Tank Storage Magazine North America Edition 2018

North American Edition 2018

GROWING CONTANDA’S STORAGE FOOTPRINT IN HOUSTON The company talks more about how it is growing its midstream infrastructure with two construction projects

UNLEASHING THE POTENTIAL OF AMERICAN ENERGY

Since President Trump released his America First Energy Plan, oil & gas production has increased & regulatory burdens have reduced

NORTH AMERICAN EDITION

The voice of the storage terminal industry

PROFILE l XXXXXX XXXXXX

ENGINEERING FABRICATION CONSTRUCTION REPAIR

Chester, PA Leesville, SC Cropwell, AL Atascadero, CA 2

NORTH AMERICAN EDITION 2018

CONTRIBUTORS

Contributors NORTH AMERICAN EDITION 18

North American Edition 2018

GROWING CONTANDA’S STORAGE FOOTPRINT IN HOUSTON The company talks more about how it is growing its midstream infrastructure with two construction projects

UNLEASHING THE POTENTIAL OF AMERICAN ENERGY

Since President Trump released his America First Energy Plan, oil & gas production has increased & regulatory burdens have reduced

NORTH AMERICAN EDITION

The voice of the storage terminal industry

Front cover courtesy of Varec

PUBLISHER Margaret Dunn t: +44 (0)20 3551 5721 e: margaret@tankstoragemag.com

EDITOR Jasmin McDermott t: +44 (0)20 3196 4402 e: jasmin@tankstoragemag.com

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Tank Storage Magazine (ISSN 1750-841X) is published six times a year (in February, March, May, August, October and November) by Easyfairs UK Ltd, 2nd Floor, Regal House, 70 London Road, Twickenham, TW1 3QS, UK. The 2018 US Institutional subscription prices is $243. Airfreight and mailing in the USA by Agent named Air Business, C/O Worldnet Shipping USA Inc., 155-11 146th Street, Jamaica, New York NY11434.

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NORTH AMERICAN EDITION 2018

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CONTENTS

Contents News 06

Terminal news: North America

19

Tank terminal update: North America

Terminal profiles 20

24

Growing Contanda’s storage footprint in Houston

Contanda Terminals talks about how it is growing its midstream infrastructure in Houston with two construction projects

Petrochemical production fuels a bright storage future

Stolthaven New Orleans explains how it is positioning itself to capitalise on favourable market conditions along the US Gulf Coast

31 A new name in Cushing

Getka Energy, a crude oil logistics provider, has ambitious plans for its latest purchase in Cushing, Oklahoma

36 Storage for the US’s largest refining market

Seabrook Logistics is adding more storage for crude oil & condensate in response to growing demand for midstream infrastructure in the Houston Gulf Coast

20 02

Market analysis 27

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Oil market eyes November Iran sanctions hiatus

33 Unleashing the potential of American energy 38 Expanding the US global market share 45 Trade war questions temper US midstream sector growth plans

Technical features 48

Technical news

50

Safe and productive solutions for tank cleaning

52

Ground improvement plays a supporting role for storage tanks

55

The RFQ – the key to a successful tank project

Events 58

A new storage frontier

60

Advertisers’ index NORTH AMERICAN EDITION 2018

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COMMENT

The American potential

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he US oil and gas production boom is certainly a bright spark in an otherwise tumultuous global trade picture.

The rebound in oil prices has further boosted production, particularly in the prolific Texas and New Mexico Permian Basins, and with that comes a demand flood for midstream infrastructure to support this increased output. Coupled with the Mexican energy reforms and the lifting of the crude export restrictions you have all the key ingredients for a thriving storage terminal sector.

And President Trump’s America First Energy Plan is also fuelling the country’s oil & gas growth. The plan clearly sets out the Administration’s ambitions to unleash the potential of Americanproduced energy and at only 500 days in, several energy-related regulatory burdens have been reduced.

In this dedicated North American edition, we take a closer look at this energy plan, what regulations and policies under the Obama-era have been rolled back as well as the effect it has had on energy production. John King, partner, at Breazeale, Sachse & Wilson says that it is clear steps have been taken by the Trump Administration to increase production and reduce regulatory burdens, which has created a favourable ripple effect on the country’s economy.

This increase in production has also resulted in demand for midstream assets, particularly in Texas, outstripping supply in some cases, fuelling a series of new build construction projects and expansions of existing terminals.

In this edition, we speak to LBC Tank Terminals and Magellan Midstream

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Partners about their $120 million expansion at Seabrook Logistics in the Houston Gulf Coast on the back of this increased production as well as growing demand for exports.

Contanda Terminals is also expanding its storage footprint in Houston with two construction projects as demand for petrochemical and hydrocarbon storage grows. We speak exclusively to president and CEO G.R. ‘Jerry’ Cardillo about how these projects fit in with the company’s growth plan.

Further North, a new company has emerged in the pipeline crossroads of the world – Cushing. Getka Energy has purchased the former Pacer Energy Terminal and plans to upgrade the terminal to allow for increased throughput and delivery into the Enterprise Products Partners’ Cushing Terminal. We speak to CEO Dariusz Cichocki about the company’s plans to develop a hub and spoke platform.

This is in addition to articles looking at the Iran Nuclear Deal, the construction boom in Texas as well as analysis on energy markets in the US. As the ‘undisputed world leader in oil and gas production’ the US market is certainly an interesting one, so I hope you enjoy this dedicated edition looking at this exciting region.

With best wishes,

Jasmin

NORTH AMERICAN EDITION 2018

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TERMINAL NEWS NORTH AMERICA All the latest storage news from North America

Kinder Morgan, EagleClaw & Apache to develop Permian pipeline Kinder Morgan Texas Pipeline, EagleClaw Midstream Ventures and Apache Corporation plan to develop the Permian Highway Pipeline Project for the region’s growing natural gas production.

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he consortium of companies have signed a letter of intent for the project which will provide an outlet for increased natural gas production for the Permian Basin to growing market areas along the Texas Gulf Coast.

The $2 billion project is designed to transport up to 2 billion cubic feet per day of natural gas through 430 miles of 42-inch pipeline from the Waha, Texas area to the US Gulf Coast and Mexico markets.

The project is expected to be in service in late 2020. Natural gas supply will be sourced into the project from multiple locations, including KMI’s, EagleClaw’s and Apache’s existing systems in the Permian Basin, with additional interconnections to both intrastate and interstate pipeline systems in the Waha area.

Kinder Morgan and EagleClaw will be the initial partners, with 50% ownership each, and Apache will have an option to acquire up to 33% equity in the project from the initial partners.

Apache and EagleClaw will be significant shippers on the proposed pipeline, with Apache planning to commit up to 500,000 dekatherms per day. Kinder Morgan will build and operate the pipeline.

Sital Mody, CCO of Kinder Morgan Natural Gas Midstream, says: ‘The project is structured to provide unrivalled market optionality for Permian producers.

‘By contracting for space on KMI’s extensive intrastate systems, the project will offer seamless nominations to the Katy and Agua Dulce market hubs, pipeline headers into LNG export facilities on the Texas Gulf Coast,

Kinder Morgan’s terminals segment up Kinder Morgan’s terminal segment earnings recorded a 3% increase thanks to storage capacity growth at key hubs.

Contributions from its liquids business, which accounts for 80% of the segment total, we up 3% compared to the second quarter of 2017 driven by storage capacity increases in key hubs along the Houston Ship Channel and Edmonton, Alberta, as well as the full-period impact of the new-build Jones Act tankers delivered in 2017.

Kinder Morgan president Kim Dang says: ‘These contributions were partially offset by the impact of certain divestitures, lower charter rates on existing Jones Act tankers, and lower tank utilisation at our Staten Island, New York location.’

At the company’s Base Line Terminal in Alberta, construction of all major facilities is materially complete. The first six tanks at the 12-tank, 4.8-million-barrel facility, were placed into service in the first quarter of 2018. Four of the remaining tanks are expected to be placed into service in the third quarter of 2018 with the final two tanks in service in the fourth quarter. The project is expected to be delivered under budget, owing to project management efficiencies and cost savings.

In May, Kinder Morgan and a large, international integrated energy company entered into a binding Terminal Services Agreement to construct two new distillate tanks with a combined capacity of 200,000 barrels and enhance the railcar unloading capabilities at Kinder Morgan’s Vancouver Wharves terminal in North Vancouver. Permitting efforts are underway, and the project is expected to be placed in service in mid-2020.

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multiple pipelines delivering gas into Mexico, including Valley Crossing, NET Mexico, and KMI’s Border and Monterrey pipelines, and numerous other intrastate and interstate pipelines.

PBF Logistics to buy New Jersey storage facility PBF Logistics has agreed to purchase CPI Operations from Crown Point International, which includes a storage facility & other idled assets on the Delaware River for $107 million.

The East Coast Storage assets include a storage facility with four million barrels of multi-use storage capacity, with over 50% being heated storage, an Aframax-capable marine facility, a truck terminal, equipment, contracts and other assets.

With close proximity to the Paulsboro refinery, the assets are expected to provide synergy opportunities at the company’s sponsor, PBF Energy.

Once the transaction is closed, PBF Logistics expects to invest $8.5 million over the next two years on projects to enhance capabilities at the facility and expects to achieve run-rate earnings before interest, taxes, depreciation and amortisation of $15.5 million at the end of 2020.

Matt Lucey, PBF Logistics executive vice president, says: ‘The acquisition of the East Coast Storage assets will be immediately accretive and will strategically position the partnership for the upcoming IMO’s low sulphur fuel specification change in 2020 by adding significant marine accessible storage assets to our portfolio that are capable of handling a range of material from finished petroleum products and residual fuel oils to heavy, high sulphur refinery feedstocks.’

NORTH AMERICAN EDITION 2018

TERMINAL NEWS l NORTH AMERICA

Enterprise to build offshore oil export terminal in Texas Enterprise Products Partners plans to build an offshore crude oil export terminal off the Texas Gulf Coast.

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he terminal would be capable of fully loading VLCCs, which have capacities of two million barrels and provide the most efficient and cost-effective solution to export crude oil to the largest international markets in Asia and Europe.

The company has started front-end engineering and design and preparing applications for regulatory permitting. Based on initial designs, the project could include 80 miles of 42-inch diameter pipeline to an offshore terminal capable of loading and exporting crude oil at 85,000 barrels per hour.

A.J. ‘Jim’ Teague, CEO of Enterprise’s general partner: ‘On the heels of second successful loading of a VLCC at the Texas City terminal, we are now planning to expand our capabilities to load crude oil faster and more cost efficiently without the need for lightering vessels. ‘’Given the long-term outlook for growing supplies of US crude oil production, increasing global demand requiring super tankers, and the future limitations of Gulf Coast port and

lightering capacities, we are confident this project will be embraced and supported by both domestic and international customers.

‘Capital and infrastructure to support our project would be solely provided by private capital and would not be reliant nor

contingent upon state or federal government agency financial support or infrastructure development. We believe this would enable us to deliver this project in a timely manner once permits are granted and the project is underwritten.’

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TERMINAL NEWS l NORTH AMERICA

Magellan to expand refined petroleum products pipeline system Magellan Midstream Partners will expand the western leg of its refined petroleum products pipeline system in Texas.

The company previously announced its plans to expand the capacity of this line segment to 150,000 barrels per day from its current capacity of 100,000 barrels per day. Based on additional committed volume received as part of its recent supplemental open season, Magellan now plans to expand this capacity to 175,000 barrels per day at a cost of $500 million.

The expanded capacity will handle incremental shipments of petrol and diesel fuel to demand centres in Abilene, Midland/ Odessa and El Paso, Texas and New Mexico.

The pipeline system can also access markets in Arizona and Mexico via connections to other pipelines.

The expansion will be accomplished by a combination of increased pipeline diameter along the existing route and construction of 140 miles of new pipe from Hearne to Alexander, Texas. Connectivity to the

NORTH AMERICAN EDITION 2018

ExxonMobil Pipeline Company’s terminal in Wink, Texas will also be added as part of the expansion.

It is expected to be available by mid-2020.

The company says that construction of new refined products terminals in both Midland and the Delaware Basin remain under review.

Michael Mears, CEO, says: ‘Magellan’s expansion of our refined products pipeline system into West Texas provides our customers with continued flexibility to meet growing demand for petrol and diesel fuel in the region with supply from our Gulf Coast and Mid-Continent origins.

‘Further, construction of the new pipeline segment between Hearne and Alexander has the strategic advantage of providing additional capacity along our extensive pipeline network to satisfy strong demand for refined products destined for the Dallas-Fort Worth metropolitan area.’

Ikon Midstream opens new Texas fuel terminal Ikon Midstream has established a new fuel terminal for the Laredo, Texas market.

The company says it is the first fuel terminal in Laredo and that it owns its own patent on petrol detergents and is the first independent blender to cross petrol into Mexico.

Rhett Kenagy, CEO and managing partner of Ikon Midstream, says: ‘We are excited to launch the first fuel terminal of Laredo. We observed that the city lacks a fuel terminal and the fuel distributors here usually have a hard time in sourcing fuels.

‘The lack of competition also offers an open market for us to scale up our growth in the region.

‘We promise high end blended fuels at competitive prices for the local US distributors here who cater to a large client base in Mexico.’

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TERMINAL NEWS l NORTH AMERICA

Williams acquires midstream assets in Colorado Williams has announced two midstream transactions for $1.173 billion that will result in its entry into Colorado’s Denver-Julesburg Basin.

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illiams – a provider of large-scale infrastructure – and KKR plan to buy Discovery DJ Services from TPG Growth.

Discovery is a Dallas-based provider of natural gas and oil gathering and natural gas processing services in the southern portion of Colorado’s DJ Basin.

When the acquisition closes, which was expected in early August, Williams and KKR will own the entirety of the Discovery midstream business through a joint venture. Williams will be the operator of Discovery.

Discovery provides midstream services to producers drilling the prolific Niobrara and Codell stacked-pay zones of the basin. The system, strategically located in Weld and Adams countries in Colorado, includes both natural gas and crude oil gathering pipelines, cryogenic gas processing, liquids handling and crude oil storage.

The assets include 60 million cubic feet per day of gas processing capacity with an additional 200 million cubic feet per day plant that is fully permitted and under construction and is expected to be in service by the end of 2018.

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The Discovery assets also include 130 miles of natural gas pipeline and 260,000 acres dedicated for gas gathering and processing plus an additional 60,000 acres for oil gathering.

Alan Armstrong, president and CEO of Williams, says: ‘Adding the fast-growing Discovery midstream business, including sites with permitting underway for greater than 1 bcf/d of gas processing to our portfolio, follows our strategy of connecting the best supplies to the best markets.

This is a great opportunity to expand our asset footprint into a premium-growth basin and brings the benefits of the Williams capability suite to better serve producers in the DJ Basin.

‘This transaction allows Williams to take advantage of synergies between the Discovery assets and our downstream business via the DJ Lateral of Overland Pass Pipeline. We will now have the opportunity to integrate output from these acquired assets with production from our existing processing footprint in the west segment into our advantaged downstream assets, including OPPL and the Conway fractionator and storage facilities.’

This is a great opportunity to expand our asset footprint into a premiumgrowth basin and brings the benefits of the Williams capability suite to better serve producers in the DJ Basin

NORTH AMERICAN EDITION 2018

TERMINAL NEWS l NORTH AMERICA

Trafigura plans first deepwater US oil export terminal Trafigura has submitted plans to build the first US offshore deepwater oil export terminal in Corpus Christi, Texas.

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exas Gulf Terminals, owned by Trafigura US, submitted its permit application for the Texas Gulf Terminals project on July 9 to the US Department of Transportation.

The facility will allow VLCCs capable of carrying up to 2 million barrels of crude and other tankers to load cargo safely, directly and fully via a single-point mooring buoy system (SPM).

The use of SPMs eliminates unnecessary ship traffic in inland ports as well as the ‘double handling’ of the same crude oil, reducing the opportunity for spills and emissions each time the crude oil is transferred.

Currently, no US inland ports are capable of fully loading a VLCC and to do so requires multiple ship to ship transfers in lightering zones out at sea.

Trafigura says that once built, this SPM will ease infrastructure barriers to crude oil exports, grow the US economy and support jobs.

Corey Prologo, director, Texas Gulf Terminals and director of Trafigura North America, says: ‘The Texas Gulf Terminals project will give US crude oil producers, particularly Texas operators, safer, cleaner and more efficient access to very large crude carriers, ensuring that the economic and employment benefits of increasing domestic crude production can be fully realise right here at home.’

The project is the latest in a series of long-term investments that Trafigura has made in commodities across the US. This includes a nearly $1 billion investment in Buckeye’s marine export terminal and condensate splitter in Corpus Christi, Texas.

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Contanda to build new storage terminal on Houston Ship Channel

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Contanda Terminals will construct a new, largecapacity storage terminal on its property along the Houston Ship Channel as part of plans to expand into the petrochemical and hydrocarbon markets.

The new terminal – Contanda Houston Jacintoport Terminal – will provide up to three million barrels of additional petrochemical and hydrocarbon storage capacity. It will be located at the company’s Jacintoport terminal site, on the Contanda Steel location, which the company acquired at the end of 2016.

The expansion will add a third Houston-based bulk liquid storage facility to the company’s portfolio. In addition to the storage capacity, it will have a deep-water ship dock, two barge docks along with truck and rail infrastructure.

Work is expected to start in October and it is expected to be operational during the fourth quarter 2019.

G.R ‘Jerry’ Cardillo, president and CEO of Contanda, says: ‘This project meets the growing needs of our customers who have requested additional storage and logistics services to support their growth initiatives. The new Contanda Houston Jacintoport Terminal will strengthen our position as a leading storage provider in our growing, renewable, petrochemicals and hydrocarbons markets and allow us to continue our growth platform in and around the Houston Ship Channel.’

Read an exclusive interview with Contanda president & CEO G.R. ‘Jerry’ Cardillo on page 18 & 19.

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TERMINAL NEWS l NORTH AMERICA

Idled refinery to re-start in US Virgin Islands to help meet IMO requirements Owners of an idled oil refinery in St. Croix, US Virgin Islands, that was once among the world’s largest, plan to invest $1.4 billion to refurbish and restart a portion of the plant.

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rcLight Capital Partners, a private equity firm expects the former Hovensa refinery on St. Croix to be able to process 200,000 barrels per day of crude and deliver fuels to market by January 2020, officials said at a news conference on the island.

The Boston-based company spent two years studying the market and developed ‘a refinery profile we see thriving in the current marketplace,’ says John Erhard, an ArcLight partner.

It aims to produce fuels that meet an IMO mandate calling for large vessels to switch by 2020 to fuels containing no more than 0.5% suphur from 3.5%.

If the renamed Limetree Bay refinery can be refurbished to produce the fuels in the next 18 months, it could benefit from expected lower prices for heavy crude and strong demand for its fuels, said analysts.

‘If you have the ability to make compliant bunker fuel, you can make a lot of money,’ says John Auers, executive vice president at consultancy Turner, Mason & Co. Mark Broadbent, principal research analyst at Wood Mackenzie, also says demand for IMO 2020 fuels should favour Limetree Bay, but it is

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unclear whether ArcLight can restore operations within its budget and by 2020.

‘Getting an idled refinery up and running could be very expensive,’ he explains.

In the 1970s, the refinery on St. Croix was able to process 650,000 bpd. It halted processing in 2012, filed for bankruptcy three years later and was sold to ArcLight and trading firm Freepoint Commodities.

The two companies run Limetree Bay Terminals, a 25 million barrel oil storage and marine terminal on the site.

As part of its agreement with the USVI government, Limetree has purchased 225 acres of land and more than 100 homes surrounding the refinery to facilitate the restart, US Virgin Islands Governor Kenneth Mapp said in an interview.

‘They’ve already begun spending money,’ Mapp says. ‘Assets and resources are already on their way.’

NORTH AMERICAN EDITION 2018

TERMINAL NEWS l NORTH AMERICA

ExxonMobil supports Permian Highway Pipeline project ExxonMobil has signed a letter of intent for its subsidiary to contract up to 450,000 dekatherms per day of capacity on the Permian Highway Pipeline project.

The $2 billion project by Kinder Morgan Texas Pipeline, EagleClaw Midstream Ventures and Apache will provide an outlet for increased natural gas production from the Permian Basin to growing market areas along the Texas Gulf Coast. It is designed to transport up to 2 billion cubic feet per day of natural gas through 430 miles of pipeline from the Waha to Katy, Texas areas, with connections to the US Gulf Coast and Mexico markets.

It is expected to be in service in late 2020.

Sara Ortwein, president, XTO Energy, says: ‘The Permian Highway Pipeline will provide additional capacity for reliable transportation of natural gas to the US Gulf Coast.

Sital Mody, president of Kinder Morgan Natural Gas Midstream says that the support of ExxonMobil will help accelerate its path to a final investment decision.

ArcLight acquires Midcoast Operating

TANK AND TERMINAL DEMOLITION

ArcLight Capital Partners has acquired Midcoast Operating from Enbridge for $1.1 billion, including pipeline, processing plants and storage assets.

Midcoast consists of three large, legacy gathering and processing systems in Texas and Oklahoma, a long-haul NGL transmission system delivering NGLs from multiple supply areas and a marketing and logistics business.

The assets include 11,900 miles of gas and NGL pipelines, 25 processing plants with over 2 billion cubic feet per day of capacity and 12 treating plants, an E/P fractionator and numerous liquid logistics assets, including storage terminals.

Dan Revers, founder and managing partners of ArcLight, says: ‘We believe Midcoast represents a rare opportunity to acquire a large scale, diversified midstream business with exciting commercial and growth capital investment opportunities. We are very excited to add the Midcoast platform to our portfolio of midstream investments.’

Rob Bond, who will become CEO of the company under ArcLight’s ownership, adds: ‘Midcoast owns a premier set of midstream assets that provide excellent Gulf Coast connectivity for natural gas and NGLs, bringing wide basis differentials that have arisen between producing basins and coastal demand centres.’

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TERMINAL NEWS l NORTH AMERICA

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NORTH AMERICAN EDITION 2018

TERMINAL NEWS l NORTH AMERICA

BP acquires BHP’s US oil and gas assets BP has agreed to acquire a portfolio of unconventional oil and gas assets from BHP in a move that will upgrade and reposition its US onshore oil and gas business.

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he deal will bring BP extensive oil and gas production and resources in the Permian and Eagle Ford basins in Texas and in the Haynesville gas basin in Texas and Louisiana.

Under the terms of the agreement, BP America Production Company will acquire from BHP Billiton Petroleum 100% of the issued share capital of Petrohawk Energy Corporation – a wholly owned subsidiary of BHP – for $10.5 billion.

The transaction is expected to be complete by the end of October.

The assets include 470,000 net acres of licences, including a new position for BP in the Permian-Delaware basin, and two positions in the Eagle Ford and Haynesville basins. These have a combined production of 190,000 barrels of oil equivalent per day.

The acquisition will significantly increase the liquid hydrocarbon proportion of BP’s production and resources in the US onshore, to around 27% of production and 29% of resources from the current 14% and 17% respectively.

Bob Dudley, BP group chief executive, says: ‘This is a transformational acquisition for our Lower 48 business, a major step in delivering our upstream strategy and a world-class addition to BP’s distinctive portfolio.

LBC & Magellan announce Seabrook storage terminal expansion LBC Tank Terminals and Magellan Midstream Partners are increasing crude oil and condensate storage & dock capabilities at Seabrook Logistics in the Houston Gulf Coast.

Seabrook Logistics, owned equally by subsidiaries of Magellan and LBC, plans to construct nearly 111,000 m3 of additional crude oil and condensate storage in Seabrook, Texas as well as develop a new Suezmax dock with up to a 45-foot draft and 400,000 barrels per day of dock capacity.

Once the $120 million expansion is complete, Seabrook will own 490,000 m3 of storage, deep water access through and Aframax dock and Suezmax dock and connectivity to Magellan’s Houston crude oil distribution system.

It is expected to be operational by late 2019.

Michael Mears, Magellan’s CEO, says: ‘With increased crude oil production in the Permian Basin and other prolific regions, demand for crude oil storage and export capabilities continues to grow in the Houston Gulf Coast area.’

‘With the expansion of the Panama Canal and the growing role of the US in increased flows of oil, this is an important development for our project and for the success of our customers,’ says John Grimes, LBC’s group COO. Read more about the Seabrook Logistics expansion project on page 36 & 37.

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NORTH AMERICAN EDITION 2018

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TERMINAL NEWS l NORTH AMERICA

Eagle LNG opens Maxville LNG facility Eagle LNG Partners has opened its Maxville LNG facility with a production capacity of 200,000 gallons per day with a one-million-gallon storage tank.

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he plant has been operating since early 2018 and is built to supply Eagle LNG’s marine fuel depot located on the Port of Jacksonville’s Talleyrand marine terminal.

Eagle LNG will fuel Crowley Maritime’s two new LNG-powered Commitment Class ships for US mainland to Puerto Rico trade from its Talleyrand marine fuel depot in addition to serving growing domestic and Caribbean needs for clean-burning, economical LNG. Eagle LNG’s marine fuel depot is a shore-side facility offering 500,000 gallons of LNG bunkering capability, while occupying a small two-acre

footprint, allowing bunkering at Crowley’s berth where their ships are homeported.

The fuel depot it the first of its kind globally. As a permanent marine infrastructure, it delivers a long-term LNG bunkering solution at the Port of Jacksonville for both domestic and international marine trade routes.

The LNG facility and LNG marine fuel depot each contributes to the LNG infrastructure needed for shipping companies to comply with the IMO’s rule requiring the reduction of marine fuel sulphur content by January 1, 2020.

Tallgrass to build Gulf Coast storage terminal Tallgrass Energy will develop a new crude oil pipeline from Cushing, Oklahoma to the St. James, Louisiana refining complex as well as a separate new export-capable liquids terminal.

The proposed Seahorse Pipeline is expected to be 30 inches in diameter and 700 miles long, with the capacity to transport up to 800,000 barrels of crude oil per day from Cushing to the Louisiana Gulf Coast.

It will operate as a common grade batch system that, along with Tallgrass’ Pony Express Pipeline, will ensure domestic refiners and international markets have access to clean barrels from five different production basins.

The new storage terminal, Plaquemines Liquids Terminal, is a joint development project with Drexel Hamilton Infrastructure Partners and is being structured as a public-private partnership. It is expected to be fully operational in the second quarter of 2020 and is permitted for up to 20 million barrels of storage.

It will have the ability to fully load and unload post panama vessels and barges on its multiple deep-water docks. Tallgrass anticipates building a separate offshore pipeline extension that would give the terminal the added capability of loading VLCCs by the third quarter of 2021.

Tallgrass Energy president and CEO David Dehaemers says: ‘The Seahorse Pipeline and Plaquemines Liquids Terminal projects build on our strategy to provide diversity of supply and greater market optionality to our customers. These projects provide highly desired take-away capacity from Cushing to the St. James refining complex, providing interconnectivity to more than 2.5 million barrels per day of refining capacity and access to international markets.’

The company expects to launch its initial open season for the pipeline on August 15, which will run for 45 days.

16

Magellan reports higher second quarter financials Magellan Midstream Partners has reported higher second quarter financials for 2018 compared to the same period the previous year.

The company reports net income of $214.4 million for Q2 2018 compared to $210.4 million for Q2 2017.

Transportation and terminals revenue for its refined products segment increased $13.2 million between periods driven by record shipments from strong demand for refined products in large part due to higher distillate demand in crude oil production regions served by the company.

The current period has also benefited from higher storage and other ancillary service fees along Magellan’s refined products pipeline system associated with increase customer activity.

In its crude oil segment, transportation and terminals revenue increase $29.5 million primarily due to contributions from the company’s condensate splitter in Corpus Christi that began commercial operations in June 2017.

In its marine storage segment, transportation and terminals revenue declined $3.6 million primarily due to lower utilisation, resulting from the timing of maintenance work and the ongoing impact of tanks damaged by Hurricane Harvey that are still under repair.

Michael Mears, CEO, says: ‘Magellan continues to generate strong financial results bolstered by increased demand for our refined products and crude oil infrastructure.

‘In additional to solid demand for our current services, we remain committed to developing attractive expansion projects to meet our customers’ needs while generating attractive returns for our investors for years to come.’

NORTH AMERICAN EDITION 2018

TERMINAL NEWS l NORTH AMERICA

Inter Pipeline reports strong financials Moda Midstream to acquire Ingleside Energy despite challenging storage market Inter Pipeline has reported strong second quarter 2018 financials of $261.5 million – an increase of $54.5 million compared to the same period in 2017. reflective of unfavourable market conditions in Denmark. Utilisation remained strong in Sweden and Germany, where facilities are operating near capacity.

Civil construction and fabrication activities at the $3.5 billion Heartland Petrochemical Complex advanced considerably during the quarter. Piling activities were completed for the propane dehydrogenation facility, with more than 3,000 in place, and concrete work is well underway.

Fabrication in Alberta and globally is progressing with the 90-meter propane/propylene splitter and an 800-tonne reactor expected to move to the Heartland Complex site near Fort Saskatchewan, Alberta in early 2019.

Moda Midstream plans to acquire the Oxy Ingleside Energy Centre, including crude oil and LPG infrastructure, from Occidental Petroleum.

IEC is a storage and export terminal that provides access to global markets for crude oil and LPG producers and marketers. It is located in Ingleside, Texas, near the mouth of the Corpus Christi Ship Channel.

It links Eagle Ford Shale and Permian Basin production to key domestic and international markets. It will be connected directly to multiple ‘next generation’ long-haul crude pipeline that allow for bathcing and segregation of crude oil deliveries at some of the most competitive tariff available to shippers.

It has 2.1 million barrels of oil storage capacity and three deep-water berths for crude oil. The facility is currently undergoing expansion to add storage capacity and infrastructure for contracted customer growth. There is scope for additional expansion on the 900-acre site.

In addition, Moda also acquired LPG storage, berths and infrastructure, certain crude oil pipeline assets and offsite logistics locations. Looking ahead, the company plans to expand services through controlled-growth development for additional hydrocarbons expected to reach the terminal in the coming years.

Field Erected Storage Tank Member Companies: Advance Tank* Caldwell Tanks Inc. Chattanooga Boiler & Tank Company* Fisher Tank Company* Kennedy Tank & Manufacturing Co., Inc. McDermott (CB&I)* Paso Robles Tank Phoenix Fabricators & Erectors, Inc. T Bailey, Inc. Tarsco Member Supplier Companies: The Sherwin-Williams Co.* Tnemec Company Inc.* * denotes company presenting at the STI/API Tank Fundamentals Seminar at the 2018 API Storage Tank Conference & Expo

Steel Tank Institute/ Steel Plate Fabricators Association

NORTH AMERICAN EDITION 2018

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T

he company says this increase is largely driven by record performance in the NGL processing business, which continues to have strong production volumes.

However, its bulk liquid storage segment experienced a decline in financial – reporting funds from operations of $17.4 million in the quarter, compared to $25.3 million in the second quarter of 2017. Storage demand for certain petroleum products in Europe continued to be impacted by a backwardated commodity pricing environment.

Average storage utilisation rates during the second quarter were 84% compared to 98% for the same period in 2017. The decline in overall utilisation was largely

Centre storage terminal

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TANK TERMINAL UPDATE l NORTH AMERICA

TANK TERMINAL UPDATE NORTH AMERICA Keyera

Tallgrass Energy

Location: Cushing, Oklahoma Products: Crude oil Capacity: 4.5 million barrels Completion: Mid-2020 Construction/expansion/ The Wildhorse Terminal will include acquisition: 12 storage tanks and will be pipeline connected by two existing storage terminals at Cushing Comment: The majority of the capacity is backed by fee-for-service, take-or-pay storage arrangements

Location: Products: Capacity: Completion: Construction/expansion/ acquisition:

Comment:

JupiterMLP Location: Port of Brownsville, Texas Products: Hydrocarbons Capacity: 2.5 million barrels Completion: 2020 Construction/expansion/ The Jupiter Export Terminal will be able acquisition: to blend refined products including diesel and petrol and it will be directly connected to the Permian Basin via pipeline Comment: In addition, the terminal will also have a new liquid cargo dock which will be able to load and unload vessels of up to 65,000 deadweight tonnes

Texas Gulf Terminals Location: Products: Construction/expansion/ acquisition:

Comment:

Corpus Christi, Texas Crude oil The facility will allow VLCCs and other tankers to load cargo safely, directly and fully via a single-point mooring buoy system Trafigura has submitted a permit application to the US Department of Transportation

LBC Tank Terminals, Magellan Midstream Partners Location:

Phillips 66 Location: Old Ocean, Texas Products: NGL Capacity: 15 million barrels Completion: Late 2020 Construction/expansion/ The company is expanding Sweeny Hub acquisition: with two 150,000 barrel-per-day NGL fractionators, more storage capacity and pipeline infrastructure Investment: $1.5 billion Comment: Once complete it will have 400,000 barrels per day of NGL fractionation capacity and access to 15 million barrels of storage capacity

Enterprise Products Partners Location: Products: Construction/expansion/ acquisition:

Comment:

Louisiana Gulf Coast Crude oil 20 million barrels Second quarter 2020 The Plaquemines Liquids Terminal will have the ability to fully load and unload post panama vessels and barges on its multiple deep-water docks The company anticipates building a separate offshore pipeline extension that would give the terminal the added capability of loading VLCCs by the third quarter of 2021

Texas Gulf Coast Crude oil The offshore crude oil export terminal will be capable of fully loading VLCCs and could include 80 miles of pipeline to an offshore terminal capable of loading and exporting crude oil at 85,000 barrels per hour It will provide the most efficient and cost-effective solution to export crude oil to the largest international markets in Asia and Europe

Seabrook Logistics, Seabrook, Texas Products: Crude oil, condensate Capacity: 111,000 m3 Completion: Late 2019 Construction/expansion/ In addition to the extra storage capacity, a acquisition: new Suezmax dock with up to a 45-foot draft and 400,000 barrels per day of dock capacity Investment: $120 million Comment: The companies say the expansion is driven by increased crude oil production in the Permian Basin and the expansion of the Panama Canal

Kingfisher Midstream, Blueknight Energy Partners, Ergon Location: Oklahoma Products: Crude oil Completion: Mid-2019 Construction/expansion/ The Cimarron Express Pipeline will serve acquisition: STACK producers from northeastern Kingfisher Country, Oklahoma to Blueknight’s Cushing, Oklahoma crude oil terminal Comment: It will provide direct market access at Cushing for producers and will have initial capacity of 90,000 barrels per day, expandable to over 175,000 barrels per day

This list is based on information made available to Tank Storage Magazine at the time of printing. If you would like to update the list with any additional terminal for future issues, please email: jasmin@tankstoragemag.com

NORTH AMERICAN EDITION 2018

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