Tank Storage Magazine v14 i05


Volume: 14
Issue: 5
Date Published: September 11, 2018



Growing Contanda's storage footprint in Houston

As demand for petrochemical and hydrocarbon storage supports further expansion & growth, Contanda Terminals talks more about how it is growing its midstream infrastructure in Houston with two construction projects On the back of the US’ thriving petrochemical, renewables and hydrocarbon markets the storage sector – particularly along the Gulf Coast – has been enjoying a renaissance.Since 2014, the shale oil revolution has gripped the country, and the results have pushed the US to become the undisputed world leader in oil and gas production as well as reviving the country’s chemical sector and trade flows.Today, the supply of petrochemicals now outstrips domestic demand, creating increased export activity to locations across the globe. Several US-based chemical projects are coming online, with more in the pipeline, supporting the need for more supply chain infrastructure.It is expected that by 2025, bulk liquid production in the US chemical industry will increase by 50 million metric tonnes, according to IHS Chemical. Additionally, the American Chemistry Council projects that by 2020 the industry will have sales of more than $1 trillion, with the export of chemicals linked to shale gas reaching $123 billion by 2030.Against these favourable conditions, Houston-based Contanda Terminals is embarking on two development projects as part of its strategic plan to double its total storage capacity across its 14 US terminals.

Petrochemical production fuels a bright storage future

The US Gulf Coast is a hub of petrochemical activity and with production expected to increase over the coming years, the demand for storage will also benefit. Stolthaven New Orleans explains more about how it is positioning itself to capitaliseon these favourable market conditions The US Gulf Coast is an excellent example of how the country’s shale oil revolution is boosting production output for energy product markets and increasing the need for more supply chain infrastructure.Earlier this year, the International Energy Agency projected that on the back of booming US energy economics, the country will become an 'undisputed world leader in oil & gas production’.This increase in petrochemical production is fuelling significant demand for storage in key production regions. A good portion of this production capacity is being added in Louisiana, which makes the New Orleans area an attractive option for storage.Stolthaven New Orleans is strategically located on the 80th mile marker in the Mississippi River and it is the independent terminal closest to the mouth of the river. With 2.1 million barrels (334,869 m3) of storage spreadover 85 tanks, the facility is used for exports and imports as well as domestic distribution.In an interview with Tank Storage Magazine, general manager Captain Philip Watt says that the facility’s location is ideally suited to capitalise on current and new production levels as well as provide a more attractive delivery point.

Oil market eyes November Iran sanctions hiatus

Nnamdi Anyadike examines what effect the US withdrawing from the Iran Nuclear Deal will have on global oil markets and its impact on global trade flows The withdrawal by President Trump’s Administration’s from the Iran Nuclear Deal, also known as the Joint Comprehensive Plan of Action (JCPOA) on May 8, has reverberated around the world.The administration has demanded that all of Iran’s current oil consumers completely eliminate their Iranian oil imports, by no later than November 4. The US State Department director of policy planning Brian Hook said the goal is to increase pressure on the Iranian regime by ‘reducing to zero’ its revenue on crude oil sales.But Iran is one of the ‘giants’ of OPEC. It produces close to 4.5 million barrels per day (bpd) of crude oil and according to most recent data it currently exports 2.7 million bpd of crude oil and condensates a month. So, the decision taken by Trump, much against the advice of the other parties to the Iran accord, to re-impose sanctions on Tehran was inevitably going to provide the market with a shock to its system.Indeed, the announcement by Trump – along with earlier political instability in Venezuela – was a twin blow to the market. And the effect of this ‘double whammy’ has been a rise in crude oil prices to over $70 a barrel.

A new name in Cushing

Getka Energy – a crude oil logistics provider backed by an initial $250 million growth capital commitment from EnCap Flatrock Midstream – has ambitious plans for its latest purchase in Cushing, Oklahoma In the tank terminal industry – location and connections matter. These two principles guided executives at newly formed Getka Energy to purchase the former Pacer Energy Terminal in Cushing, Oklahoma.The 28-acre properly contains crude oil storage tanks and several LACT units. More importantly, it is connected to the Enterprise Products Partners’ Cushing Terminal via pipeline. Formed in early 2018, Getka’s founding partners, CEO Dariusz Cichocki, CCO Clete Straub and COO Matthew Turner have more than 50 years of combined energy industry experience. Previously, the trio spent time working together at Enbridge Energy Partners where they focused on the commercial development of storage and pipeline systems.And they have ambitious plans for their latest purchase. They first plan to upgrade the terminal to allow for increased throughput and delivery into the Enterprise terminal and other planned interconnections.

Unleashing the potential of American energy

Since President Trump released his America First Energy Plan at the beginning of 2017, the country has increased oil and gas production & has seen regulatory burdens reduced. John B. King, partner at Breazeale, Sachse & Wilson examines the effect this plan is having on the country’s energy markets The Trump Administration has made it clear that it seeks to unleash the potential of American-produced energy. To that end, it has taken actions on a variety of fronts to encourage production of oil and gas and decrease regulatory burdens on the industry. AMERICA FIRST ENERGY PLANPresident Trump has issued a number of pronouncements regarding energy production. On his first day in office, January 20, 2017, the America First Energy Plan was released. Essentially, the plan is a blueprint for future action in order to ‘maximise the use of American resources, freeing us from dependence on foreign oil’.It declares that the industry has been ‘held back by burdensome regulations,’ such as the Climate Action Plan and Waters of the United States Rule, and pledges to eliminate these and other ‘harmful and unnecessary policies’.Further, the plan recognises the ‘$50 trillion in untapped shale, oil, and natural gas reserves,’ and promises to ‘embrace the shale oil and gas revolution to bring jobs and prosperity to millions of Americans’.

Storage for the US's largest refining market

Seabrook Logistics – a joint venture by LBC Tank Terminals & Magellan Midstream Partners – is adding 700,000 barrels (111,000 m3) of crude oil & condensate storage in response to growing demand for midstream infrastructure in the Houston Gulf Coast The surge in crude oil production in the Permian Basin and other prolific regions has increased demand for crude oil storage and export capabilities in the Houston Gulf Coast hub.In addition to increased domestic production, the expansion of the Panama Canal and the growth of US exports hassignificantly opened up the Houston market and opportunities for storage operators in the region.Seabrook Logistics, owned jointly by subsidiaries of Magellan Midstream Partners and LBC Tank Terminals, has announced plans to build 700,000 barrels (111,000 m3) of additional crude oil and condensate storage as well as a new Suezmax dock with up to a 45-foot draft and 400,000 barrels per day of dock capacity.The facility in Seabrook, Texas currently has 2.4 million barrels (380,000 m3) of crude oil and condensate storage along with an Aframax dock with up to a 45-foot draft and 300,000 barrels per day of dock capacity. It is connected by pipeline to Genoa Junction, which provides access to crude shippers utilising the extensive Magellan Houstoncrude oil distribution system.

Expanding the US global market share

The steady crude oil production growth in North America has heavily incentivised operators to invest in new capacity construction. Genscape’s Dylan White looks at how Texas crude storage construction forges ahead as the US expands its global market share North American crude markets experienced their share of volatility in recent years. Between drastic price fluctuations, everchanging geopolitical dynamics and production growth leading to transportation constraints, there have been few constants. However, amid an industry plagued by uncertainty, one trend persisted: the network of crude infrastructure in North America continued to expand. This remains especially evident through the ongoing buildout of crude storagecapacity in Texas.Following the crude price crash in late 2014, a long-lasting contango structure in the short-term crude contracts and ensuing high demand for storage heavily incentivised the new capacity construction. However, construction projects persisted through the first half of 2018 despite contracts switching primarily to a backwardation structure. The trendcontinued as record-high US production and growing export volumes necessitated greater infrastructure to accommodate higher flows.Various forecasts expect steady growth in North American crude production, and planned projects suggest that many companies are committed to investing in the increased supply. Largescale infrastructure expansions are likely to continue as the US further establishes itself as a major player in global crude markets.

Trade war questions temper US midstream sector growth plans

Paul Wiseman reports on how demand for midstream infrastructure in Texas is fuelling a series of construction projects,plans to develop VLCC infrastructure and the impact looming trade wars are having on the industry With rebounded oil prices boosting production, especially in the Permian Basin of Texas and New Mexico, midstream companies from tank and pipeline providers to shipping ports are flooded with expansion opportunities. Normally this news would set sector leaders to dancing in the streets.But with looming trade wars potentially affecting everything from imports of pipeline-grade steel to exports of crude, LNG and refined products, that joy is on hold. The mid-August announcement that Chinese Vice Commerce MinisterWang Shouwen would meet in Washington with US Treasury Department Undersecretary for International Affairs David Malpass has aroused hope for those in growth mode. This would be the fourth round of formal talks in 2018, the first since June.If fully implemented, a 20% to 25% tariff would add significant costs to pipeline construction. However, experts believe construction will continue due to mounting production backlogs in Texas and in Alberta, Canada. ‘Certainly, the steel and aluminum tariffs are a big problem for the US oil industry up and down,’ says Kenny Stein, director of policy research for the Institute for Energy Research in Washington.‘For pipeline manufacturers, for guys putting steel down the hole – it raises costs for everybody at a time when there are already pipeline bottlenecks, rig crews are getting more expensive and that sort of thing.’And, at least for the Permian, it’s not just about oil pipelines. ‘There’s not enough crude pipeline capacity, but there’s also not enough gas pipeline capacity. And no one wants to build them because gas prices in Texas are completely in the toilet,’ says Stein.

Safe & productive solutions for tank cleaning

Investing in vacuum truck equipment that removes wet and dry materials safely, efficiently and with the proper filtration can help increase productivity and reduce overall labour, maintenance and operating costs Vacuum trucks are widely used in tank cleaning, spill recovery and material transfer applications in petroleum refineries to recover waste materials – sludge, chemicals, hydrocarbons, water and mixtures of these chemicals – and transporting these materials offsite for disposal or recycling. While the potential for fire, explosion and chemicalexposure hazards exists during such applications, these risks can be controlled through the safe operation of vacuum trucks.Day in, day out, every petroleum refinery around the world is challenged with providing a safe working environment while also ensuring that the vacuum truck equipment used in their facility meets the requirements to safely vacuum different materials. Investing in a vacuum truck that vacuums wet and dry materials safely, efficiently and with theproper filtration can help increase productivity and reduce overall labour, maintenance and operating costs.

Ground improvement plays supporting role for storage tanks

When tanks are constructed and put into service, some amount of settlement occurs. This settlement is dependent upon the tank diameter, the height and weight of the product being stored, and the properties of the underlying soils. Settlement becomes problematic when it exceeds the tolerance for the tank or the lines connected to the tank.Large-diameter, above-ground storage tanks are often located near waterways and coastal plains in areas with soft, compressible ground or uncontrolled fill that cannot adequately or safely support the heavy loads that tanks pose. Tank owners must also be aware of the possibility of bearing capacity failure that can occur when underlying soils cannot carry the load from the tank, and the ground shears or ruptures, causing either a rotation of the tank or punching of the tank into the ground. While this type of failure is rare, the consequences can be disastrous.Traditional methods for supporting tanks at sites with problematic soil conditions have typically included removing and replacing the soft ground or installing deep foundations, such as piles with a concrete mat, as support systems. However, removing and replacing soft ground with compacted backfill can be impractical and cost prohibitive when theimpacted ground extends beyond a few feet, if contamination is present, or if it is necessary to excavate below the groundwater table.

The RFQ - the key to a successful tank project

If you are working on a project that requires a storage tank, there are a number of factors to consider. Complex projects may require different contractors handling various scope items, making the bidding process complicated and possibly overwhelming.Front-end preparation, including RFQs, can have a tremendously positive impact on the success of a storage tank project. A tank project starts with a need. Translating that need into an effective Request for Quote (RFQ) is the key to getting proposals that provide competitive, accurate solutions to specific tank challenges in a format can bereviewed and evaluated effectively. Providing the right information to a tank contractor allows for an accurate and competitive estimate and thorough proposal - the first step toward a well-defined contract and smooth project.