 2002 and 2008. Even in 2013, the country’s GDP posted a 2.4% gain.The Real has dropped 26% over the past 12 months, putting pressure on the cost of imports. Commodities’ pricesare down. Inflation continues to climb and will come under further pressure from the weakening currency. This likelywill lead to a further tightening from the central bank whose policy rate now stands at 12.75%, a six-year high.A massive corruption scandal at the country’s state-run oil producer Petrobras that erupted last year has intensified inrecent months. The oil company accounts for more than 10% of Brazil’s investment and 87% of the country’s oil output and all domestic fuel production. As the scandal has deepened, key infrastructureprojects have been suspended or scrapped, and it has made it more difficult for all companies to get financing.

Regulatory update

Jane Besch, operational excellence manager at Vopak Americas looks at the recent regulatory developments that could affect tank owners and operators.Ozone NAAQS (2008):In 2013, the US Court of Appeals for the D.C. Circuit issued its decision, upholding the primary ozone National Ambient Air Quality Standard (NAAQS) -2008, of 75 ppb, but ordering EPA to provide further explanation for its secondary ozone standard, which applies to effects of ozone on such things as animals, vegetation, visibility, property and personal comfort and well-being.The American Lung Association, the National Resource Defense Council and others had brought the challenge forward arguing that EPA did not follow the advice of scientific advisors2, who had suggested that the level should be closer to 65-70 ppb.The Court in this case deferred to EPA’s actions, which is not unusual, provided its actions were reasonable. Followingthis decision, on February 13, 2015, EPA Administrator, Gina McCarthy, signed a final rule outlining state requirements for implementing the 2008 ozone (75 ppb) NAAQS, which formally revoked the 1997 8-hour standard of 84 ppb. It is estimated that about 48 areas in the country still do not meet the 2008 75 ppb standard.

Transforming the regulatory landscape for tank operators

A chemical leak into West Virgina’s Elk River set in motion the creation of the Aboveground Storage Tank Act – but time will tell if operators will remain in this new regulatory structure. On January 9, 2014, a chemical leak into the Elk River near Charleston, West Virginia, US contaminated the water supply for 300,000 West Virginians – approximately one-sixth of the state’s population. It also set in motion an almost-immediate legislative response that, to this day, is still being adjusted.At the Freedom Industries aboveground storage tank facility, up to 10,000 gallons of a mixture of coal-cleaning chemicals leaked out of old steel tank, pooled behind a poorly maintained secondary containment wall, and leaked through and below this wall into the Elk.The Freedom Industries site is located approximately 1.5 miles upstream from the intake for West Virginia American Water’s drinking water treatment plant, which serves Charleston, the state capital, and parts of nine West Virginia counties.

US export policy is holding back the crude

While consistent crude oil supply growth in the US has been warmly welcomed by terminal operators across the continent, it has highlighted a legislative problem that could significantly hamper future oil and gas exploration and production.Analysis by Bentek Energy, an energy market analytics company, shows that the crude oil market has hit a wall and that traditional demand sources are struggling to absorb the growing supply – as highlighted by crude inventories surging at unprecedented rates.As a result domestic storage is filling to record levels - Cushing in Oklahoma has been steadily growing since November and is expected to reach maximum capacity in May.On March 20 the Energy Information Administration reported that stocks in the US rose to their highest level since the data was published in 1982. The storage trend has reversed whereby crude inventories have continued to grow instead of decline at the end of the year when refineries maximise utilisation. In December 2014,refineries were operating at 94% utilisation but inventories continued to grow throughout the end of the year and into 2015.The situation has been described as a ‘bright spot’ for terminal operators and it is easy to see why – storage is the must have commodity in the oil and gas market – a position which was reinforced with the introduction of the first ever physically delivered crude oil storage futures contract from LOOP in March 2015.

Out with the old, in with the new

When Enterprise Products Partners bought Oiltanking Partners last year, Ken Owen, Bo McCall, Jon Ackerman and Javier del Olmo found themselves at a decision point. Owen, McCall, Ackerman and de Olmo comprised most of the management team of Oiltanking North America. They were passionate about their company, loved their jobs, and had planned to stay with Oiltanking for many years to come.Instead, in January 2015, after completing their transition duties, they decided to leave and form Moda Midstream. Their goal is to capture some of the opportunities they see in liquids terminaling and logistics.

Carving a chemical storage niche in the Middle East

Arabian Chemical Terminals (ACT) is continuing to enhance its unique position within the Saudi Arabian chemical storage market by constructing an additional 13 tanks at its facility in Jubail Commercial Port, located in the Eastern Province at the Persian Gulf.Following the commissioning of its first ever commercial liquid chemical bulk storage terminal in Saudi Arabia in 1987 at Yanbu, ACT has continued to carve a niche service for this specialised market.Speaking to Tank Storage Magazine, Kasper Castricum, ACT Jubail’s terminals and business development manager says this latest development will help service their customers and strengthen its market position further by offering tank storage and door-to-door supply chain solutions to product owners.In July 2012, ACT commissioned its second and larger terminal in the region’s petrochemical hub Jubail, on the eastern coast of Saudi Arabia. The facility started with 14 tanks for chemical product handling including chilling, heating, blending and mixing and nitrogen padding and purging for both import and export purposes to serve the upcoming chemical industry in the region.

Satisfying storage demand in the US

Blackwater Midstream is reaping the benefits of a tightened capacity supply for chemical storage with by further expanding its second facility in the Port of New Orleans.The 58 acre site in Harvey, Louisiana, US, which was acquired in July 2013, began operations in July 2014 with atotal existing capacity of approximately 300,000 barrels spread across 16 tanks ranging in size from 1,500 to 50,000 barrels.The company, which launched in 2008 with the acquisition of their Westwego, Louisiana terminal facility, set about working with authorities for regulatory and construction approval for the Harvey site from various state and local agencies.In April 2014, the Jefferson Parish Council granted approval for the site development plan that included the construction of 30 new tanks with a total of 1.2 million additional barrels which will utilise only 60% of the total land area of the property.Following discussions with customers and as a result of steady demand, the terminal operator has begun their expansion development plan and is currently adding nine 50,000 barrel tanks.The first set of the three new tanks are completed and in service. The second set of three are under construction andscheduled to be in service by the beginning of June 2015 and a further three are due to be complete by August 2015.

Developments in BY-PASS CONDUCTORS for external floating roof tanks

It has been several years now that by-pass conductors have been required by both the American Petroleum Institute API RP-545 and the National Fire Protection Association NFPA 780, Chapter 7, which provides requirements for lightning protection of external floating roof tanks. Therefore, now is a good time for a review of the requirements and techniques employed to meet both requirements.A lightning strike contains two (some include a third, intermediate segment as well) distinct components of current flow. The first is a short duration, high-energy discharge. This is followed by a second, longer duration discharge of a few hundred amps. It has been established that it is the second component – the long-duration, lower energy component – that causes most tank ignitions.These two, distinct components require different types of conductors. The need for different types of conductors mayhave been obscured by the fact that most graphs representing lightning current flow have historically been wildly out-of-scale.

3D mapping of oil assets for Vopak's London terminal

Although laser scanning has been around for a number years the software, until now it has not been capable ofhandling larger brownfield sites typified by the oil and gas sector. Advances in technology have dramatically increasedthe speed of data acquisition and storage capacity, significantly reducing the time on-site and data processing.As a consequence, the cost of mapping a complex site has plummeted, making it an affordable proposition for those with the vision to appreciate all the potential benefits to be gained from 3D mapping their assets.

Asset integrity management: a combined approach

Storage terminals and their assets – specifically storage tanks and piping – are susceptible to material failure and a wide range of issues throughout their service life.While an integrity problem can lead to dangerous situations and unplanned downtime, uncontrolled corrosion in particular can weaken or destroy components and may cause environmental contamination and product losses with a potential risk of damaging economic effects. Storage tanksAlthough the material and welds in storage tanks are tested for defects upon construction, tanks must be periodicallyinspected for signs of deficiencies throughout their service life. Any changes noted during the inspection process mustbe evaluated, documented and analysed according to industry standards such as API.

A new generation of double volute twin screw pumps

An innovative ‘Plug and Pump’ design has been introduced to the market by Klaus Union for double volute twin screw pumps. The pumps are built in accordance with the requirements of API 676, 3rd edition. ApplicationsDouble volute twin screw pumps, which were presented to the industry in the first half of the 20th century, gained increased acceptance during the past 30 years.Incorporating all the advantages of positive displacement pumps, they experienced strong acceptance as a solutionfor highly sophisticated pumping applications.

Maximising storage capacity in an energy renaissance

As North America enjoys an energy renaissance Matrix PDM Engineering’s Ken Erdmann and PEMY Consulting’s Philip Myers explain how operators can squeeze more capacity from their tanks. North America is in the midst of an energy renaissance – one that has positioned the United States as the world’s largest oil producer while Canada also continues development of both its shale resources and oil sands. It’s a renaissance that has transformed the US from a primary oil importer to a net exporter and is one that shows no signs of slowing.Against a backdrop of lower oil prices, new pipelines such as the Enbridge Flanagan South and Tallgrass Energy’s Pony Express, and US regulations that prevent crude oil export – it’s no surprise that storage operators seek to squeeze as much capacity out of their tanks as possible.Yet, while maximising capacity can be achieved through a variety of means – adjusting alarm levels, adding shellheight or removing shell overflows, or reducing low levels – operators must understand the technical and safety issues at hand before doing so.

Just add water

Concrete Canvas was originally incorporated to manufacture its Concrete Canvas Shelters: a ‘building in a bag.’ By just using water and air, a solid building can be deployed by two people in less than two hours and is ready to use in under 24 hours. This provides a solid, waterproof and fire-proof portable structure ideal for use in remote regionssuch as disaster areas or war zones.But the cement-impregnated fabric technology, Concrete Canvas (CC), soon caught the attentionof the tank storage sector.The material, which is a geosynthetic cementitious composite mat (GCCM) can be used to guard against the costlyeffects of wind, rain and long term degradation of terminal bunds.

Financial market trading of crude oil storage

Storage has become a tradable commodity on the financial market with the launch of the first ever physically delivered crude oil storage futures contract.The CME Group – the world’s leading derivatives marketplace – along with terminal operator LOOP and online oil marketplace NEO Markets, developed and brought to market the unique LOOP Crude Oil Storage futures contract which allows for the fluid trading of storage space.The futures contracts became available for trading on March 29, with the first auction of LOOP Capacity Allocation Contracts two days later resulting in 11.2 million barrels of physical oil storage capacity being successfully auctioned.Each contract gives market participants the right to store 1,000 barrels of crude oil at LOOP’s Clovelly Hub in Louisiana, US for a specific calendar month starting from May 2015.

Moving away from conventional seals

Gas sealing technology has been successfully applied in loading, unloading and transfer pumps in liquid storage terminals for more than 10 years. With average seal life and pump reliability exceeding more than three years in these very difficult pumping applications, the unique concentric dual gas seal enhances reliability, eliminates emissions, protects and prevents reportable spill incidents. Unique design and operational features accommodate pump dry running, soft starts, repeated start/stops and off-spec equipment conditions that occur with terminal pumps.Inventories of hazardous chemicals and finished products for industry are stored and transferred via railroad, road transport, ships or barges. One common logistical requirement for industry is bulk product storage capacity. Liquid storage terminals are located around the globe in processing plants, marine terminals and at remote locations. In terminals, these products are transferred between tanks, or loaded onto mobile shipping platforms with centrifugal pumps.

A new era in tank protection

When Lightning Eliminators invented the Retractable Grounding Assembly (RGA) at the beginning of the new millennium, it was received with accolades. Once patented in 2006 – the RGA has been installed in thousands of tanks worldwide and it has attempted to be copied by several vendors around the world.Over the past 16 years with the advent of new materials, substances and processing – new challenges have arisen inthe storage of volatile liquids and the tanks that house them. With the growth, changes and technologies, throughout the petroleum and related industries, it became clear that Lightning Eliminators needed to grow and change with the times and environments. With input from our customers, our engineers, experts and scientists, Lightning Eliminators has taken all the variables into account and has been able to enhance the RGA to better fit the demands of storage operators today.

Tank construction against the elements

When New Orleans-based Westway Terminals was ready to expand storage capacity at its terminal facility in Philadelphia, in Pennsylvania, US, it called on Fisher Tank Company to provide support for the project.Westway operates 15 bulk liquid storage terminals in North America that can accommodate everything from food-grade products to speciality chemicals. The company also develops customised storage solutions, includingservices such as blending, filtering, steaming and koshering. The Philadelphia terminal handles speciality chemicals,caustic soda, fertilizer, acids, petroleum products, base oils, biodiesel, wax, vegetable oil and molasses, and serves vessels, barges, tank trucks and rail cars.In all, the Philadelphia terminal offers 622,200 barrels of storage capacity. In 2013, Westway began work on an expansion project that would add 10 million gallons of capacity at the Philadelphia terminal. Plans called for 11 new tanks, including nine carbon tanks and two stainless tanks of varied capacities. With customers waiting for the storage space, Westway needed the tanks in service as soon as possible.

Simultaneous yet safe: a new approach to loading

In 2011 Spanish petrochemical company Cepsa undertook a review of operations at its Huelva site in southern Spain.The review incorporated a study into demurrage costs and jetty occupation, which were both reaching unacceptable levels.If the situation had continued it would have been impossible to sustain future volume increases and jetty occupation would have been approaching 100%. Cepsa needed to establish whether there was an alternative method to load the chemicals which was an improvement in terms of safety and efficiencies to the loading arms that they were using.Historically there have been two main ways to load the products to the cargo tankers, either dock hoses (rubber or composite construction) or loading arms. Cepsa uses both methods at its terminals around the world.

Static grounding protection for tank cars

In the hazardous process industries, more commonly referred to as the HAZLOC industries, static electricity is generated virtually all of the time. Various grades of crude oil, refined petroleum products like LPG, and a host of chemicals fall into a category of materials that are often referred to as ‘static accumulators’. Materials in this category are known to be powerful attractors of electrons from other materials and resist ‘letting go’ of electrons they come into contact with. In other words they ‘accumulate’ static charge. In a typical LACT unit or rack loading operation, the static accumulating product is transferred from, say, a truck, via the LACT unit or from a storage tank via a rack loading system into a receiving tank car. The equipment involved in the transfer of product can be referred collectively as the product ‘transfer system’. As the product makes its way through the transfer system to the customer side of the transfer, the molecules in the product become electrostatically charged.

Innovation in Africa

In the last year, five Leistritz multiphase pumps have been installed in Algeria. The pumps are used to transfer crude oil and gas with a gas volume fraction (GVF) of 97% from the wellheads and manifolds to centralised treatment facilities. After separating oil and gas, the oil is transferred over a distance of 700 kilometers across the Sahara to the Mediterranean. ‘Handling liquids and gas at the wellhead of an oil field is a costly procedure,’ Heinz-Dieter Roß, MD at Lesitritz Pumpen explains.

Everyone wants a piece of the storage action

StocExpo 2015 maintained its position as the leading event within the tank terminal industry with more than 3,500 people in attendance over the course of the three days.The conference, which sits at the heart of the show, attracted more than 170 delegates and featured 30 speakers from key ports, terminals and financial institutions across the globe discussing key macroeconomic trends, best practices, the latest technologies as well as the financial outlook for the sector.Market analysisThe first day of the conference kicked off with a comprehensive analysis of the market, including an outlook for the refining sector, what the future holds for the US shale market and upcoming trends for European storage.Although there has been a temporary relief for European refineries recently, due to the low oil prices, the speakers agreed that this isn’t going to last. European refineries have the odds set against them with high labour costs, elevated energy prices and stiff competition from the US, Middle East and Russia. Further capacity rationalisation is still required and strongly expected in the coming months.