Investing in the global energy supply chain
Boasting storage and midstream investments in key energy markets, Prostar Capital reveals more about its plan to grow its storage infrastructure portfolio and its future business investment strategy In just six years, investment manager Prostar Capital has made a name for itself in the global energy and storage market with investments in the Middle East, Asia and the US.Established in 2012 to make mid-market investments in the energy supply chain, primarily to meet growing Pan-Asian energy demand, the company first entered the storage market in 2013 by purchasing a 19% stake in the Fujairah Oil Terminal during construction.The 1.2 million m3 facility is one of the largest independent crude oil terminals in the region and is located in the Port of Fujairah, a key energy trading hub. Subsequently the company made an additional investment in 2015 to bring its total equity stake in the facility to 40%.In 2017 the company made investments in gas gathering and gas distribution assets in the US and South Korea respectively.
Oil price volatility haunts energy industry
Nnamdi Anyadike examines how the oil price volatility in 2018 had an impact on the oil & gas mergers and acquisitions market and what could be in store for 2019 Merger and acquisition activity in 2018 was a clear beneficiary of continued oil price volatility as oil and gas companiesstruggled to survive through one of the most tumultuous times on record.Data and analytics company GlobalData recorded 10,000 M&A deals executed by oil and gas companies in the five years to November 2018 with more than 60% of them completed in the troubled upstream sector. Falling revenues and rising debts were identified as the key drivers compelling oil and gas companies to realign their strategic objectives and reshape their portfolios.One outstanding feature of the deals last year was the role of the oil majors. Total, ExxonMobil, Chevron, Equinor, and Shell, were among those involved in deals to acquire companies and assets at attractive valuations, while at the same time offloading the ones that could impact profitability. The shale patches in the US and the oil and gas fields in the North Sea continental shelf featured prominently in these upstream deals. Looking forward, upstream companies such as Felix Energy, Endeavor Energy Resources and Laredo Energy; and midstream players namely American Midstream Partners and WhiteWater Midstream have been identified as potential acquisition targets for oil and gas industry majors over the next two years.
The shape of things to come: crude oil futures, the curve and contango
Gerrit Venter, senior research manager at Wood Mackenzie, plots how the shape of the forward curve for crude oil has changed over the last 15 years, notable moments in oil price history with the 2008 economic crash and the future role the oil futures market has in mitigating price risk Launched in the 1980s during the rise of commercial North Sea crude oil production, the Brent crude oil futures contract is the global benchmark for pricing crude oil. Priced in US dollars for standardised 1,000-barrel units of specified quality characteristics, the contract allows buyers and sellers to lock in a price for crude oil up to 96 months (M1 to M96) in the future.Another major oil price quote, West Texas Intermediate (WTI), is a light sweet crude benchmark used to price the vast majority of oil in the US. In contrast to Brent, the price settlement point for WTI is deep inland at Cushing, Oklahoma. These two prices are hence subject to somewhat different fundamental supply and demand forces, making the Brent-WTI spread an important driver of relative value for oil producers and refiners in the US versus Europe and the rest of the world. As the benchmark with greater direct global influence, we will focus on Brent.Oil futures are part of the expansive group of financial instruments known as derivatives, as their value is derived from the underlying physical crude oil commodity.
Port of Rotterdam: The investment machine for North Europe
Europe’s largest liquid bulk port invested more than €300 million in infrastructure improvements in 2018 to enhance its attractiveness for global trade & business. Executives speak to Tank Storage Magazine about why it is a key storage location and what the future holds For many years, the Port of Rotterdam has been the leader in the throughput and storage of crude oil in NorthwestEurope and is one of the leading trading hubs globally for liquid bulk products.Being one of the leading international liquid bulk hubs, the port is a key focal point in Northwest Europe for production and trade and is the heart of several key refineries such as Shell, BP, ExxonMobil, Gunvor and Vitol. It is also the price benchmark location for Dated Brent CIF and for several oil products and chemicals.Coupled with its central location in Europe, strong maritime access as well as the transshipment opportunities and hinterland connections to and from the rest of Europe, it is not surprising that many of the leading tank terminal operators globally have facilities here.
Global intel for a global economy
In an increasingly volatile global economy, the ability to understand what’s happening on the ground in the world’s largest oil producers is not only incredibly difficult, but also necessary for making confident business decisions.While technological solutions continue to evolve in an effort to remove dependence on ground intelligence in opaque countries such as Iran, Iraq, and Venezuela, there are only a few innovations offering detailed views into daily oil production levels.In late 2018, Genscape, one of the leading providers of energy data and insights, introduced a new level of intelligence, which harnesses satellite flare data to estimate daily oil production levels for target countries. Genscape experts use this data and combine it with a proprietary algorithm, developed using fundamental oil research and machine learning, to provide production estimates for over 31 million barrels per day of global oil supply.
Brexit: The challenges facing the UK storage sector
As the deadline for the UK’s withdrawal from the EU approaches, Tank Storage Association executive director Peter Davidson outlines several key areas of the UKs business relationship with the EU that need to be immediately addressed to ensure a frictionless trade border going forward At the time of writing EU leaders had approved the agreement on the UK’s withdrawal and future relations with it, however UK Parliament did not share that same view.In fact, it has been a turbulent few weeks in UK politics – with the largest defeat of a government proposal in over 100 years, not to mention a vote of no confidence in the government. With 432 votes to reject the deal proposed (against 202 to ratify it), the view of Parliament cannot have been made clearer. There is much more work to be done, and little time to do it in and this position continues the uncertainty for business. The Tank Storage Association (TSA) cautiously welcomed the progress made with the EU at the end of 2018.But now it seems we will have to think again. For TSA members it is of most importance to ensure access to as frictionless a border with the EU and the rest of the world as possible following March 29. The association does not believe this is possible without a deal in place.
Evolving France's petroleum product supply chain
Created to satisfy France’s strategic oil reserves obligation, Géosel offers storage solutions for a diverse range of customers and is now looking to enhance its range of services, pipeline connections and increase the products it stores With more than nine million m3 of storage capacity for petroleum products, Géosel is one of the largest operational and strategic petroleum product storage sites in Europe.Located in the heart of the regional park of Lubéron in the south of France, Géosel owns 30 salt caverns spread over eight hectares of land and each cavern is dedicated to storing specific quality grades including naphtha, gasoline, ultra-low sulphur diesel, gasoil 0.1% and crude.In addition, it also owns three pipelines from Manosque to Fos/Lavera area, which transport and supply hydrocarbons to its various customers.The company, originally a joint venture between oil refiners, was established in 1967 to satisfy France’s strategic oil reserve obligations.Since then it has evolved to become a leading independent storage operator for petroleum products, serving both French and wider European markets. Transport Stockage Hydrocarbures – a consortium between EDF and Ardian – became the majority shareholder of the company in 2015 alongside Petroineos and Total.Its pipelines network is well linked and this allows the stored product to be widely supplied. Products can be sent to SPSE and SPMR pipeline, DPFos Fos/Lavera harbour as well as petrochemical facilities located in the same area.
The calm before the storm?
Although it is getting harder to predict oil, gas and petrochemical production and usage trends, there are certainly several key developments in the long term that will affect the storage sector. In addition, the outlook for storage in the short term is starting to look brighter. Vaughan O’Grady reports Is the oil price quite as big story as some think? There’s certainly volatility but, as Carl Larry, a market development commodities analyst with Refinitiv (formerly the Financial & Risk business of Thomson Reuters) suggests: ‘We are coming closer to understanding fair value – that’s something we haven’t seen for the last 20 years.‘We’re now in that range of $45-$65 and that’s where oil is going to be. The trick now for all these oil producers is trying to understand how to make money in this small range.’ Storage price and profit concerns are slightly different. Christopher Haines, global crude oil analyst with Energy Aspects, says: ‘I think the most interesting development over 2019 will be in product storage and the actual space available, particularly for gasoline.‘Oil prices have been fluctuating, but for refiners (most of European storage) it is margins between oil and products that drive buying decisions.’ He continues: ‘European refiners have been leveraging the growth in light-sweet crude (particularly from the US); however, given higher naphtha yields in US crude, the European market is seeing moregasoline production.’
The evolution of managing major hazard risks
Following several high-profile incidents in the industry, major hazard risk management has been a key focus for the industry, however work is still needed to turn good practice into common practice. CoMAH chair Ken Rivers provides a downstream oil/chemical process industries perspective and explains why 2019 is the year of leadership in managing major hazard risks The chemical and downstream oil process industries deliver enormous benefits through the products and services they bring consistently to us all in everyday life and the added value they generate for the economy.However, the intrinsic hazardous properties of many of the substances involved mean that the sector has had to develop a strong focus on managing major hazard risks.It has had to because there is a long history of incidents that show that when things go wrong, people can get killed or maimed, significant damage may be done to the environment and can cause serious financial losses/business disruption and damage to reputation.Each of these high consequence/low probability incidents has led to valuable learning but at enormous cost. The Flixborough (UK) incident in 1974 and Seveso (Italy) in 1976 led to a new approach to major hazard regulation in the UK and Europe, whilst Bhopal (India) in 1984 at an American-owned facility sent shock waves through process industries in the US and showed how incidents can have catastrophic effects beyond the confines of an industrial site.More recently, the events at Texas City (US) in 2005 highlighted the criticality of corporate leadership and how personal safety is not a reliable indicator of major hazard risks. The Deep Water Horizon blow out (US) in 2010 showed that these risks had the potential to destroy one of the biggest international oil companies in the world.
New global guidelines for marine oil & petrochemical terminal design and assessment
There are over 5,000 marine oil and petrochemical terminals operating globally, with more being constructed every year.However, no internationally recognised standard exist to guide the planning and design of these vital assets. Equally important is the maintenance of these assets as they age in the often-aggressive marine environment. Properly designed and maintained terminals have been proven to serve their purpose reliably for over 50 years in service, without endangering the environment.Unfortunately, there are also examples of poorly designed and poorly maintained marine oil and petrochemical terminals, which can affect life safety, the environment, and the reputation of the industry in the event of an incident.The very nature of the marine oil and petrochemical trade is global, yet terminal design and maintenance requirements are inconsistent across international boundaries. This has led to conflicts, inconsistencies and potential safety concerns.In response to a recognised need for international guidelines, PIANC Report 153-2016 was published in 2016. The report, Recommendations for the Design & Assessment of Marine Oil & Petrochemical Terminals, provides guidance for both the design and assessment of marine terminals handling oil, products, and liquid petrochemicals. This is the first comprehensive global guideline focused on the design of such terminals.
Neutralising tank odours
Acrylex 55, a strong alkaline product developed by WVT Industries in Belgium, has been specifically developed for cleaning and neutralising various acrylates from storage tanks, scrubbers, trucks and containers.The ready-for-use solution is effective at cleaning and neutralising ethylacrylate, butylacrylate, methylacrylate and methylmetacrylate monomer.In an interview with Tank Storage Magazine Jil Teugels, product manager, says: ‘It is well known that strong alkaline products can be used for neutralising acrylates. However, just the alkalinity alone is not sufficient to have a complete neutralisation.’
The essential tool for every storage professional
Phil Myers, of PEMY Consulting, explains why the API standard 2610 is a must read for every owner, operator, engineer, contractor, inspector and supervisor in the tank storage industry Here’s a pop quiz; what is the American Petroleum Institute (API) standard 2610 all about? Probably few know the answer to this question or why API 2610 is a critical document for those in the oil storage industry.So why is this important now? One answer is that the 3rd edition of API 2610 was recently published. The weighty title ‘Design, Construction, Operation, Maintenance, and Inspection of Terminal and Tank Facilities’ leaves no tank stone unturned.Although the forward to the standard promotes API 2610’s raison d’être as environmental health and safety responsibilities cast upon the shoulders of terminal facility owners and operators, the real reason this document was created is not explicitly mentioned within the standard. To get back to the question of why API 2610 is important, wemust consider the origins which trace back to the ominous US Senate Bill S.1761 of the 102nd Congress (1991-1992) promoted by Senator Daschle and a few others.
Radar provides precise level measurement in LNG tank gauging systems
Håkan Jubel explains how the latest non-contacting radar level gauges meet the various challenges associated with accurately and reliably determining the level of LNG in full containment tanks Full containment tanks for storing LNG are large and complex structures with a typical capacity of up to 200,000 m3. They include an inner liquid containment steel tank, an outer concrete (or steel) tank for secondary containment control, and thermal insulation between the two to minimise liquid boil-off.The planning, design and construction of such technically advanced tanks requires significant investment, and payback times can be lengthy. For this reason, tank farm operators need to implement accurate and reliable tank gauging systems that will help to minimise operating and maintenance costs, thereby enabling a quicker return on investment.Level and temperature measurement technology forms a key part of tank gauging systems for LNG vessels. Obtaining reliable and precise measurements of the liquid level inside each tank is essential for inventory management and custody transfer purposes. Level and temperature are also measured for safety purposes, to prevent overfills. By monitoring level and insulation space temperature, it is also possible to identify leaks, helping to prevent product loss and potential safety incidents. Early detection of overfills and detecting leaks is also important in avoiding environmental incidents.
Industrial cybersecurity services: What it means for energy industries?
Advancements in the energy industry over the past few years have mostly been digital. Demand for real-time analytics to optimise efficiencies and enable better decision-making is ushering Industrial Internet of Things (IIoT) to the core of operating environments.Programmable logic controllers (PLCs), industrial control systems (ICS) and other operating technologies in the upstream, downstream and midstream industry applications are now networked to purposebuilt hardware and software for automating industrial space. The culmination of IIoT in industries has, however, outpaced the adoption of relevant cybersecurity solutions. As digital connectivity of industrial assets exceeds well over 50 million connected Supervisory Control and Data Acquisition (SCADA) devices, attack surfaces have grown more inexplicably than ever. Energy industries are currently the second most targeted industry for cyber threats. Storage terminals have been the victims of politically, financiallyand ideologically motivated sabotage in the form of cyber-attacks.
Automated tank cleaning systems remove dangers to humans
No man entry systems eliminate dangers of man entry to tanks, are very efficient and save money Whenever people enter oil and gas tanks, they run the risk of being exposed to toxic chemicals, physical hazards, radioactivity, infections and allergic reactions. However, the automated tank cleaning systems from Oreco solve these problems by eliminating the need for humans to enter any tank, thereby avoiding all dangerous risk factors. Efficiency is substantially improved as well and costs are avoided when operations that used to require tens of workers can be performed by only a few trained operators.The toxic chemicals that personnel can be exposed to when cleaning tanks manually include lead antiknock compounds, hydrogen sulphide, polycyclic aromatic hydrocarbons and benzene. Companies must also be aware oftoxic dusts from lagging, paint systems, grit blasting, etc.The physical hazards include climatic conditions, tripping and obstruction hazards applying to individual locations and physical designs of tanks. Additional problems are naturally occurring radioactive material and lowspecific activity scale, both of which can be detected in certain crude oil, ballast and slop systems.
Innovative and versatile tank cleaning solution
A new thermodynamically stable microemulsion significantly reduces cleaning times and costs as well as mitigates health, safety & environmental risks Over the course of the past 30 or so years, there have been significant advancements within chemistry and newly discovered chemical/natural compounds, which when combined produce a far more effective and sustainable solution for the removal of various types of waste streams.However, despite these advancements and newly discovered chemical compounds – the large majority of conventional chemicals used within tank cleaning are still highly dependent on petrochemical or caustic based formulations. Not only do conventional tank cleaning chemicals pose significant risks to health and safety but also to the environment.Large volumes of conventional chemicals are required to remove the waste media from tanks, which increase operational costs. Furthermore, a large majority of tank cleaning companies still have to apply excessive amounts of heat and deploy specialist equipment, to fully remove the waste from tanks, thus further increasing tank cleaning costs.
Keeping the roof drain open
A new floating roof drain system that only closes valves when petroleum product is detected not only saves personnel hours but also acts as an early warning system for undetected leaks or spills As an experienced storage operator and owner, Mark Rauch faced several challenges during his extensive career, including protecting floating open roof storage tanks from contamination and damage.One of the challenges in using this type of storage tank is protecting it from storm water damage and preventing environmental contamination from product leaking through the drain. Most storage tanks have a drainage system to remove rainwater from the roof. The premise of these systems is to close the automated valve when oil is detected inthe storm water. Some systems react to the petroleum in the liquid by dissolving a piece of Styrofoam which would then trigger the valve to close. The operator would then see a flag to indicate that the valve had closed, but the reaction time for the foam to dissolve and close the valve would vary depending on the product in the water.
The same two principles
All vapour recovery systems are based on the same two basic chemical principles – chemical equilibrium and filtration.In this context, the term vapour recovery refers to the vapours being emitted from trucks, railcars, barges, ships and storage tanks when they are filled with volatile petroleum products such as gasoline or crude oil. The vapours consist of air, mixed with VOC (volatile organic compound). In some cases, air is substituted by an inert gas such as nitrogen or CO2. CHEMICAL EQUILIBRIUM AND FILTRATIONAll vapour recovery systems are based on the use of the basic physical principle of chemical equilibrium in some way. Most vapour recovery systems also use some type of filtration.Chemical equilibrium is the state in a chemical reaction in which the involved components are present in concentrations which have no further tendency to change with time.
Decision making prcoess for CNG and LNG storage options
With natural gas emerging as the practical energy solution that satisfies environmental aspects, as well as economic ones, the energy industry has more questions than ever about making the correct choice for natural gas storage options.A significant portion of the US gas storage is underground. This article will deal specifically with the choices for aboveground storage. The decision-making process will study small and bulk storage for CNG and LNG. All NGLs gothrough a similar review process, but methane does have idiosyncrasies. Natural gas, whether as CNG or LNG, represents one of the more dynamic storage discussions. Using the following considerations to establish a path simplifies and expedites a developer’s design stage and establishes a path to facility storage.There are three key decisions that need to be considered and analysed when considering natural gas storage. These are location, storage interface, and storage dynamics.In general, the location category will refer to real estate. The first sub-category under location addresses the regulatory aspects of storage. For LNG, 49 CFR 193 will be the first consideration before progressing onwards.
Pump technology keeps refinery poised for high performance
A US PADD1 refinery was able to pick up rail unloading speed at the same time as lowering its own embedded energy costs with a pump solution from Circor THE CHALLENGE: UNLOADING CRUDE WITH ALL DUE SPEED, LOWER ENERGYA large independent refiner in North America railed advantaged crude oil from Western Canada to its East coast facility for offloading. The location, with sour crude coking capability, ran this lower-cost heavy crude oil and also owned its own onsite rail discharging. Controlling this infrastructure helps to reduce operating costs per barrel compared to relying on third parties.As with everything in the oil industry, time is important, so efficient unloading of the cargo upon arrival takes high priority. And there can be a financial consequence of exceeding a predetermined time window: demurrage, or the fees a railcar company may charge for failure to unload the products within the agreed-upon window.In addition, the Pipeline and Hazardous Materials Safety Administration of the US Department of Transportation has issued final rules requiring rail cars transporting crude oil to observe new maximum speeds of 50 mph, or 40 mph when traveling through defined highthreat urban areas, unless all tank cars meet or exceed enhanced design standards. For all practical purposes this means that unloading 20-railcar trains must occur as speedily as possible within the bounds of safety practices.
Attracting the next generation to the storage industry
Bulk liquid storage is essential not only to the economy, but to the health and welfare of the country.The fuels, foods and chemicals we take stewardship of every day are, in a very literal sense, the lifeblood of society and – by storing, importing, exporting and distributing them – we are pumping that blood around the nation, keeping the economy alive.If the liquid is the blood, then the pipes and tanks are the veins and arteries. The skeleton supporting all this is the logistics that receive, store, transport and deliver those all-important petrochemical products – underpinning businesses both in the public and private sectors whilst fuelling wider societal needs.If the storage industry fails to deliver – for whatever reason – the repercussions will be serious, potentially disastrous. That’s why the industry cannot ignore the ongoing need to continue delivering this lifeblood in the safest of environments, employing skilled and competent operational, maintenance and management teams.
Optionality in the storage market
Consumers have the greatest options and access to products than at any other time in history. Virtually anythingdesired is easily available and the ease of access is constantly improving as companies push the envelope to find the next big innovation and gain an advantage.Brand loyalty is being tested now more than ever, as new players utilise existing designs, new technology and materials, as well as value selling to gain quick market penetration. All while legacy companies are slow to respond and look forward.This is even the case in the aboveground storage tank industry, particularly with AST products. Generally speaking, when it comes to this niche industry the market leaders have become slow to respond to new trends and market developments. Until relatively recently, consumers in the industry have been limited to the same options they have had for years.There are a multitude of reasons for this, but often it’s a result of the ‘Why fix it if it’s not broken?’ approach.
The difference between slide shoe and fixed shoe domes
Geodesic dome roofs have been around for over 50 years and are today a commodity for aboveground storage tanks.Aluminium domes are described quite thoroughly in API 650, Appendix G. The choice of materials, basic design criteria and appurtenances are addressed and references to calculation methods are made. So technically, the most important properties for a geodesic dome are clarified, which makes it easy for users to safely choose their product.One aspect though always remains to discuss and more often than not leads to unanswered questions and wrong expectations.This is the question how to attach the dome to the tank, i.e. the roof supports. API 650 offers a brief and technically correct description in G.5.2 when slide supports are differentiated from fixed supports.What it states is that domes with sliding supports ‘minimise the horizontal radial forces transferred to the tank’ by using ‘a slide bearing with low friction pads. This shall be achieved with an ‘integral tension ring’ that resists the ‘primary horizontal thrust transferred from the dome’.
Organising cyber security in tank terminals
The European Union introduced legislation (the NIS directive) that became active on November 9, 2018.The goal of the Network and Information Security (NIS) directive 2016/1148 is to boost the overall security in the EU, with a focus on increasing the security level of organisations involved in critical infrastructure.Marcel Jutte, managing director of Hudson Cybertec, says: ‘Industries like tank terminals often do not have an adequate cyber security organisation in place to protect the terminal against attacks.‘In case of a successful breach, this is often not detected and as such networks are compromised and intruders are present on their networks. We often encounter situations where organisations overestimate their cyber security resilience. Reliance on existing security measures for safety instrumented systems (SIS), the usage of outdated policies and procedures all give a false sense of security.
Innovative hydraulic jacking system for lifting floating decks during construction
The construction of either an external floating roof (EFR) or internal floating roof (IFR) storage tank involves the fabrication of its floating roof (deck) on the bottom of the tank and then lifting the same to its maintenance elevation.Generally, the fabrication of the deck is carried out at an elevation of around 200 to 500 mm from the bottom of the tank to compensate for the bottom slope. It is extremely expensive and cumbersome to provide scaffolding inside the tank and assemble the floating roof at the maintenance level of the decks.Once the construction of the floating roof (either single deck or double deck) is complete at the bottom; the floating roof then needs to be elevated or lifted to a maintenance level of 1,800 to 2,000 mm to allow for the completion of works under the decks to fit roof drains, floating suctions, heating coils, agitators etc., as well as to finish work on the bottom of the tank.
The jouney towards digitising storage assets
The latest advancements in technology have made the digital twin of a tank terminal seem less farfetched. However, the state of digitalisation still greatly varies. To guide the tank storage owners through their digital transformation path, CEA Systems is diversifying its products and service offering to fit with the digitisation level of the industry’s technical assets With the rise of emerging technologies, it is now possible to capture more data, which uncovers insight into the current status of a storage facility.Devices such as 3D laser scanners or sensors in relation to the existing 2D drawings can reveal the real-time view and the condition of physical assets. When connecting this new asset data to the current smart data analytics tools, it has the potential to unlock meaningful insights for corrective, preventive and predictive maintenance and for optimising key decisions concerning operations, HSEQ and asset management.These technologies, data analyses and related lean processes make the idea to have a fully functional digital twin of a tank terminal seem less far-fetched. The question that remains is: How to make it a reality in today’s storage market?
Online tank inspection a reality
Scheduling a storage tank outage to comply with regulations and industry standards can be inconvenient, especiallywhen trying to align inspection schedules with repair schedules and customer expectations.Diakont has developed an inspection system to provide comprehensive storage tank floor inspection services while the tanks remain filled and operational to simplify tank inspection and maintenance. Certified Diakont inspection personnel use non-destructive testing (NDT) sensors and high-definition cameras on the crawler to deliver complete API 653-compliant inspection coverage.