Tank Storage Magazine v12 i05


Volume: 12
Issue: 5
Date Published: September 22, 2016



Uncovering America's hidden storage gem

Centurion Midstream is harnessing the strategic and logistical advantages of the Delaware Basin through the development of a series of terminal assets Straddling the US and Mexican border, Brownsville in Texas is perfectly placed to serve a recently de-regulated Mexican energy market and Centurion Midstream is capitalising on these new market dynamics.The company has ambitious plans to construct a series of terminal assets in three key locations, two in Delaware and one third in Brownsville, to serve the de-regulated markets of Mexico, which is 650,000 barrels short of petrol and diesel every day.

The future of crude by rail for America's oil markets

Crude oil volumes transported by rail plummeted last year. Additionally, it was one of the worst yearsfor rail accidents in the US. The fundamentals behind the first substantial decline since it took off in 2009 boil down to price, greater choice and demand.The crude by rail boom took off on the back of the shale revolution, where the biggest amounts of crude and shale formations could only be reached by train.

The best of both worlds

Despite low prices and the potential for competing storage activity from other countries, high global production and an end to the US export ban certainly favour US storage in general — and the Gulf region in particular. Vaughan O’Grady reportsOutput in the US may be slightly down on last year but globally there is still a lot of oil around, and storage building is continuing apace.New infrastructure to accommodate oversupply began when prices plummeted in 2014 and is continuing. PADD III (one of five Petroleum Administration for Defense Districts) in the Gulf Coast is the primary location of a significant number of these new infrastructure projects.

Midstream assets for the most active energy market

The shale oil revolution, liberalisation of Mexico’s energy sector and an established demand market have provided Jefferson Energy Terminal with the foundations to expand further in the Gulf Coast The US storage market has remained active and robust, thanks largely to the shale oil revolution, continued refineryexpansion and the recent liberalisation of Mexico’s energy sector.Jefferson Energy Terminal is capitalising on its strategic position in the heart of one of the most active refining markets in the US and on the back of these favourable market conditions with a series of expansion projects at its facility in the Port Arthur-Beaumont refining complex.

It's all in the balance

Supply and demand interplays are starting to balance out as global production tightens, Energy Aspects’ Dominic Haywood considers how this will impact the US tank storage sector To successfully examine the impact of crude oil supply and demand balances in the US on the tank storage sector,it is important to understand the relationship between price, inventory and balances, and the numerous factors that can affect these, as well as the different market players who affect them.

Shale: Amercia's energy revolution

The American energy revolution is a shale energy revolution. According to the US Department of Energy, ‘up to95% of new wells drilled today are hydraulically fractured, accounting for more than 43% of total US oil production and 67% of natural gas production’.Without technological advances in hydraulic fracturing and horizontal drilling, which have unlocked previously inaccessible resources in shale formations, the US would not lead the world in oil and natural gas production.

Oil supply and storage capacity continues to expand

The shale revolution continues to drives storage capacity expansion in the US despite market volatility from the fluctuating oil price Volatility remained intense for the oil market in 2016, with crude prices caught in the ebb and flow of hope and reality, and under increasing pressure from a continued expansion in a global oil supply glut.Bankruptcies of North American exploration and production companies accelerated while merger and acquisition activity was less robust as the forecast for the oil market remained muddled and the banking industry reined in their support.Low oil prices did incentivise greater demand in parts of the world, namely for petrol in the US, with implied petrol demand registering a 9.815 million barrels per day (bpd) record high weekly rate in mid-June, and remains on pace to set an all-time high in 2016.

The force awakens - the impact of US crude oil exports

With the remove of crude oil export restrictions, market forces are expected to stimulate more exports of US crude as the country re-enters the global export market In December 2015 Congress passed a bill to lift the 40-year ban on US crude oil exports. Soon after the President signed it into law, Enterprise Products Partners loaded the first cargo.The impact of this change on the oil and shipping industry has been far-reaching and created various new trade routes as well as re-instated some old ones. More profound changes are likely for the future as the oilexport infrastructure in the US improves, foreign markets for US crude are further developed and (most importantly) domestic production will start to increase again.

Blanketing tanks against the freeze

When it comes to tank storage and piping systems it is always best to prepare well in advance for the colder, winter months and have a freeze protection plan in place Even the most durable and well-constructed tanks cannot handle cold conditions without some extra protection.This begs the question as to what can be done to protect tanks and piping from and to preserve efficiency in cold weather.There’s certainly more than one solution out there, but they can be ranked into categories of good, better, and best.When storing liquids in large tanks, some operators might employ a circulation system to keep the fluid churning and moving. This helps to prevent freezing during extreme temperatures.