A different demand outlook
The emergence of new technology as well as greater legislative emission controls will create a very different supply and demand picture for oil and gas markets, according to Charles Daly Forecasts are usually wrong or lucky. Therefore, any forecasts or predictions presented here are generated from known published sources and not by the author.At the time of writing, the global oil industry is totally unable to be certain of where demand is going and how it is going to be affected by changes in technology and geopolitical events.GEOPOLITICAL CLIMATEPresident Trump has thrown several curve balls into the system and these are all as yet unknown in their future outcome. The most significant oil-related move is the re-establishment of sanctions on Iranian exports of crude oil.These exports have been running at up to 3.5 million barrels per day (mmbd). There will always be leakage in any sanctions regime, but it might be fair to estimate a loss of around 50% of this supply. How and when this will be made up we do not know. What is evident is that the oil price has not yet reacted significantly to this change.The other areas of potential disruption are Venezuela and Libya, both of which are prone to having oil supplies disrupted. As a counter balance Saudi, Russian and US production increases are likely to cover the shortfall. The current proxy war being fought between Saudi Arabia and Iran could flare up in the Gulf if the Iranians find their oil market share being usurped by Saudi oil.The current boycott of Qatar by the Saudis and their allies in the GCC is also causing some disruption, albeit only locally in the Gulf.
A next generation storage terminal
Dutch-based Alpha Terminals is building a new liquid bulk storage terminal in North Sea Port to prepare for significant changes in the European market Over the next decade, the European energy market will experience significant changes that will alter demand for the type of logistics infrastructure needed in the supply chain.Wide-ranging regulatory changes, including the IMO global sulphur bunker fuel cap of 0.5% as well as efforts to reduce greenhouse gas emissions from ships, will drive demand for emerging liquid product blends as companies look to adapt to this new legislative environment. This is in addition to a growing demand for more renewable sourcesof energy.Against this backdrop, Alpha Terminals, established in 2017 and part of Swiss investment company PSB Alpha, isconstructing a new liquid bulk storage terminal in the Vlissingen port area in North Sea Port.The €250 million facility will have a storage capacity of 500,000 m3 spread across 34 tanks, which will store liquid bulk products ranging from chemicals and oils to oil products and future generation sources of energy such as ammonia.It will provide an extra supply of between five to seven million tonnes of liquid bulk per year. In an interview with Tank Storage Magazine Mike van Croonenburg, director at Alpha Terminals, says that the company drew on its extensive experience in the industry when deciding to build the facility.
A new energy chapter
Positive supply and demand dynamics for oil & gas are supporting the need for significant investments – of almost $11 trillion – across the entire industry up to 2040. Jasmin McDermott reports Balance and stability have returned to global oil markets, bringing a greater degree of optimism to the industry, as well as an increase in investments.OPEC’s 2018 World Oil Outlook paints a picture of sustainable stability and heralds a new chapter in the industry, driven by the organisation and its non-OPEC partners.The 412-page document examines how developments in the global economy, energy demand, oil supply and demand as well as policy and technology developments and environmental considerations are having an impact on the industry.Thanks to strong growth in emerging and developing economies, the size of the global economy in 2040 is estimated to be more than double that of 2017, with China and India playing a significant role in this growth.This, coupled with an expanding global population and efforts to reduce energy poverty, means that energy demand is expected to increase by 33% between 2015 and 2040. The document’s Reference Case projects energy demand increasing from 274 million barrels of oil equivalent a day (mboe/d) to around 365 mboe/d in 2040, with an average annual growth of 1.2% per annum. Almost 95% of this increase is accounted for be developing countries, with an annual average growth of 1.9%.Primary energy demand in China and India is the most significant contributor to overall energy demand growth, with energy demand in developing countries overall projected to increase by almost 86 mboe/d between 2015 and 2040.
Adding value to niche terminals in Europe
Newcomer Atlha Terminals wants to create a European network of up to ten niche storage terminals that play a crucial role in the regional supply chain Strong and stable economic conditions coupled with a flourishing petrochemicals market and healthy energy demand makes Europe an attractive location to develop and invest in storage terminals.Following strong oil demand growth over the last three years, Europe is expected to continue its growing demand for oil, albeit at a slower rate, driven by the road transportation sector, oil used in industry as well as residential and agricultural sectors.Additionally, petrochemical demand is also flourishing in Europe thanks to an uptake in production by low cost producers. This creating a wealth of opportunities for those in the storage sector as new production investments come into the market.Private-equity backed newcomer Atlha Terminals recognises the potential to adding more value to Europe’s mature energy infrastructure and is embarking on identifying existing facilities where their skills and expertise can further improve the function of that facility in the regional market.Created two years ago, the Netherlands-based company’s business premise is to invest in niche terminal assets through acquisition as well as greenfield development.Earlier in 2018, the company secured the exclusive rights to develop a liquid bulk storage terminal in the port of Duisburg, Germany. The 75,000 m3 facility will provide storage for glycols, vegetable oils, ethanol as well as gasoline and gasoline components across 20 tanks.
IMO: how will key international bunkering hubs survive?
With less than 14 months until the International Maritime Organisation’s sulphur fuel cap regulation is enacted, reducing the sulphur content of bunker fuel from 3.5% to 0.5%, the industry is starting to prepare for this momentous change.While a small minority of vessels are installing scrubbers, others are looking to other fuel alternatives, including certain middle distillates, marine gasoil, low sulphur fuel oil and even LNG.With the rate of non-compliance estimates varying from 7% to 30% amongst some of the industry’s leading organisations, there still remains a great deal of uncertainty as to how IMO 2020 will play out in global markets.Tank Storage Magazine examines how this regulatory change will affect the world’s three largest bunkering hubs, with insights from Argus, Platts and Shipping Strategy…
Market fundamentals impact storage opportunities in Singapore
As one of the most crucial tank storage hubs in the world, Singapore and nowadays the greater Singapore region play a fundamental role in global trade. South East Asian countries have experienced tremendous economic growth over the past decades, and this upward trend even had an impulse after the global financial crisis in 2008. Going forward, trade imbalances, regulations and newly built capacity will continue to influence opportunities in the tank terminalindustry in the greater Singapore region. REGIONAL DEMAND FOR OIL PRODUCTS REMAINS STRONGContinuously growing economies have driven supply and demand for oil products in Asia, with the Indian and especially Chinese economy increasing their production substantially. China, India, Japan and South Korea are the region’s largest suppliers of oil products, with China more than doubling any other country’s output in 2017. South East Asian refinery output primarily consists of diesel and gasoline, accounting for 44% and 26% of the region’s total output in 2017 respectively. The production of both products grew rapidly over the past decade, more than any other main refinery output, while demand for both products in the region has increased gradually over the last decade.South East Asia has surpluses of diesel, gasoline and jet-kerosene, meaning it produces more than it consumes of these products. A higher surplus generally leads to higher exports of a product, implying an increased demand for temporary tank storage capacity. Deficits exist for fuel oil, naphtha and LPG, meaning South East Asia has to import these products from outside of the region. Singapore’s tank terminal industry has been benefiting from this situation for a long time.
Russia dominates Baltic oil & gas supply
The countries that have shorelines along the Baltic sea are diverse in size, economic might and of course energy use and storage but most of them have one thing in common: a strong reliance on Russia for much of their oil and gasneeds. Vaughan O’Grady reports Of all the countries that have shorelines along the Baltic sea, Germany has perhaps the most developed systems for internal transport and storage of oil. But it is also proposing an Energiewende, a planned transition to a low-carbon, environmentally sound energy supply with the promotion of alternatives to petrol such as electric cars.Does government promotion of this transition mean a diminished market for oil in Germany? Well, electric cars are not yet the norm.Frank Schaper, managing director of Germany’s UTV Unabhängiger Tanklagerverband e.V (Independent Tank Storage Association), says: ‘Of course you see increasing numbers of charging columns and stations, but the absolute numbers are still very small.’However, despite the Energiewende as well as the ban of older diesel cars in big cities such as Hamburg, Stuttgart and Frankfurt, Schaper says that even diesel remains relatively healthy.In fact, the figures paint a fairly encouraging picture for fossil fuels in Germany. Based on the yearly report of the Mineralölwirtschaftsverband eV (MWV), the association representing the oil industry in Germany, the 2017 German consumption of gasoline was 18.3 million tonnes (2016:18.2), of diesel 38.7 million tonnes (37.9) and of heating oil 15.8 million tonnes (15.8). Jet fuel (Jet A1) consumption was 10.0 million tonnes compared to 9.2 million tonnes in 2016.Germany is still a net importer of middle distillates and a net exporter of gasoline. The production of middle distillates – including jet fuel – in 2017 was 51 million tonnes (against a consumption of 56 million tonnes). Gasoline production in 2017 was 21 million tonnes (against a consumption of 18 million tonnes).As for what this means for storage, Schaper explains: ‘The effect on the tank storage sector is relatively small and mainly affects the terminals along the North Sea and Baltic coast and to a lesser extent the smaller inland terminals along the Rhine.‘The main function of the German tank storage sector is the distribution business and participation in the compulsory stock obligation.’ Contango and backwardation are therefore much less relevant here than in some markets.
Unique spiral construction method deployed for Western Europe's largest tank terminal project
The port of Antwerp is currently experiencing the construction of a mega tank terminal with a total storage capacity of 750,000 m3, intended for the storage of petroleum and petrochemical products. This investment is the largest tankstorage project in Western Europe in recent years. To this end, Upgrade Storage – the company building the tanks – is using a unique method, known as the spiral construction method.Engineering company Upgrade Storage, sister company of Upgrade Energy based in Drongen, near Ghent in Belgium, handles energy projects and chiefly focuses on medium sized businesses.Led by owner and CEO Raf Vermeire, the company operates in several countries, including Poland, Croatia, Turkey, Hong Kong, the Philippines and South Africa. Vermeire, who previously worked at Stokota, a Belgian builder of road tankers, soon saw the potential of diversifying the business to include the construction of tanks and silos for liquids and dry bulk.In 2014, Upgrade Storage was incorporated with CEO Johan Reynvoet as the driving force. He managed to get several of his former colleagues on board, which enabled the business to get off to a flying start. ‘Initially, westarted out with repairs and the refurbishment of tanks, replacing tank bottoms and piping structures and such like,’ says Reynvoet.
After Aliso: why benzene needs to be the industry's next casulty
Every business involved in the oil and gas industry should be investing in the latest gas detection expertise according to Steve Billingham, CEO of Duvas Technologies, who believes a current lawsuit in the US will have significant repercussions for the global petrochemical sector Benzene is a highly dangerous, carcinogenic compound. It’s used both domestically and industrially and contributes to the 5.5 million deaths caused by air pollution each year. Although frequently referred to as the ‘next asbestos’, benzene has yet to attain the level of global awareness that its predecessor now enjoys. This needs to change, and fast. KNOW THY ENEMYResearch from the World Health Organisation (WHO) has identified benzene exposure risks from numerous occupational and domestic products, such as motor fuels, solvents and crude petroleum. Exposure can be exacerbated by high-risk industrial activities, such as processing petroleum products, coking coal or producing toluene, xylene and other aromatic compounds.According to statistics from the Department of Health and Human Services in the US, more than 238,000 people are occupationally exposed to benzene every day. High levels of the chemical have been found in 1,000 of the 1,684 most serious hazardous waste sites in the US. Traces have also been identified in car exhausts, tobacco smokeand household detergents.
A new approach for accurate & reliable storage tank leak monitoring
Despite the fact that several different leak detection technologies are available, operational experience has shown how difficult it is getting reliable leak detection from a sensing system.Several pipeline studies   based on real life pipeline incidents, have highlighted that conventional leak detection systems in place today on existing pipelines may fail to provide satisfactory pipeline monitoring.In particular, an examination of ten years’ worth of US federal data from the ‘Pipeline and Hazardous Materials Safety Administration’ (PHMSA), provided in a news report , has highlighted that when analysing 960 pipeline spills on the US network that took place over a ten-year period, only 5% of them were spotted by leak detection systems in place.Moreover, only 20% of the ‘very significant’ leaks (i.e. larger than 1,000 barrels) were detected by monitoring systems.Similarly, major leak incidents on storage tanks have been reported even more recently.
Revolutionising tank inspections with drone technology
Recent advancements in robotics have opened up new inspection solutions that are driving major efficiencies and have created a step-change in internal tank inspection safety.Storage tanks require integrity inspections at regular intervals, particularly as they become older. An efficient inspection programme means degradation can be monitored and addressed before failure and leakages occur.The repercussions of failures can be great; product loss, environmental contamination, risk to the safety of personnel or complete asset failure.The external surface of storage tanks can be subject to a range of variants that cause issues, such as weather conditions, while a storage tank’s internal surface can become corroded and problematic due to its contents, which can include materials like oil, chemicals or wastewater.This problem is also prevalent onboard FPSOs and tankers where tanks contain huge volumes of oil.Tank owners around the globe are required to inspect these assets, to an industry standard determined by the asset type, for integrity and damage assessment. Typical access solutions for these types of inspections involve rope access, elevated work platforms, scaffolding or rafting (for tankers and FPSOs). These techniques can present various issues though, such as working at height for sustained periods of time, in hot, dark, enclosed spaces. Inspections can also be lengthy, for instance up to seven days to inspect a cargo oil tank, which also incurs mounting costs.
Self-expanding firefighting foam - a new approach to fire protection
Throughout the history of bulk liquid storage tank firefighting, one of the most important aspects for the successful extinguishment of a rim-seal or full surface fire is time.Traditionally, low expansion foam systems have applied foam solution via a fixed, semifixed, or over the top methodology (manual).Each methodology has its pros and cons, but their commonality is a delay in providing quality (i.e. well proportioned) foam solution to the surface of a burning liquid immediately. That is, there is a delay between the premixing of water and foam concentrate that could last minutes before well-proportioned foam solution is applied effectively to the liquid surface of a burning storage tank.A conventional low expansion foam system (i.e. connected to a water supply, fire pump, foam proportioning equipment) have failure modes, which could lead to further delays in the introduction of foam such as a faulty pump, bad foam concentrate, inadequate proportioning, impairment issues, etc. to the surface of a tank. This leads to the question; is there an technology that can provide immediate, quality, well- proportioned foam solution to the surfaceof a burning storage tank?After extensive research related to pre-engineered fire protection systems, Orcus Fire discovered Self Expanding Fire Fighting Foam (SEFFF), and found that it had been utilised in Europe, the Middle East, and Africa for close to 20 years. The technology was birthed at the scene of tragic accident, where a woman perished in a vehicle fire after a head-on collision with a farming tractor. The initial fire was extinguished with dry-chemical powder, but due to the high heat output, the fire reignited. Water and foam resources were called in, but by the time it arrived and deployed, it was too late.The challenge was simple in nature but had never been tested on a large scale before. Is it possible to store a pre-mixed foam solution in a vessel/tank, where it could be deployed to fight a fire via fixed or mobile applications at the turn of a valve?After three years of research and development, SEFFF was created, and its initial use was geared towards emergency response, using fire extinguisher sized devices to help fire fighters and first responders at the scene of incidents involving Class A and Class B fires.
Are you under pressure to manage overpressure?
A risk-based approach to managing legacy systems at risk of overpressure is a pragmatic solution, explains EEMUA’s technical executive Jeevan Abraham A significant proportion of UK plant infrastructure and equipment was fabricated, built and installed in the 1950s and 1960s. Piecing together their history today is like pulling together a big puzzle that is missing some key parts.Documents may not be available. Installation and commissioning details may have been lost as organisations have merged, and plants have changed operators. The plant itself may have been repurposed, and today be used for an application for which it wasn’t originally designed.Legacy systems can be defined as those where the available records fail to fully define the system being protected. There may be a lack of information on the system’s design pressures and tolerances, construction materials, and the overpressure protection mechanisms in place.There is a risk of legacy systems exceeding code allowable overpressures. In these situations, a risk-based process may be a beneficial approach for managing potential risk and ensuring code compliance.
Process safety & operational risk management feeling the squeeze
Process safety & operational risk management in hazardous industries report reveals the effect the oil price down turn and reduced budgets are having on safety performance The 2018 edition of Petrotechnics’ process safety and operational risk management report explores how far the oil price downturn and knock-on budgetary squeezes are affecting safety performance; the real-world experience of safety and risk and where that exceeds – or falls short of – expectations; the relationship between safety culture, human factors, technology and engineering practice. The second part of the report will look at technology issues in more depth. THE IMPACT OF THE OIL PRICEPerhaps not surprisingly, the price of oil continues to be a contributing factor to process safety risk: 72% of survey respondents believe the oil price has had a moderate or significant impact on process safety risk, while only 15%feel it had very little impact. These findings reflect the 25th edition of Marsh & McLennan’s 100 Largest Losses Report, which was published earlier in 2018.In the 2018 report, Marsh & McLennan’s authors call back to their 2016 edition, in which they commented on ‘the historical correlation between low oil prices and loss trends in the hydrocarbon industry’.
Construction opportunities for the US oil & gas market
A full-service marine contractor, Weeks Marine serves the industry as a one-stop shop for marine construction projects.The family-owned company, headquartered in New Jersey, with regional offices in Houston, Texas and Covington, Louisiana, has played a vital role in the global transmission of energy for almost a century. It builds the ship and barge terminals that are used in the marine-based transportation of LNG, LPG, ethane, crude oil, gasoline, diesel, distillates as well as dry bulk cargoes. Weeks Marine also constructs marine pipelines and builds barge-loading facilities for intracoastal and river transportation of energy products.In the face of more stringent regulatory requirements, increasing project costs and more complex project requirements, the company continues to invest to ensure it stays ahead of the latest challenges.Tank Storage Magazine speaks to Chris Hynes, senior vice president, construction division, at Weeks Marine to find out more about the developments the company has planned as well as how it is preparing itself for emerging opportunities in the construction sector.
Avoiding relief chatter on LNG storage tanks
The design of pressure relieving systems for cryogenic storage tanks can be complex and challenging to safely provide one of the last barriers of safety defense, as shown in figure 1. Pilot-operated pressure relief valves on LNG low-pressure storage tanks are commonly expected to operate as stable as their high-pressure counterparts. Operators deciding to install pilot-operated pressure relief valves rely on stability and low leak rates close to set pressure to explain their preference for this class of devices over spring-loaded valves. Pilot valves require machining of capillary ducts and small annular lateral regions to function properly. To avoid blockage of the pilot, gaseous flow through the pilot-operated relief valves should be ideally particulate, soot and droplet-free.Though good engineering practice on the correct application of pilot-operated devices are available, such as in (API-520, 2013), we look at the working principle of pilot-operated valves at first, then analyses the several types of instability associated to bad design. Finally, the authors present the results with a dampening system as a good solution to prevent instability.
Embracing the digital transformation
The downstream oil and gas industry is undergoing significant changes. Bit by bit, the entire supply chain is being digitalised. This bears enormous potential; but it also comes with a seemingly steep entry threshold. Thomas Ernst, managing director at downstream process specialists Implico, discusses how picking the right hardware can help storage terminal operators to get their digital journey started on a budget. Most tank farm or terminal operators will have stumbled upon the terms ‘digital transformation’ and ‘automation’ more than once in recent times. There is no denying it: the oil and gas industry is at a turning point. One after another, many of the tasks and processes that were previously done by hand are now being committed to softwareor even artificial intelligence. This has several advantages. For starters, it makes the affected procedures more timesaving and efficient. It also ensures higher transparency and security. While data noted down via pen and paper is always prone to human error, information gathered and processed automatically is a lot less vulnerable to unwanted derivations. Plus, it can be uploaded to the cloud and made available for further processing in real-time.Despite the tremendous benefits that a digitally optimised supply chain has for oil and gas companies in general as well as storage terminal operators in particular, evolving from analogue to digitalised is a big hurdle for many businesses. Phrases such as ‘Internet of Things’ or ‘Artificial Intelligence’ have a nice ring but they can also be a little intimidating; especially when you do not yet know where to start and which innovation to tackle first. At this point in the decision-making process, tech-savvy partners like Implico come into play. On the one hand, they know which competitive advantages a well-implemented process automation can produce for their clients. And on the other hand, they have a long track record of supporting downstream companies in the implementation of pioneering technologies in their daily routine.
Spark from isolated hose ignites combustible powder atmosphere
Static electricity is often perceived as an invisible risk. Static electricity provides an ignition source for serious fires and explosions that could occur during everyday operations involving the handling and processing of flammable products.A company supplying aluminium powder had an order cancelled when the bulk truck transporter carrying the powder was on its way to a railcar hopper loading station. The truck driver was instructed to return the aluminium to the plant from where it was manufactured.As this scenario had never occurred before there was no standard operating procedure in place to offload the aluminium from the truck back into the production facility. Shortly after the operators had worked out how to overcome some practical challenges for moving the powder back into the plant, an explosion occurred which propagated throughout the plant.On return to the plant, it was noted that there was no direct loading point for the finished powder to be injected back into the production stream directly from the truck. A decision was taken to convey the powder into the pneumatictransport system entry point of the plant using the 3” hoses on the truck.