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INTEGRATED SYSTEMS
New Nigerian storage China’s oil futures contract
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Corpus Christi – America’s export hub
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
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SUMMER 2018 edition
• • • • •
T E R M I N A L S ma g a z ine
Accommodating VLCCs
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Truck loading/unloading systems Ship loading/unloading systems Rail car loading/unloading systems Pipeline metering systems Blending systems
SUMMER 2018
EU Gas Directive concerns
While designing and manufacturing the highest accuracy meters in the industry, Brodie also provides complete solutions for metering applications such as... • • • • •
StOrage
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INTEGRATED SYSTEMS While designing and manufacturing the highest accuracy meters in the industry, Brodie also provides complete solutions for metering applications such as...
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Truck loading/unloading systems Ship loading/unloading systems Rail car loading/unloading systems Pipeline metering systems Blending systems
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• • • • •
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
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
www.diorca.com
Frater Radulphusweg, #1-A, Habaai Willemstad, Curacao, Dutch Caribbean email tanks@diorca.com
WORD FROM THE EDITOR
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Blending boost? It has played no small role in raising and spreading global prosperity, yet the global shipping sector is responsible for about 5 percent of oil demand, similar to the combined demand for oil of Germany, France and the UK. It also accounts for about 2 percent of global carbon dioxide emissions, more than the much maligned (at least among greens) international aviation industry. So the news that the International Maritime Organization (IMO) has finally agreed on its first ambitious strategy to reduce greenhouse gas emissions in international shipping to meet the Paris Agreement goals is welcome. The deal is a bit of a fudge; virtually all such international agreements are out of necessity. A group of European countries and some low-lying Pacific island states wanted a 70-100 percent reduction target in greenhouse gas (GHG) emissions, while another group, including the world’s largest ship registry Panama, thought big reductions were neither urgent nor realistic. So the target of a 50 percent cut by 2050 was arrived at, a figure first put forward by Japan. A successful outcome is by no means guaranteed. The International Energy Agency has produced a menu of policy supports that would help, such as adoption of enhanced efficiency standards, stimulating investments for retrofits and even a CO2 price for shipping fuel. Nevertheless, in tandem with the IMO’s 0.5 percent sulphur cap in bunker fuel, which comes into force in 2020, these significant steps towards lower emissions could be good news for storage terminals, provided they have, or can invest in, blending capabilities. The IMO strategy should see a decline in demand for tank space to house dirty bunker fuel, and higher demand for tanks in which ‘cleaner’ fuels can be blended on site. Already one company, Dubai-based Earth Wealth Energy, has announced plans to build a 360,000 cbm fuel oil storage and treatment facility at the port of Fujairah in readiness for the IMO’s 0.5 percent cap. And then, of course, there is LNG, although just how much demand will be generated by shipping is open to debate. What it all means is that nimble and flexible terminal operators can still profit from big, long term changes to structural oil demand even when at first sight these look more like challenges rather than opportunities.
Neil Madden EDITOR
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CONTENTS
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70
Expanding Corpus Christi
Wall St over-reacts
Contents 13
World terminal news
67
Bigger in Botlek
All the news from the global terminal sector
Larger ships will soon be able to sail into Rotterdam’s Botlek area
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All gas and gaiters
Proposed changes to the EU Gas Directive might not have the desired effects
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108 123
America’s export gateway
Port of Corpus Christi is quickly becoming a strategic hub for US crude oil exports
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African revolution
A Nigerian company aims to transform the country’s storage and refining sectors Leak protection
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Ready when you are!
Most US Gulf ports can’t yet accommodate VLCCs
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Upstream & Downstream
Latest news from along the bulk liquid supply chain
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Go with the flow
US LNG may create new pricing fundamentals over the coming five years
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What the FERC!
Did Wall St over-react to the FERC’s ruling on MLP investors’ income tax calculations?
115
The EU Gas Directive
123
Check list
129
Yuanna bet?
132
A case of incompatibility
137
CST celebrating 125 years
147
Out of the blocks
156
Equipment focus
164
Technology & automation
189
Upcoming events
A lack of detailed inspection procedures contributed to a crude oil leak from an Enbridge storage tank
What should we make of China’s newlylaunched crude oil futures contract?
CSB releases key lessons from a serious 2016 incident
CST Industries CEO Tim Carpenter speaks about the firm’s history and plans for the future
What could blockchains do for the energy industry?
Applications and case studies from Newson Gale, Ergil, Advanced 3D Laser and Emerson
What’s new in process industry technology, equipment & automation
A review of StocExpo, preview of ILTA, plus other conferences and exhibitions this year for the global storage business
Some good, some not so good
The past year saw differing results posted by major terminal groups
STO RAG E T E R M I N A L S M AGA Z I N E S U M M E R 2 01 8
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HEADING
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PUBLISHER Greg Emmenis greg@storageterminalsmag.com EDITOR Neil Madden editor@storageterminalsmag.com ONLINE EDITOR
Katerina Kerr katerina@storageterminalsmag.com The front cover is proudly sponsored by CST Industries, Inc. (cstindustries.com)
COMMERCIAL DIRECTOR
Abby Davey abby@storageterminalsmag.com DIGITAL MARKETING MANAGER
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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!
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From Sensor to Boardroom.
Inventory management solutions of Endress+Hauser! Endress+Hauser inventory management solutions help you to reduce inventory costs, to improve customer satisfaction and to increase productivity. From easy monitoring of tanks and silos through to highly accurate tank gauging at tank farms and the automation of terminals, Endress+Hauser – being one of the leading manufacturers of instrumentation – offers, apart from all relevant measuring technologies, also the appropriate software packages to monitor your inventories. Endress+Hauser also supports you in the optimization of your supply chain with individual software solutions for your inventory management and the integration of this data into your company processes and your ERP system. www.endress.com/ims
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WORLD TERMINAL NEWS
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World
Terminal NEWS
GULF COAST ETHYLENE EXPORT plan
N
ova Chemicals Corporation subsidiary, Nova Chemicals Olefins LLC, and a subsidiary of Energy Transfer Partners, Sunoco Partners Marketing & Terminals, have entered into a non-binding MoU for a potential joint venture ethylene export terminal on the US Gulf Coast. The parties are seeking market commitment for an anticipated start-up of the terminal by mid-2020. The terminal is expected to have the capability to export 800 kta (1.8 billion pounds) a year of ethylene to the global market. “An ethylene export terminal builds on Nova’s leadership in the continually expanding North American ethylene industry,” explained Naushad Jamani, Nova’s senior vice president, olefins & feedstock. “Together with the 2017 acquisition of our interest in the Geismar, Louisiana Olefins facility and our recently announced proposed joint venture in Texas with Total and Borealis, this project would extend our presence in the Gulf Coast.” The project would connect the Lone Star NGL Mont Belvieu storage facility at Mont Belvieu, Texas, where the Nova
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Ethylene Hub operates, and the Louisiana ethylene market to the export facility via existing pipelines already approved for ethylene transport. The project would provide significant value by linking low cost Gulf Coast ethylene production to derivative plants around the world. The Nova Ethylene Hub is the primary transaction point for the purchase and sale of ethylene in
the Gulf Coast region, and is operated by Nova under a long-term lease from Lone Star, which is an affiliate of SPMT. The hub would provide an active ethylene source for delivery to the export facility by both physical transfer and exchange. The proposed joint venture is subject to sufficient market interest and customary conditions and approvals.
The project would connect the Lone Star NGL Mont Belvieu storage facility, where the Nova Ethylene Hub operates, and the Louisiana ethylene market to the export facility via existing pipelines
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WORLD TERMINAL NEWS
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CHANGE AT THE TOP FOR TSA
HES owns a number of liquid and dry bulk terminals in Europe
MACQUARIE, GOLDMAN TO BUY HES Dutch terminals group HES International is set for new ownership. Macquarie European Infrastructure Fund 5, which is managed by Macquarie Infrastructure and Real Assets (MIRA), and West Street Infrastructure Partners III (WSIP), which is managed by the Merchant Banking Division of Goldman Sachs, have reached an agreement in principle to buy HES from the current owners, Riverstone Holdings LLC and The Carlyle Group. Capital for the original investment by Riverstone and Carlyle came from two funds: Riverstone/Carlyle Global Energy & Power Fund IV, and Carlyle International Energy Partners (CIEP). HES owns a number of liquid and dry bulk terminals, mostly in Rotterdam and elsewhere in the Netherlands, but also in Germany, France, Belgium, Poland and the UK. Among the company’s assets is Botlek Tank Terminal in Rotterdam. The company will now initiate consultations with the relevant works councils. The financial terms of the transaction were not disclosed and completion will remain subject to legal and antitrust approvals. Under Riverstone’s and Carlyle’s ownership, the HES management team has been implementing a €700 million transformation and growth strategy, including the recent financial investment decision on the Hartelstrip expansion project. In tank storage, investments include increasing capacity of the
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Botlek terminal from 200,000 cbm to over 620,000 cbm by 2019 and the construction of the Hartel Tank terminal. In Wilhelmshaven, Germany, HES repurposed a former refinery into a commercial tank terminal and is currently preparing to restart part of the primary distillation processing capacity under a tolling agreement. These investments are all based on long term contracts and together they are expected to triple operational liquid bulk capacity to 3.2 million cbm. HES CEO Jan Vogel said: “With the support of Riverstone and Carlyle we have become one of Europe’s most successful independent bulk handling companies providing products and services to our customers at 18 sites across eight countries. Over the past 3.5 years, we have implemented a focused strategy that makes optimal use of our prime real estate in Europe’s key ports and allows us to adjust flexibly to future changes and opportunities that energy transition will bring to our sector. We have also built a strong pipeline of additional growth projects for both our liquid bulk and dry bulk businesses to support our strong position in each of our core businesses. We are confident MIRA and WSIP will be strong, long term partners for our continued future growth and continued international expansion.”
Andrew Amos has stepped down as president of the UK Tank Storage Association (TSA). Amos will take over the role of vice-president for a period of 12 months to help with the implementation of TSA’s forward plans, while Paul Denmead, director of terminal operations UK for World Fuel Services, who is the current vice-president, will take over as president with immediate effect. Amos commented: “As I have now retired from my position as projects director for UM Storage, it is appropriate that I also hand over the presidency of the TSA to Paul Denmead. The past 18 months leading the TSA have been a privilege and I have seen a dramatic change in the direction and growth of our association. Our status and visibility with government and related agencies has grown significantly which is critically important to serving the needs of our expanding membership. I am confident that Paul Denmead and Peter Davidson will continue to drive forward change, ensuring that we continue to be the focus of knowledge and experience for bulk liquid storage and terminal operations. I will remain as Vice-President of the TSA so that I can offer any support and guidance required.”
KM TANKS UP IN ALBERTA Kinder Morgan Canada completed two additional storage tanks at its Base Line Terminal, near Edmonton, Alberta, in March. The two tanks increase crude oil storage capacity by 800,000 barrels. The facility in Sherwood Park began service in January with four other tanks and storage capacity for 1.6 million barrels. “The team’s ability to deliver these assets early is great news for both our customers and our business,” said John Schlosser, president, terminals of Kinder Morgan Canada. “Bringing these tanks online ahead of schedule will allow us to benefit immediately from strong industry demand for crude storage.” The terminal is a 50-50 joint venture with Keyera. When completed, the facility will provide a total of 4.8 million barrels of crude storage and will include 12 tanks, all of which are fully contracted. The remaining six tanks are to be constructed in the third and fourth quarters of 2018. The terminal is connected to Kinder Morgan pipelines, rail connections and export pipelines. An additional expansion of 1.8 million barrels is planned in Phase 2 of the project buildout.
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CUSTODY TRANSFER MEASUREMENT Brodie BiRotor Plus positive displacement meters offer unsurpassed accuracy and reliability. As the best in class meter for accuracy of custody transfer measurement, they set the industry standard.
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H EW AO DR IN LD G TERMINAL NEWS
USD IN MEXICO EXPANSION USD Group LLC, through its subsidiary USD Marketing Mexico S de RL de CV, plans to expand its network of refined products destination terminals across Mexico, including two terminals in the Central Chihuahua area. The Ciudad Cuauhtémoc terminal development is expected online by mid-2018 and will include manifest rail and truck transloading, as well as land for expansion. Additionally, USDG is formalising plans for a second refined products distribution terminal in the Central Chihuahua area, which will feature unit train, tank storage and truck loading. The planned terminals are expected to improve the distribution of refined products across the state of Chihuahua, which includes approximately two million residents and one of Mexico’s most concentrated and productive agricultural and mining hubs. “Along with the Querétaro terminal, our expansion into the Central Chihuahua area demonstrates our commitment to improving the delivery of critical products across the region,” said Steve Magness, USDG’s vice president, business development. “We believe our network of scalable terminals will enable our customers to meet the rapidly growing demand for refined products in Mexico more effectively.” Both terminals will be serviced by Ferromex railroad, a subsidiary of Grupo México Transportes, with access to all North American Class 1 railroads.
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NEW GULF COAST ETHANE EXPORT FACILITY
E
nergy Transfer Partners and Satellite Petrochemical USA Corp have entered into definitive agreements to form a joint venture, Orbit Gulf Coast NGL Exports, LLC with the purpose of constructing a new export terminal on the US Gulf Coast to provide ethane to Satellite for consumption at the company’s ethane cracking facilities in China. Orbit will also construct a 20ins ethane pipeline originating at ETP’s Mont Belvieu fractionators that will make deliveries to Orbit’s ethane export terminal on the Gulf Coast as well as domestic markets in the region. At the terminal, Orbit will construct an 800,000 barrel refrigerated ethane storage tank and a 175,000 bpd ethane refrigeration facility. ETP will be the operator of the Orbit assets. Additionally, ETP will construct and own the infrastructure required to supply ethane to the pipeline and
load the ethane on to very large ethane carriers (VLECs) destined for Satellite’s newly constructed ethane crackers in China’s Jiangsu Province. Subject to Chinese government approval, it is expected that the Orbit terminal will be ready for commercial service in the fourth quarter of 2020. As part of these agreements, ETP and Satellite also executed agreements for the sale of ethane at the terminal. ETP will provide Satellite with approximately 150,000 bpd of ethane under a long term, demand-based agreement. ETP will also provide storage and marketing services for Satellite. ETP (via Sunoco Logistics) was the first company in North America to export ethane by using its Mariner West system which exports product to Canada. Subsequently, in March 2016 ETP became the first company in North America to export ethane via waterborne vessel out of its Marcus Hook terminal, which also serves domestic markets.
ETP will supply ethane to Satellite for the latter’s ethane crackers in Jiangsu Province
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