Storage Terminals Magazine - Spring 2018

STORAGETERMINALSMAG.COM

STORAGE TERMINALS MAGAZINE

STORAGE SPRING 2018

TERMINALS MAGAZINE

LONG RUN OIL DEMAND Technology & Automation

PETROCHEMICAL COVER SOLUTIONS

EFFICIENT IN DESIGN. DISTINCTIVE IN APPEARANCE. UNSURPASSED IN QUALITY AND VALUE.

MARPOL’s impact on refiners World Terminal News

Flying the flag

Inter Terminals Ltd +44 (0)1737 778108 Info@InterTerminals.com | www.InterTerminals.com

SPRING 2018 EDITION

5 strategically located countries in Northern Europe 16 terminals 4.3 million cubic metres of storage 85+ years of experience 1st choice in bulk liquid and gas storage

A NEW TERMINAL IN THE CARIBBEAN

Inter Terminals is owned by Inter Pipeline Ltd. www.interpipeline.com

D E D I CAT E D 1 0 0 % TO T H E G LO B A L TA N K S TO R AG E I N D U S T RY

CST Industries | 498 N Loop 336 E | Conroe, TX 77301 USA | 844-44-TANKS | cstindustries.com

Photo: Cuff’s Industrial LLC

STORAGETERMINALSMAG.COM

STORAGE TERMINALS MAGAZINE

STORAGE SPRING 2018

TERMINALS MAGAZINE

LONG RUN OIL DEMAND Technology & Automation

PETROCHEMICAL COVER SOLUTIONS

EFFICIENT IN DESIGN. DISTINCTIVE IN APPEARANCE. UNSURPASSED IN QUALITY AND VALUE.

MARPOL’s impact on refiners World Terminal News

Flying the flag

Inter Terminals Ltd +44 (0)1737 778108 Info@InterTerminals.com | www.InterTerminals.com

SPRING 2018 EDITION

5 strategically located countries in Northern Europe 16 terminals 4.3 million cubic metres of storage 85+ years of experience 1st choice in bulk liquid and gas storage

A NEW TERMINAL IN THE CARIBBEAN

Inter Terminals is owned by Inter Pipeline Ltd. www.interpipeline.com

D E D I CAT E D 1 0 0 % TO T H E G LO B A L TA N K S TO R AG E I N D U S T RY

CST Industries | 498 N Loop 336 E | Conroe, TX 77301 USA | 844-44-TANKS | cstindustries.com

Photo: Cuff’s Industrial LLC

WORD FROM THE EDITOR

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Short vs. long As usual this year began with all manner of pundits predicting the movement of oil prices during 2018.

Crude oil prices will average US$60 a barrel in 2018 and $61 in 2019, reckons the US Energy Information Administration.

Oil prices used to have a predictable seasonal swing. They peaked in the spring, as traders anticipated high demand for summer vacation driving. Once demand had peaked, prices dropped in the autumn and winter.

But this time it’s different, with volatility being the name of the game. OPEC’s production cuts have turned out be more successful than predicted and global demand has been slower than expected.

So, rapid and unexpected price movements could turn out to be the new normal for everyone involved in extracting, selling and, of course, storing crude.

But so much for the short term; what of the long run?

In this issue we summarise an important new report penned by BP’s chief economist Spencer Dale and Bassam Fattouh, director of The Oxford Institute for Energy Studies (p38).

They think growth in oil demand is likely to slow gradually and eventually peak, and that plentiful supplies are likely to alter the behaviour of oil producing economies. However, they also argue that the current focus on the changing nature of the oil market is largely misplaced. Much of the popular debate is centred around when oil demand is likely to peak - 2025, 2035, 2040?

But this focus on dating the peak oil demand seems misguided, they say, for at least two reasons. First, no one really knows how soon the era of oil demand growth will end.

Second, and more importantly, this focus on the expected timing of the peak attaches significance to this point as if once oil stops growing it will trigger a sharp decline in oil consumption or an abrupt end to investment in new oil production.

But that seems very unlikely. Even after oil demand has peaked, the world will still consume substantial quantities of oil for many years to come under most scenarios.

So the good news for people in the storage terminal business is that demand for tank space, while fluctuating from year to year, is unlikely to dissipate any time soon.

Neil Madden EDITOR

STO RAG E T E R M I N A L S M AGA Z I N E S P R I N G 2 01 8

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CONTENTS

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45

Long run oil

Vopak’s balancing act

38 Expansion at Seal Sands

Contents 13

World terminal news

32

A giant in Geelong

All the news from the global terminal sector

Australia’s largest crude oil tank was officially opened by Viva Energy

36

In the pipeline

Antwerp port is buying its pipeline network to stimulate modal shift

61 14

Go Gothenburg

80

The hub of the matter

83

Upstream & Downstream

89

Shale & Unconventional Resources

93

Not so secure

99

Equipment focus

Construction of a land-based LNG facility gets under way at Gothenburg

Port of Tarragona is ramping up efforts to become a bulk liquids hub

Latest news from along the bulk liquid supply chain

38

In the long run…what?

The world will still need to guzzle oil for many years

Latest news from round the world

45

Balancing the imbalances

A survey shows low adoption of industrial cyber security measures

53

Blending a better batch

Brenntag UK & Ireland opens a new state of the art blending facility

Applications and case studies from BIOex, Belzona, Ergil, Newson Gale, Fort Vale, Concrete Canvas & Port Vision

61

Seal Sands set for growth

129

Technology & automation

66

Bahamas boom

152

Upcoming events

Vopak says its strategy of focusing on four criteria will pay dividends From Aegean to the Baltic

78

Inter Terminals’ expands its Seal Sands Terminal

Oban Energies’ project for a new Caribbean storage terminal

72

Bunkering down

76

Ready for anything

What’s new in process industry technology, equipment & automation

A preview of StocExpo and other conferences and exhibitions this year for the global storage business

The introduction of MARPOL could see refiners boost margins

A major Black Sea terminal conducts regular hazard training

STO RAG E T E R M I N A L S M AGA Z I N E S P R I N G 2 01 8

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Turkey’s Leading Liquid Terminal

INTEGRATED QUALITY MANAGEMENT

ENVIRONMENTAL POLLUTION CARE

ENERGY SAVING

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SEAWATER ENVIRONMENT

REDUCED EMISSIONS

ECO HEALTH AND SAFETY PROCESSES

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Terminal

Operations

Member of 10

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HEADING

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PUBLISHER

Greg Emmenis EDITOR

Neil Madden COMMERCIAL DIRECTOR

Abby Davey BUSINESS DEVELOPMENT MANAGER

Louise Cox Cover image supplied courtesy of Matrix Applied Technologies www.matrixappliedtech.com

DESIGN

Julie Lodge ADVERTISING

ge@media-36.com t: +44 (0)20 8432 9509 m: +44 (0)7877 003 195 ONLINE EDITOR

Emma Ardley-Batt StorageTerminalsMag.com

Storage Terminals Magazine is featured at: Industry Vision Media Group Suite 135

8 Shepherd Market

Mayfair

London

W1J 7JY

Published four times a year Storage Terminals Magazine is the premier business magazine for executives, technicians, engineers and all professionals working in the global bulk liquids storage industry. With its high level content, industry expert contributions and unparalleled global news coverage, Storage Terminals Magazine gives you the information you need to make your business run smoother, safer and more profitably. So whether you want an update on the effects of oil price movements on demand for storage capacity, technical articles on how to ensure your facility runs as efficiently as possible, or the latest updates on regulation and environmental compliance, you will find all you need in Storage Terminals Magazine. Enjoy!

All rights reserved No copy without the written consent of the publishers first, can be lent, resold, hired out or otherwise disposed of in a mutilated condition or in any unauthorised cover, by way of trade, or affixed to or as any part of a publication or advertising, literary or pictorial matter whatsoever. Storage Terminals Magazine trading as Industry Vision Media Group are full protected by copyright and nothing may be printed wholly or in part without permission. Every possible effort has been made to ensure the information in this publication is accurate at the time of going to press and neither the publishers nor any of the authors, editors, contributors or advertisers can accept any responsibility for any errors or omission, however caused. For certain articles within this publication we have used stock images to improve the aesthetics of the page. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can accept by the editors, authors, the publisher or any of the contributors or sponsors.

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WORLD TERMINAL NEWS

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World

Terminal NEWS

MEXICO WIN for MATRIX

G

rupo Desarrollo Infraestructura (GDI) has awarded Matrix Service Inc the engineering, procurement, fabrication and general tank construction oversight for 12 tanks that will be part of a new liquids fuel terminal at Port of Veracruz, Mexico.

The terminal is being built by Infraestructura Energetica Nova (IEnova) following execution of a 20 year concession agreement with the Port Authority of Veracruz and a long-term storage contract with a subsidiary of Valero Energy Corp.

GDI is the EPC contractor for the terminal, which, when finished, will be the largest private refined products marine terminal built in Mexico after the country’s recent energy reform.

When complete, the terminal will have a nominal capacity of 2.1 million barrels and a working capacity of 1.7 million barrels of gasoline, diesel, jet fuel, and methyl tert-butyl ether (MTBE) to supply the central region of Mexico. The Veracruz terminal is also the first of three storage facilities to be constructed by IENOVA in

STO RAG E T E R M I N A L S M AGA Z I N E S P R I N G 2 01 8

central Mexico as part of the country’s emerging US$10 billion liquids market.

“We take great pride in our position as a leader in tank and terminal design for our customers across the energy markets and, as we launch this project, look forward to building a lasting, partnership relationship with GDI and Ienova,” said John R Hewitt, CEO of Matrix Service Company.

Franco Bonfanti, president of GDI, added: “GDI has been actively supporting international companies with natural

gas pipeline infrastructure projects in Mexico for the past 10 years. This storage terminal project represents an opportunity to expand our service offering to long term customers like IEnova, and to enter the rapidly growing storage infrastructure market in Mexico in partnership with a leader in the storage solutions industry, Matrix Service Company.”

The award by GDI represents a milestone for Matrix as it extends its reach into international markets.

Verwater jacks Petronas tank In November Verwater jacked its very first tank for Malaysia’s Petronas.

Together with project partner, RME, Tank 4 in Perai was jacked up to a height of 1.9m.

Tank 4 with a diameter of 24m and height of 14.5m, had suspected internal foundation issues. For this

reason, Petronas wanted to jack up the tank to a sufficient height to carry out foundation inspection works, combined with underside bottom plate inspection.

Mobilisation from Singapore, preparation on site, including jacking, took about one week until the jacking was raised to 1.9m.

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WORLD TERMINAL NEWS

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ALPHA INVESTS IN VLISSINGEN The Kiel Canal can provide ready distribution not just to Northern Germany but also Scandinavia

FROM AEGEAN TO THE BALTIC Aegean Marine Petroleum Network started physical supply operations on the Kiel Canal, Northern Germany, in January 2018.

T

he operation is being managed by Aegean’s German subsidiary, OBAST Bunkering & Trading GmbH, based in Rostock, in partnership with local tank farm operator, UTG – Unabhängige Tanklogistik GmbH. UTG bought the tank farms in Kiel and nearby Bremerhaven from Oiltanking at the start of 2017.

The new station is located directly on the Baltic Sea entrance to the Kiel Canal and represents an ideal physical supply station for shipping transiting the canal and working in the wider regional market.

In Kiel, Aegean will deliver a full range of MARPOL-compliant fuel grades including RMG 380, ULSFO-RMD 80, Gasoil DMA and Gasoil DMA. All deliveries will be made ex-pipe from the installation.

Aegean will operate tanks with a capacity of 13,000 cbm representing the entirety of UTG’s available tankage for marine fuels purposes.

“The Kiel facility represents Aegean’s third storage location in Germany alongside the exclusive use of tanks in Nordenham on the River Weser and with Vopak in Hamburg,” said Jonathan Mcilroy, president of Aegean Marine Petroleum Network.

“The addition of Kiel operations enhances our flexibility throughout the German and Southern Scandinavian Baltic Sea ports. It also emphasises Aegean’s commitment and ability to

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innovate and expand the physical supply network globally.”

OBAST and Aegean Bunkering Germany serve all locations along the German Baltic coast including the most important ports of Hamburg, Bremerhaven, Bremen, Wilhelmshaven, Emden, Brunsbüttel, Kiel, Rostock, Wismar, Stralsund, Travemunde, Stade and Brake.

In the same region, Gasunie LNG Holding, Oiltanking and Vopak LNG Holding declared open season on 17 January for their joint venture ‘German LNG Terminal GmbH’.

The terminal will offer the opportunity to diversify Germany’s sources of gas supply and facilitate access to LNG as an alternative fuel for ships and trucks. The development of German LNG Terminal is currently focused on the location of Brunsbüttel.

Being close to Port of Hamburg is touted as an attractive business location. Via the Kiel Canal, the Scandinavian countries and the Baltic States can also easily be reached.

The aim of the facility is to offer discharge and loading of LNG ships, storage of LNG, regasification and send out into the natural gas network, and LNG distribution via trucks and barges.

Subject to the outcome of the open season and other considerations construction of Germany’s first LNG terminal is envisaged after the final investment decision in 2019, to be ready for operations in Q4 2022.

Alpha Terminals is to build and operate a new terminal for liquid bulk in the Vlissingen port area in North Sea Port, the merged company overseeing the ports of Vlissingen and Terneuzen, in the Netherlands, and Belgium’s Port of Ghent.

The investment amounts to €250 million.

The tank terminal will have a storage capacity of 500,000 cbm in 34 tanks. It will be possible to store various kinds of liquid bulk products in the tanks ranging from chemicals and oils to oil products and future generation sources of energy such as ammonia.

The terminal will be good for an extra supply of 5-7 million tonnes of liquid bulk a year. Next to the facility a jetty is planned for loading and unloading of various seagoing and inland vessels at the same time. The terminal will be constructed at the mouth of the Sloehaven. The industrial site has a surface area of more than 8ha.

This year the necessary permits will be applied for and it is expected that by 2019 the construction works will be able to start and they will take two years. In 2020, the terminal could then be operational.

North Sea Port is looking forward to the opening of the tank terminal by the Swiss investor. It is the first time that Alpha has entered the port. Moreover, with the expected increase in traffic, North Sea Port is improving its position in the liquid bulk sector. At the moment, liquid bulk takes up one third of the port’s seaborne cargo traffic.

The Vlissingen port area has among the deepest accessible ports in Europe and can accommodate large deep-lying vessels. The port area has direct access to the North Sea and vessels can smoothly moor and unmoor there without delays. Moreover, it can link up with the European inland navigation network via the Western Scheldt and the GhentTerneuzen Canal.

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WORLD TERMINAL NEWS

INTEGRATED SYSTEMS While designing and manufacturing the highest accuracy meters in the industry, Brodie also provides complete solutions for metering applications such as...

• • • • •

Truck loading/unloading systems Ship loading/unloading systems Rail car loading/unloading systems Pipeline metering systems Blending systems

Brodie’s scope of system integration includes • • • • •

Consulting Design Meter component manufacturing Fabrication of complete skid Testing, calibrating and providing Factory Acceptance Test (FAT) on Brodie’s premises • Commissioning on site STO RAG E T E R M I N A L S M AGA Z I N E S P R I N G 2 01 8

Contact: T: +1 912 489 0200 E: sales@brodieintl.com www.brodieintl.com P.O. Box 450 (30459-0450) 19267 Highway 301 North Statesboro, GA 30461, USA 15

H EOARDL IDN G W TERMINAL NEWS

ADG DEVELOPS APPALACHIA HUB Appalachia Development Group (ADG) has made a loan application for US$1.9 billion to be used to develop infrastructure for the Appalachia Storage & Trading Hub (ASTH).

ADG submitted a section of its loan application in September last year.

The ASTH is a proposed underground storage facility for natural gas liquids and intermediates. According to the American Chemistry Council, the development of the ASTH would serve as a catalyst for the creation of an estimated $36 billion in follow-on petrochemical investments and more than 100,000 new long term jobs.

CEO, ADG and president & CEO Mid-Atlantic Technology, Research & Innovation Center (MATRIC), Steve Hedrick said: “We are pleased to have achieved this milestone, but we are far from satisfied in our pursuit of a vibrant and growing Appalachia based on sound business principles. We are grateful for the collaboration with the states in Appalachia, and industry, legal and financial partners. There is much work to be done to drive this forward, and our team is strong, prepared and highly motivated. The growth of our business will serve the industry well, and we look forward to the day that the outputs of the ACC’s report are enabled as industry grows alongside the Hub.” The ADG was formed as a collaborative platform to deliver the Appalachia Storage and Trading Hub, considered to be a catalyst for the industrial spread associated with shale gas developments in the Marcellus, Utica and Rodgersville plays.

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AVANT ADVANCES MEXICO NETWORK Avant Energy is to build a network of terminals to supply refined petroleum products from the Port of Altamira, Tamaulipas to the Bajio region of North-Central Mexico. The network will be known as ‘SUPERA’, short for Suministro de Petroliferos Altamira–Bajio.

Avant Energy is a Mexican company focused on the development, construction and operation of energy infrastructure for the oil, natural gas, refined products and power sectors, and is working on this development with US logistics group Savage Companies and rail operator Kansas City Southern de México as strategic partners.

The SUPERA network will provide a logistics solution for companies to supply refined products from the United States to several cities in the Bajio region.

Initially the network will consist of a marine terminal and an inland terminal developed simultaneously and involving an investment in the order of US$200 million.

The marine terminal will be located in Port of Altamira. It will be capable of unloading Panamax size vessels and providing storage for up to 1.2 million barrels of refined products. The terminal will be operated by Savage and will facilitate rail access to the Bajio region via an interconnection with the existing KCSM railroad. Key port facilities and regulatory permits have been obtained.

The initial inland terminal will

comprise a storage and dispatch facility in Queretaro with direct connection to the KCSM system. This terminal is being designed to receive unit trains with storage capacity of 450,000 barrels.

Both the marine terminal and the inland storage facility are expected to commence construction during the third quarter of 2018, and start commercial operation before the end of 2019.

Luis Farias, CEO of Avant Energy, said: “The energy reform has allowed new players such as Avant Energy to participate in open markets, which will allow increased efficiencies to the supply chain and ultimately benefit the consumer.”

“This network will open the door to more efficient supply and transport of refined petroleum products from US refiners into Mexico’s North-Central region, where it is needed,” added Kirk Aubry, Savage president and CEO. “We’re pleased to partner with Avant Energy and Kansas City Southern de Mexico in this important project to help ensure safe, reliable and affordable service for our customers.”

The proposed Appalachia Storage & Trading Hub should act as a catalyst for industrial spread associated with shale gas developments in the Marcellus, Utica and Rodgersville plays

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WORLD TERMINAL NEWS

BASE LINE UP AND RUNNING

K

eyera Corp has announced the startup of its Base Line Terminal, an aboveground crude oil storage terminal adjacent to its Alberta EnviroFuels facility near Edmonton, Alberta, Canada.

The first four tanks are now in service with the remaining eight tanks expected to be phased into service throughout 2018. The terminal is a 50-50 joint venture in affiliation with Kinder Morgan Canada Limited and will provide customers with a total of 4.8 million barrels of crude oil storage capacity.

“The Base Line Terminal is a great addition to our diversified portfolio of assets,” said David Smith, Keyera’s president and CEO. “This new business provides Keyera with stable fee-for-service cash flows fully underpinned by several take-or-pay agreements up to 10 years in length with creditworthy counterparties.

We are pleased to have partnered with Kinder Morgan by combining our complementary assets and areas of expertise to meet customer needs.”

The total Base Line Terminal project is currently on time and on budget. Up to an additional 1.8 million barrels of crude oil storage capacity may be added to the Terminal, depending on future customer demand.

Keyera operates one of the largest midstream energy companies in Canada, providing services to oil & gas producers in the Western Canada Sedimentary Basin.

PROSTAR SNAPS UP FUJAIRAH TERMINAL 18

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Kathryn Clay to be new ILTA president The International Liquid Terminals Association (ILTA) has appointed Kathryn Clay as its new president. The appointment follows the departure last year of Melinda Whitney.

Dr Clay has been vice president for policy at the American Gas Association since 2013. She has also been serving concurrently as the executive director of the American Gas Foundation, a position she has held since joining AGA in 2011.

Her initial responsibilities at AGA also included serving as executive director of the Drive Natural Gas Initiative, a joint project of natural gas utilities and gas producers.

Prior to joining AGA, Clay was vice president, research and technology policy, for the Alliance of Automobile Manufacturers. She was a member of the professional staff of the Senate Committee on Energy and Natural Resources from 2005 to 2008 as well as serving on the professional staff of the Energy Subcommittee of the House Committee on Science from 2003 to 2005.

John A Roller, chairman of ILTA’s board of directors, said: “Kathryn’s deep understanding of energy policy issues, her extensive experience as an industry advocate, and her strong background in trade association management make her an excellent choice to lead ILTA. I am delighted that she will be joining our industry as new president.”

Clay holds a PhD in Applied Physics and a MS degree in Electrical Engineering, both from the University of Michigan, Ann Arbor.

Meanwhile, Melinda Whitney has joined the Petroleum Equipment Institute (PEI) in the new role of director of operations.

Whitney is responsible for providing organisational leadership, building and

Kathryn Clay, ILTA’s new president

maintaining organisational effectiveness and overseeing PEI finances.

“Melinda brings association executive experience to PEI’s new director of operations role, and we’re excited to welcome her to our leadership team,” said Rick Long, executive vice president and general counsel of PEI. “She also speaks Spanish, which will be an asset as PEI explores Latin American endeavours.”

Whitney said she is eager to work with PEI members, some of whom hold concurrent ILTA memberships. Many of the products stored by ILTA members trickle down the supply chain to the equipment PEI members manufacture, distribute, install and service.

“I am very excited to join the PEI team and bring my non-profit management and industry experience to the association,” Whitney said. “I look forward to working with the entire PEI community."

Whitney has a Bachelor of Arts in Journalism from Colorado State University.

Prostar Capital now has a 90 percent controlling stake in Socar Aurora Fujairah Terminal FZC after buying 100 percent of the shares of Socar Aurora Terminals SA. The Prostar Capital entities investing in the asset are Prostar Asia-Pacific Energy Infrastructure Fund and a co-investment fund managed by Prostar Capital for a large US state pension plan. Socar Aurora Fujairah Terminal FZC is a joint venture between State Oil Company of Azerbaijan Republic (SOCAR), Swiss-based commodity trader Aurora Progress, and the Government of Fujairah. Prostar started buying into the terminal back in 2013 with an 18.6 percent stake. The private equity firm eventually increased its ownership to 40 percent in August 2015. The terminal comprises 14 operational storage tanks with total capacity of 352,000 cbm. A further 12 tanks, with 315,000 cbm of capacity, are being built.

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WORLD TERMINAL NEWS

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CLH, Phillips in long run throughput pact In the UK, CLH Pipeline System Limited (CLH-PS) and Phillips 66 Limited (Phillips 66) have entered into a long term throughput contract to December 2033.

Under the contract, which took effect on 1 February, Phillips 66 will continue to supply a significant volume of petroleum products from its Humber Refinery into the CLH-PS pipeline at Killingholme, Lincolnshire, each year.

Using its pipeline network, CLH-PS will transport this material to the Bramhall Terminal, south-east of Manchester, from where it will be delivered to Phillips 66 wholesale and retail customers via the Bramhall road rack.

As part of the agreement, Bramhall will be operated and maintained by CLH-PS. Mary Wolf, managing director, UK marketing at Phillips 66, commented: “This contract demonstrates our long term commitment to North West England and strengthens our presence in the region as a fuel supplier. As part of this contract, extensive capital investments have been made to enhance Bramhall Terminal’s capability. We are delighted to be entering into this 16 year contract with CLH-PS which has a proven track record of providing a high quality service in Spain.”

Nacho Casajus, CEO of CLHPS, added: “We are very pleased to announce this long term agreement with Phillips 66, which reflects our commitment to the UK market and our ability to offer a safe and efficient service to our clients. It also continues our strategy of insourcing our terminals into CLH operation so we are able to offer an integrated, first class service.”

Bramhall Terminal is a key fuels supply terminal in the UK network and an important hub in Phillips 66’s logistics infrastructure, having been leased and operated by the company since 1968. The terminal is backed by a storage capacity of 44 million litres and is capable of supporting increased demand for fuel supply in the coming years.

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The loading rack at Bramhall Terminal

TRILOGY TEAMS WITH NGP Trilogy Midstream Investments is partnering with private equity firm NGP. Both Trilogy’s founders and NGP have made significant capital commitments to the company in support of its strategy to develop midstream infrastructure along the US Gulf Coast.

Trilogy Midstream was founded in 2017

by Jerry Dearing, Dave Marye and Drew Tingleaf who worked together for almost a decade at NET Midstream, which was sold to NextEra Energy Partners for US$2.1 billion in 2015.

At the time of sale, NET Midstream operated seven natural gas pipelines in South Texas with a combined 3 Bcf/d of ship-or-pay contracts with a weighted average term of over 16 years and over 1 Bcf/d of available expansion capacity. The pipelines developed and operated by NET Midstream serve utilities, municipalities, power plants, industrial loads and natural gas producers.

Dave Marye, the company’s president said: “Jerry, Drew and I started Trilogy with the goal of leveraging our expertise and experience to provide innovative and cost efficient midstream solutions for our customers. When we considered bringing

on a private equity partner, we looked for a team with a great track record and the ability to support large-scale pipeline projects. We are proud to add NGP to the team and look forward to developing projects that will serve end-users and producers along the Gulf Coast.”

“We are thrilled to partner with the Trilogy management team to build on their successful track record of creating value in the midstream sector,” said Chris Carter, managing partner of NGP. “What the team at NET Midstream was able to accomplish is an example of what can be achieved through the combination of industry experience, creativity and tenacity.

The Trilogy management team’s track record building demand-driven midstream systems combined with expected oil and natural gas volume growth in the United States provides a compelling backdrop for this investment.”.

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NEW WTI SPECS AT ENTERPRISE CUSHING

Enterprise’s Cushing terminal is a physical delivery point for NYMEX WTI futures

“We are pleased to offer an expanded quality assurance programme which is consistent with the standards required by our producing and refining customers, both domestic and international,” said Brent Secrest, senior vice president, liquid hydrocarbons marketing, for Enterprise’s general partner. “The new specifications will enhance stability, predictability and integrity for the WTI crude oil stream, which can be delivered against the NYMEX WTI futures contract at Cushing.”

The five additional quality parameters include tests for distillation, vanadium, nickel, total acid number (TAN) and micro carbon residue. The new specifications are expected to take effect starting with the January 2019 delivery month.

In other moves, Enterprise is to expand its butane isomerisation facility at its complex in Mont Belvieu, Texas.

This expansion is supported by long term agreements to provide butane isomerisation, storage and pipeline services, including a 20 year, 35,000 bpd fee-based, tolling agreement. Enterprise is currently evaluating two options that would add up to 30,000 bpd of incremental capacity.

Butane isomerisation is the process of converting normal butane into high purity isobutane, which is used as a feedstock for the petrochemical and refining industries. The partnership is the largest commercial producer of high purity isobutane in the United States, with 116,000 bpd of isomerisation capacity at Mont Belvieu. Its isobutane system also includes approximately 13 million barrels of aggregate isom grade normal butane and high purity isobutane salt dome storage capacity and 162 miles of distribution pipelines.

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Enterprise Products Partners is adopting five new quality specifications for sweet crude oil – West Texas Intermediate (WTI) – at its terminal in Cushing, Oklahoma. Enterprise’s Cushing terminal is a physical delivery point for NYMEX WTI futures.

“Enterprise has been providing feebased isomerisation services since 1981,” said Jim Teague, CEO of Enterprise’s general partner. “We are pleased to announce these new long term agreements to support another expansion of our facility. We have seen solid demand growth for high purity isobutane by the petrochemical and refining industries.

This expansion project is another example of organic growth generated by our integrated value chain serving both producers and consumers of NGLs, natural gas and crude oil.”

The partnership is also adding 300 million cubic feet per day (MMcf/d) of incremental capacity at its cryogenic natural gas processing facility under construction near Orla, Reeves County, Texas. The addition of a third processing train at Orla would increase inlet volume capacity to 900 MMcf/d and allow Enterprise to expand its natural gas liquids (NGL) extraction capabilities by 40,000 bpd to 120,000 bpd. The third processing train is expected to begin service in the second quarter of 2019 and will complement trains one and two, which are on schedule for completion in the second and third quarters of 2018.

“The ongoing expansion of our Orla facility is being driven by the continued

growth of NGL-rich natural gas production in the Delaware Basin and is supported by long term commitments with producers,” said Teague. “Over the next five years, supplies of natural gas and NGLs in the Permian Basin could nearly double, and Orla is ideally situated to capitalise on growth opportunities in the region. With connections to our integrated natural gas and NGL infrastructure network, Orla is a key component in providing our customers access to the growing petrochemical industry along the Gulf Coast, as well as the export demand for US production.”

Mixed NGLs from Orla will be delivered into Enterprise’s pipeline system, including the new Shin Oak Pipeline which is currently under construction and scheduled to begin operations in the second quarter of 2019. Residual natural gas from Orla will be transported to the Waha area through a 68 mile, 36ins diameter pipeline scheduled to begin service commensurate with the first Orla train, and will connect to Enterprise’s Texas Intrastate pipeline system at the Waha hub. On completion of the Orla expansion, Enterprise will have total natural gas processing capacity of more than 1.2 billion cubic feet per day, and the capability to extract more than 200,000 bpd of NGLs in the Permian Basin.

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WORLD TERMINAL NEWS

Pond celebrates safety achievement Pond’s constructors team celebrated its safety accomplishments while working on two new 37,000 bbl jet fuel storage tanks.

Since the start of field efforts, the Pond team worked 9,617 man hours on the project without experiencing any injuries. While the small size of the project site footprint at times proved difficult to work in, all subcontractors achieved their goals.

“Pond field superintendent Mike Gore has done an exceptional job on this project making sure all subcontractors are working safe and following all rules that are established by the client,” said Pond consultant John Hodge.

In recognition of the project safety accomplishments, an appreciation lunch was held for the team. The 35 team members attending the team lunch included Kelley Construction, Ralph Hernandez Construction, Tarsco Tank Company, ASIG and Pond employees.

“This project was challenging for a number of reasons, and we wanted to take the opportunity to recognise the team for their commitment to preventing all workplace injuries,” said Pond director of health and safety Jim Davis.

When complete, the project will provide airline companies at the facility with an enhanced storage and transport system, allowing them to receive pipeline quantities of jet fuel from multiple suppliers.

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SemGroup sells asphalt business to fund HFOTCO The SemGroup Corporation has agreed to sell its asphalt business, SemMaterials México, to Ergon Asfaltos México HC, LLC, for US$70 million and will use the cash raised to fund the acquisition of Houston Fuel Oil Terminal Company (HFOTCO) and other projects.

SemGroup president and CEO Carlin Conner said: “Divesting these non-core legacy assets is an important step as we raise capital and clearly define our portfolio of midstream services on the Gulf Coast, Mid-Continent and in Canada.

As we enter 2018, we remain focused on executing our strategic plan, enhancing our balance sheet and paying the second HFOTCO payment.”

SemMaterials México provides asphalt products, technology and pavement services to the Mexico paving market. The business includes 14 in-country terminals and two national laboratories. It is the largest supplier of liquid asphalt cement products and product application services in the country and has a presence in every Mexican territory.

Carlin added: “I would like to thank the employees of SemMaterials for the many years they’ve committed to safety, sound operations and fiscal excellence.

They’ve built an impressive business that should be an excellent addition to Ergon’s portfolio.”

The sale is expected to close early in the second quarter of 2018.

President of Ergon Asphalt & Emulsions, Inc, Baxter Burns commented: “As Ergon has expanded our footprint from coast to coast in the US over the past 36 years, we have been interested in moving into Mexico. The similarities between Ergon and SemMaterials México, from company culture and focus on employees, technology, quality products and safety, made this a perfect fit.”

Selling its asphalt business will help SemGroup pay the second instalment on the purchase of HFOTCO

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Contanda’s revised application for eight new storage tanks at Grays Harbor is in response to customer demand for biofuels and commodities such as ultra-low sulphur diesel

CONTANDA TO EXPAND GRAYS HARBOR In anticipation of increased demand for low-carbon, cleaner fuels, Contanda plans to expand its facility at Grays Harbor, WA, to store a portfolio of cleaner fuels including biodiesel, renewable diesel and ultra-low sulphur diesel.

Since 2009, Contanda has operated a facility to handle bulk liquid storage and logistics at Port of Grays Harbor. The existing facility handles methanol for industrial uses. In 2013, the company sought permits to expand the facility for other liquids, including crude oil.

Ultimately, the permits were not granted, primarily because of opposition to the storage and handling of crude oil.

The revised application for eight new storage tanks capable of storing 1.1 million barrels of liquid is in response to customer demand and the strong future across the West Coast for biofuels and commodities such as ultra-low sulphur diesel as low carbon fuel standards and carbon regulations continue to move forward.

“We heard the community, met with our customers and developed a revised strategy involving the storage of clean products,” said GR ‘Jerry’ Cardillo, CEO of Contanda. “With the highest commitment to safety, our neighbours and the environment, we look forward to this

Ceylon Petroleum new storage STO RAG E T E R M I N A L S M AGA Z I N E S P R I N G 2 01 8

potential expansion which will bring jobs, tax revenue and other economic benefits to the community for the long term.”

Grays Harbor’s location and infrastructure are attractive to Contanda and potential customers whose products originate in the Northwest USA and can travel by rail to the port to be transferred to deepwater marine vessels. The project would create as many as 100 jobs during construction and up to 20 permanent positions when operational.

“The combination of deepwater shipping terminals, rail service, experienced labour and available land for development of facilities is what first attracted Contanda to the area in 2009,” Cardillo said. “These attributes continue to provide an attractive development option for us as we look to expand our West Coast terminal presence.”

The company is working closely with the City of Hoquiam and the Washington Department of Ecology on a streamlined permitting process, but does not yet have a timeline for the revised project.

In October last year, Contanda also secured prime waterfront acreage on the Houston Ship Channel to support growing demand for petrochemical and hydrocarbon storage.

Following a multi-year commercial agreement with Port of Houston Authority for 339 acres of property the land acquisition enables Contanda to develop its key strategic business objective of doubling its terminal storage capability over the next five years, and expanding into the bulk petrochemical and hydrocarbon markets.

This will strengthen the company’s presence along the US Gulf Coast where project investments have surged since 2014 and Contanda already operates three other bulk terminals.

“This agreement with the Port of Houston Authority solidifies our longterm commitment to grow with Port of Houston and the Houston Ship Channel,” said Cardillo. “With this project, Contanda has the opportunity to make significant strides in achieving our corporate goals while firmly establishing our position as a leading storage provider in the growing petrochemical and hydrocarbon markets.”

“Liquid bulk storage facilities are in high demand along the Ship Channel and this agreement enables Port of Houston to support this vital industry sector,” said port chairman Janiece Longoria. “This positive development fits in well within our strategic growth plan objective to grow and diversify our business base. In addition, this partnership with Contanda helps us optimise and leverage our real estate assets, while helping the company meet its own strategic objectives.”

Contanda’s state-of-the-art automated terminal facility will be built in phases to provide customers access to onsite processing, multiple ship and barge docks, and tank truck and railcar accessibility.

The facility is centrally located for numerous pipeline connections providing support storage services for a variety of commodities including petrochemical, clean petroleum products, various blend stocks, ethanol, crude oil, and refinery intermediates and other bulk commodities.

Contanda currently operates three storage terminals in the Houston area and 13 other bulk terminals across North America.

Ceylon Petroleum Corporation, the Sri Lankan state-owned petroleum refiner, has started construction of a tank farm that should double the company’s storage capacity local media has reported. The country’s petroleum minister Arjuna Ranatunga was reported as saying that 10 tanks with a total capacity of 11,200 tonnes were being built at a cost of US$2.7 million.

The tanks are being constructed on the outskirts of the country’s capital Colombo and are the first new capacity added for around four decades.

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Zenith into Hamburg Zenith Energy has signed an agreement to buy Shell’s storage terminal in Hamburg, Germany.

Terms were not disclosed but the transaction is expected to close in the first half of this year.

The terminal is located in the Port of Hamburg, located on 55ha, and serves as a refined product import and blending terminal in North Germany with an expected storage capacity of over 480,000 cbm for gasoline, diesel and jet fuel; inbound and outbound ocean vessel, barge, rail and truck, as well as pipeline connectivity in the port. After transferring ownership to Zenith, Shell will remain a significant customer of the terminal.

“We are pleased to further Zenith’s geographic expansion with the acquisition of these assets strategically located in Hamburg, one of the world's

largest trading ports and a key terminal centre for crude and refined products in Europe,” said Jeffrey R Armstrong, Zenith’s CEO. “This is a natural progression in our growth strategy and underscores our commitment to expand into key European markets.”

The acquisition represents Zenith’s third terminal in Europe following the purchase of terminal assets in Amsterdam from BP in April 2016 and its acquisition of the Bantry Bay facility in West Cork, Ireland from Phillips 66 in February 2015.

Zenith also operates a multi-product liquids terminal in Palermo, Colombia, formed through a joint venture with Grupo Coremar in 2014.

In December 2017, Zenith Energy US completed its acquisition of Arc Logistics, marking Zenith’s entrance into the US market.

Hamburg is a key terminal centre for crude and refined products in Europe

WOLF IN TEXAS Wolf Midstream Partners has reached agreement on a crude oil gathering and transport system with an independent producer for approximately 25,000 leasehold acres in the Permian Basin of West Texas. To support the agreement, and other area producers as needed, Wolf plans to construct approximately 50 miles of new crude oil gathering pipelines with an expected capacity of 55,000 bpd.

Additionally, Wolf has established a delivery point near Colorado City, Texas, and plans to construct terminal facilities, with interconnects into multiple downstream pipelines. “We are excited about this partnership with a seasoned operator and look forward to building out this new system,” said Curtis Ewers, Wolf Midstream CEO. “The Wolf team has a long and successful history developing midstream solutions that provide producers with creative, reliable service. This new system will solidify our position in the Permian region, where we remain very focused on deploying the necessary capital and developing the infrastructure needed to address our customers’ long term and immediate needs.” Construction has begun, and Wolf expects the new system to start service in the second quarter of this year.

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LIQUID BULK In 2017, Antwerp’s volume of liquid bulk topped out with growth of 5.7 percent (to 73 million tonnes). In fact, the last quarter of the year was the best ever in this segment.

The rise in the total volume of liquid bulk was driven by an increase in the amount of crude oil handled, up by no less than 49.9 percent (to nearly 6 million tonnes). The volume of oil derivatives, accounting for nearly three quarters of the total within this segment, rose once more by 3.1 percent, to just under 53 million tonnes.

FLUOR WINS SOUTH AFRICA EPC Fluor Corporation will supply the engineering, procurement and construction management contract for Vopak Terminal Durban (Pty) Ltd. President of Fluor’s energy & chemicals business in Europe, Africa and the Middle East, Al Collins said: “This is one of Vopak’s largest storage facility projects in South Africa and the largest storage project undertaken by Fluor in Africa.”

General manager of Fluor in Sub-Saharan Africa, Alejandro Escalona added: “We are pleased to assist Vopak with this project where our team will use Fluor’s Zero-Base Execution approach to develop fitfor-purpose integrated solutions to optimise the expansion of the facility.

Fluor is using Zero Base Execution all over the world to reduce the cost of facilities while improving schedule certainty by aligning the design and execution principles, project drivers and economic needs before design work begins.”

The expansion project is part of Vopak’s programme to facilitate the increased demand for fuel with cleaner specifications in Southern Africa by increasing the capacity of fuel storage at its Durban terminal.

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LBC, ME in FREEPORT DEAL

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n agreement has been signed between LBC Tank Terminals and MEGlobal Americas, to build a new terminal in Freeport, Texas.

The facility will be constructed adjacent to MEGlobal’s monoethylene glycol (MEG) manufacturing plant and connected by pipeline. The terminal will be located on property owned by MEGlobal Americas and leased to LBC Freeport Terminal LLC. The process plant is to be constructed 60 miles south

ATLHA TO BUILD IN DUISBURG

of Houston at MEGlobal’s new Oyster Creek site in Freeport.

LBC Freeport will be an integrated part of MEGlobal’s supply chain, secured through a long term contract and pipeline connection. The main products to be handled are monoethylene glycol and diethylene glycol. On receipt of the necessary regulatory permits, construction commenced in August 2017 and the terminal is planned to be operational during 2019.

“We are delighted to enter into this agreement and partner with

MEGlobal Americas on this project,” stated John Grimes, LBC’s regional business president Americas. “With over 30 years of historical experience in handling glycols, this project opportunity fits our portfolio and investment risk models and is aligned with our business strategy to optimise, build-out and expand our business.

This project very much fits our expertise in constructing, managing and operating chemical terminals and we look forward to a successful business partnership with MEGlobal.”

New terminal company ATLHA Terminals has secured the exclusive rights to develop a liquid bulk storage facility in port of Duisburg, Germany. The terminal will be 75,000 cbm in size and will focus on the storage of distillates, gasoline and gasoline components.

The lease agreement with the port of Duisburg has been signed and ATLHA has completed first design plans to start applying for the required permits. The terminal will be underpinned by 7-10 year ‘take-or-pay’ offtake agreements, with letters of intent (LOIs) already signed by several oil trading companies.

Duisburg connects Rotterdam with the rest of Germany and Switzerland, with 20,000 river-going vessels and 20,000 trains transiting through the port each year. The new location will have access by rail, barge (max 135m LOA) and road. The new terminal should be fully operational in Q2 of 2020.

Duisburg is the world’s biggest river port and a major logistics hub for Western Europe

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MAGELLAN, INTERCONTINENTAL EXCHANGE OPEN SEASON

Recently, a total of 1.5 million barrels of Permian WTI storage at Magellan East Houston was leased on the ICE trading platform, with an average of 400,000 barrels leased per month. The auctions are designed to help bring additional transparency and efficiencies to the storage and transport of crude oil in the US Gulf Coast.

The facility has 8 million barrels of active capacity and the ability to expand storage at the terminal. The auctions are being hosted on the ICE trading platform to automate the process and improve transparency and efficiencies.

Magellan’s senior vice president of Commercial Crude Oil, Robb Barnes said: “We believe this initial storage auction on the ICE trading platform will lead the

Intercontinental Exchange and Magellan Midstream Partners have launched an auction for a portion of multi-month Permian WTI storage capacity at the Magellan East Houston Terminal.

way for many more successful auctions and other creative options at our East Houston crude oil hub in the future. We are excited about the efficiencies and flexible options this new service brings to our Gulf Coast customers.”

Global head of oil sales at ICE, Jeff Barbuto added: “At a time when North America is producing and exporting

record amounts of crude oil, this opportunity brings together the trading technology and risk management capabilities of ICE’s auction model and futures markets with Magellan’s extensive oil storage and transportation operations in the Gulf region. This is a solid first step towards developing new contracts in the U.S. Gulf Coast region through our alliance with Magellan.”

DELEK US HOLDINGS IS TO SELL FOUR ASPHALT TERMINALS TO AN AFFILIATE OF ANDEAVOR

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he transaction includes asphalt terminals in Bakersfield, Mojave and Elk Grove, California and Phoenix, Arizona, as well as Delek’s 50 percent interest in the Paramount-Nevada Asphalt Company, LLC joint venture that operates a terminal in Fernley, Nevada for US$75 million.

Chairman, president and CEO of Delek, Uzi Yemin said: “We explored different options for these assets, including a sale to our affiliate, Delek Logistics Partners, LP, and determined this transaction was the most attractive

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relative to other options. The net cash proceeds from this transaction could be used in our capital allocation programme to return cash to shareholders.

“We have additional logistics assets with potential EBITDA of approximately $73 million that may be dropped down to Delek Logistics Partners in the future, including the logistics assets at the Big Spring, Texas refinery with approximately $41 million of EBITDA. “With the completion of the acquisition of Alon USA Partners, we expect to move forward with the drop down of the Big Spring assets during the first half of 2018, subject to the completion of the customary

conditions related to the drop down process.”

Andeavor’s executive vice president of commercial and value chain, Keith Casey said: “We are excited to leverage our experience to grow our asphalt offering in the West Coast and Southwest regions, and we look forward to providing exceptional asphalt products and services to our new customers in California, Nevada and Arizona. We expect this investment to drive higher integrated margins across the value chain, offset impacts created by bunker fuel specification changes and improve the value of heavy resid produced at our refineries.”

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TA N K D EV E LO P M E N T

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Geelong refinery’s new tank can hold 100 million litres of crude

Australia’s largest crude oil tank was officially opened late last year by Viva Energy

A GIANT IN GEELONG

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he tank, which can hold 100 million litres of crude, is situated at Viva’s Geelong Refinery, in the state of Victoria.

Viva Energy GM refining Thys Heyns, said the A$50 million project was a significant growth investment for the refinery that will not only increase its production capabilities, but also improve fuel supply security for Victoria.

“This is a momentous day for the refinery, the Geelong community and Victoria. This tank increases our crude storage capacity by 40 percent, and in fact can hold enough crude oil to produce all the fuel required to meet Victoria’s needs for about three days.

“In addition to the tank, we’ve invested millions in other infrastructure projects such as the $23 million pumping station which increases the amount of fuel transported by pipeline to Melbourne by 25 percent and a $4 million upgrade to our jet fuel gantry to improve supply to

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Melbourne and Avalon airports.

“I’m also delighted to announce that we have received board approval to build a $15 million bitumen export facility, a $23 million, 25 million litre gasoline tank to increase our fuel storage at the refinery, and a $7 million revamp of our crude distillation unit furnace. All of these projects demonstrate our commitment to building a sustainable business in Geelong and support our customers in Victoria,” said Heyns.

FLEXIBILITY Mark Gerhardy, economics and scheduling manager, said the investment would bring major benefits, including the ability to source and process a wider range of crude oils.

“The more flexibility you have in processing crude oils, the better your opportunity to capture cheaper, more difficult-to-process crudes in smaller quantities, so it’s very much around us trying to improve our competitiveness

and efficiency,” he said.

The extra storage capacity will also cut down on the refinery’s shipping costs, because ships delivering crude oil won’t have to wait for storage space to become available, and it means the refinery will have extra reserves in the event a ship runs late.

The tank has an internal floating roof minimising evaporation losses and improving safety.

In attendance at the opening were the Hon Richard Marles, Federal Member for Corio, and Sarah Henderson, Federal Member for Corangamite.

Marles commented that that the tank’s size was symbolic of Viva Energy’s investment in local manufacturing in Geelong during the past three years.

“Viva Energy’s $300 million investment into the Geelong Refinery during the past three years represents a significant investment in traditional manufacturing across the region. With a workforce of around 700 at the refinery this is great news for regional Victorian jobs and workers,” he said.

Henderson added: “The refinery has been an important part of the Geelong community for more than 60 years so it is great to see all of this investment being made to secure its long-term future.”

The new crude tank stands 21m high, has a diameter of 84m and can hold up to 100 million litres of crude oil, the equivalent of 40 Olympic swimming pools.

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