Tank Storage Magazine v14 i02


Volume: 14
Issue: 2
Date Published: March 27, 2018



Fujairah's newest storage terminal

The latest storage asset in the Port of Fujairah for middle distillates and fuel oil also offers one of the fastest flow rates Brooge Petroleum and Gas Investment Company (BPGIC) is the youngest storage terminal in the Port of Fujairah, having started operations recently.However, the facility boasts the latest in technical storage terminal innovations and has one of the fastest flow rates in the port, at up to 4,500 cm/hr for fuel oil and up to 5000 cm/hr for clean products.Flow rates for crude oil in its phase 2 expansion will be 16,000 cm/hr.The company was established in 2013 and construction work on the Fujairah terminal quickly followed in 2015. The first phase of 400,000 m3 of storage across 14 tanks for middle distillates and fuel oil was completed last October, and, following testing and commissioning, the terminal commenced daily operations in January.In an interview with Tank Storage Magazine, general manager Nico Paardenkooper says that the terminal addresses several challenges traders and customers are facing.

Shifting LNG market dynamics

As LNG markets evolve to become more flexible and increasingly more competitive thanks to a global glut, energy analyst Mahin Siddiqui examines how this has affected business LNG markets are in a state of significant flux. Usually calm, the sector is now evolving to become more competitive and dynamic.This change is largely brought about by the wide spread LNG glut – however several LNG market players have debated recently how much of glut there currently is. More than 100 million tonnes per year is set to enter global markets by 2020 reports Bloomberg. By 2019, this oversupply will peak at roughly 60 mpta.Mostly, this oversupply is driven by the US and Australia in the global LNG market – 83 bcma of committed US capacity has received Financial Investment Decision (FID) according to Timera Energy, and most of it will be online by 2019.

The rise of the fake terminal

Whilst not a new phenomenon, fraudsters attempting to trick people out of significant sums of money are using more sophisticated techniques, prompting officials at the Port of Rotterdam to act. Jasmin McDermott reports An order is posted online by a supplier of JP54, who says they have up to two million barrels of the product forsale.An eager client spots the deal, always attractively priced, and proceeds to contact the seller, who encourages them to pay for the kerosene, used as aviation fuel, in advance of receiving the product.The client then arrives at the port to collect their order and only then do they find out that either the terminal does not store the product in question, or that the storage facility itself doesn’t exist.‘This is not a new phenomenon,’ says Ronald Backers, business intelligence adviser for the Port of Rotterdam Authority.‘It has been going on for at least five or six years. These transactions are often accompanied by all sorts of documents, which involve a variety of forged stamps and certificates.'

Storage for a flourishing trading market

As products supply continues to skyrocket and refining and production infrastructure grows in the Middle East, Alaska International plans to build more capacity for Class A products Escalating demand for petroleum, distillates and fuel oil, coupled with a surge in oil production and additional refineries in the Middle East, is creating a solid growth foundation for Alaska International.International energy trading company Renish Group acquired the Hamriyah-based facility in the UAE in 2013 with just 60,000 m3 of capacity for petroleum products. In just a few years the company quickly expanded capacity to 125,000 m3 spread across 22 tanks, which can serve local and regional demand for base oil, bitumen, fuel oil and gas oil.The acquisition was part of the company’s long-term vision to acquire margins at every stage of the supply chain.

Storage hubs: navigating unprecedented changes

Oil storage hubs have had to adapt to unprecedented market changes over the last few years – and even moreextraordinary changes are on the horizon.Since 2014, global energy markets have witnessed a series of events that have triggered a remarkable rise in oil stocks followed by rapid drawdown. The rise of the shale oil revolution in the US, the shift from contango conditions to backwardation as well as OPEC’s production cuts has made for a challenging set of conditions that storage hubs continue to navigate through.And the hotly debated International Maritime Organisation’s sulphur cap on marine fuel, which comes into effect in 2020, has created even more uncertainty for the entire supply chain.Discussing key factors shaping energy markets as well as how oil storage hubs should tackle backwardation in the fuel oil and crude oil market during IP Week, Chris Bake, member of the executive committee at Vitol, explained that the US output of shale in 2014, coupled with ballooning crude oil margins created a ‘bonanza situation’ for oil storage.

Middle East storage operators buck oil price trend

Despite a drawdown in Fujairah inventory, storage operators still see opportunities ahead. Criselda Diala-McBride reports The oil market is singing a different tune. After OPEC and its allies flexed their muscles by collectively agreeing to extend their overall production ceiling until the end of 2018, oil prices rose above $60 per barrel as of March this year, a far cry from the $27-per-barrel rate it had to endure in early 2016.Crude oil futures at the end of January 2018 hit their highest value in three years, surging by 25%, with ICE Brent gaining 7.8% to $69.08 per barrel, as NYMEX WTI expanded by 9.9% to US$63.66 per barrel, according to OPEC’s oil market monthly report.With OPEC’s January compliance level on the supply cut reaching a record 137%, global oil inventories appear to be gradually shrinking as well, settling at 97.7 million barrels per day (mbpd), latest data from the International Energy Agency (IEA) has indicated.

Ensuring India's energy security

Three vast underground storage caverns are not only cushioning India from the disastrous consequences of oil supplydisruption but are also changing the energy scenario for its refining sector In 2015, history was made in India with the commissioning of the first of three strategic underground storage caverns at Visakhapatnam, Mangalore and Padur.The three caverns help the Government of India to ensure greater energy security and cushion the country against any adverse external supply disruptions. Visakhapatnam, which can hold 1.33 million metric tonnes (MMT), Mangalore, which can hold 1.5 MMT and Padur, which can hold 2.5 MMT are one of the biggest underground cavities to ever have been created in India.Constructed and operated by the Indian Strategic Petroleum Reserves (ISPRL), the three caverns can store 5.33 million metric tonnes of imported crude oil, based on a 15-day crude oil requirement by the country’s refineries.

Deploying automation logic to fuel management systems

Automation of tank terminal processes at Chicago O’Hare International Airport improves operational efficiency across fuel management systems Aircraft Service International Group (ASIG), now owned by Menzies Aviation, has been the fuel system operator for the tank farm at the Chicago O’Hare Airport since 1960.There are two tank farms at O’Hare, one for United Airlines (UAL) and one for other airlines (OAL). The UAL tank farm includes a pad with 14 pumps to fuel all of the United Airlines flights. The OAL tank farm includes a pad with six pumps that feed the cargo area truck loading rack and the two super satellite systems that fuel the OAL gates and load racks.Varec’s first automated fuel control project at the tank farm took place in 1999. The project included installing a programmable logic controller (PLC) in each of the two tank farms, which communicated to one central control room, as well as the FuelsManager software to manage the inventory, accounting, and reconciliation of their fuel assets.

The future is smart

Downstream process specialists Implico examine the top ten key technologies that are revolutionising the tank terminal industry Tank terminal operators are now facing major challenges: volatile crude oil prices, increased competitive pressureand numerous takeovers are demanding foresight, flexibility and new business models.But there is also some good news: digitalisation is making terminal processes faster, more efficient and more  transparent than ever before.But what does this digitally optimised supply chain look like? A look at the ten key technologies shows the potential of the ‘smart tank terminal’.

Innovative techniques for tank storage inspection

A unique NDT method has been developed for the inspection of welds in storage tanks that not only increases operational reliability but also reduces inspection costs.TWI – an independent research and technology organisation – devised the new inspection technique to measure the inner fillet from outside the tank, thus removing the need to drain the asset.The company’s asset integrity management experts have been involved in storage tank inspection for many years – initially addressing steel storage tanks in refineries – and more latterly, looking at polymer-based storage tanks in the petro-chemical industry. Non-destructive testing techniques including magnetic particle, ultrasonic and radiographic testing are used in the inspection of storage tanks, as increasingly are condition and structural health monitoring methods such as acoustic emission testing.Steel storage tanks are known to be susceptible to internal corrosion due to water settling at the bottom, particularly around the inner fillet welds between the vertical wall and the base plate which are vital structural elements. Historically, inspection of large storage tanks has been lengthy because it requires draining the tank, disposing of any contaminated materials and extensive cleaning.

Overfill protection: A review of API 2350 4th & 5th edition

In the second of a two-part article series, Philip Myers and Brock Trotter of PEMY Consulting review the 4th and 5th editions of API 2350 and how it affects overfill standards MANAGEMENT SYSTEM PRACTICESLOCSA key step in OPP is to establish LOCs (levels of concern) as shown in Figure 3. OD is the liquid level we never want to reach. It is defined as overfill, damage, or any other problem associated with a too high liquid level as specified by the operator/owner. In API 2350 there are 2 important LOCs:1. LAH2. LAHHThe LAH is mandatory. Regular practice tends for most owner/operators to use an LAH and LAHH. API 2350 now requires only one alarm level. It has been demonstrated that adding more alarms does not necessarily improveoperator performance. Historically, two alarms were required because the alarms were so unreliable.Today however, alarm systems can be incredibly reliable. For these reasons, API 2350 allows for a single alarm. The owner operator must ensure that their alarm system is engineered to be highly reliable. So, the use of a second alarm (LAHH) is optional. However, when used, the LAHH or second alarm must then meet all the rules specified in API 2350.

Jetty inspection from another perspective

Maintenance inspection of jetties is not an everyday job and has been postponed in the past. At the same time, tank storage companies rely on 24/7 operations for the continuous availability of their jetty infrastructure. A jetty that is out of order for repairs, maintenance or inspection has a significant negative impact on the profitability of the company and has further implications on their customers. Since the jetty often doesn’t have an alternative, it is thenavel cord of a storage company.In western Europe, many tank terminals were built in the 1950s and some later in the 1970s – making some of the infrastructure more than 50 years old. To keep these structures in good condition to moor oil and chemical tankers safely, an inspection must take place at least once every five years.

Using sonar to fight sludge

An Interferometric sonar is now being used to provide clients with an accurate sludge volume and an image of the sludge build-up in crude oil storage tanks.Petro-Base Group (under an exclusive license by Willacy Oil Services) has begun using the latest version of the SPOT (Sludge Profiler of Oil Tanks) designed and manufactured by Marine Electronics.Following improvements with the SPOT system, Willacy has been able to conduct surveys in the UK and worldwide faster and more efficiently than before.The surveys are important as sludge accumulation can reduce a tank’s storage capacity and cause production problems further down the refining process. Large sludge banks are a particularly serious concern when landing the roof of floating roof tanks as they can cause them to tilt and jam. Such incidents can create a hazardous situation that will prove challenging and expensive to rectify.

Magnetic anchors for smarter scaffolds

The annual scaffolding costs at a refinery or a tank storage company can be high, which remains the driving force behind ongoing innovations in this field. These innovations can help to reduce costs, shorten the construction time and increase safety. PROVEN CONCEPTAn example of such a scaffolding innovation that has proven itself in recent years at companies such as Shell, Dow Chemical and Vopak, is Controlock by McNetiq. The company supplies magnet anchors to secure scaffolds on steel surfaces like storage tanks, ship walls and bridges. This fixation is non-destructive and is therefore almost always allowed.Anchoring with the construction produces the scaffolds’ strength and stability. As a result, the buttresses needed for freestanding constructions can be omitted. In many cases voluminous, pyramid shaped scaffolds are no longer required. This means significant savings on building time, materials, and an increase in personal safety.