Tank Storage Magazine October/November edition 2018

OCTOBER/NOVEMBER 18 Volume 14 Issue No.5

A NEXT GENERATION STORAGE TERMINAL

Alpha Terminals is building a new liquid bulk storage terminal in North Sea Port ahead of significant changes in the European market

IMO: HOW WILL INTERNATIONAL BUNKERING HUBS SURVIVE? Argus, Platts & Shipping Strategy examine how this regulatory change will affect the world’s three largest bunkering hubs

REGIONAL FOCUS: GERMANY & THE BALTICS

The voice of the storage terminal industry

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Find out more at www.ArabianChemicalTerminals.com E: info@arabianchemicalterminals.com T: +966 12 652 0000OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

CONTENTS

Contents

36

News TERMINAL NEWS 09 Europe 12

The Americas

18

Africa & Middle East

20 Asia 23 Incident report

33

Storage in Germany & the Baltics 30

A next generation storage terminal

36 Adding value to niche terminals in Europe 46 Russia dominates Baltic oil & gas supply

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Market analysis 27

A different demand outlook

33 A new energy chapter 39

IMO: How will key international bunkering hubs survive?

44 Market fundamentals impact storage opportunities in Singapore

OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

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CONTENTS

56

Contents Technical features 50

Technical news

56 Unique spiral construction method deployed for Western Europe’s largest tank terminal project 58 After Aliso: why benzene needs to be the industry’s next casualty 61 A new approach for accurate & reliable storage tank leak monitoring 65 Revolutionising tank inspections with drone technology 68 Self-expanding firefighting foam – a new approach to fire protection

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71 Are you under pressure to manage overpressure?

74 Process safety & operational risk management feeling the squeeze

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76 Construction opportunities for the US oil & gas market 79

Avoiding relief chatter on LNG storage tanks

83 Embracing the digital transformation 87 Spark from isolated hose ignites combustible powder atmosphere

Events 91

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The Mediterranean hub potential

93 Asia: the global growth engine 95 Navigating the new oil & gas normal 96 Advertisers’ index 97 Upcoming events 02

OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

CONTENTS

Swiss Fire Protection Research & Development AG

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OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

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CONTRIBUTORS

Contributors

OCTOBER/NOVEMBER 18 Volume 14 Issue No.5

A NEXT GENERATION STORAGE TERMINAL

OCTOBER/NOVEMBER 18 Volume 14 Issue No.5

Alpha Terminals is building a new liquid bulk storage terminal in North Sea Port ahead of significant changes in the European market

IMO: HOW WILL INTERNATIONAL BUNKERING HUBS SURVIVE? Argus, Platts & Shipping Strategy examine how this regulatory change will affect the world’s three largest bunkering hubs

REGIONAL FOCUS: GERMANY & THE BALTICS

The voice of the storage terminal industry

Front cover courtesy of Weeks Marine

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

INTERNATIONAL SALES MANAGER David Kelly t: +44 (0)20 3196 4401 e: david@tankstoragemag.com

HEAD OF MARKETING Jo Mayer t: +44 (0)20 3196 4365 e: jo.mayer@easyfairs.com

DATABASE MANAGER Alison Church t: +44 (0)20 3196 4305 e: alison.church@easyfairs.com

SUBSCRIPTION MANAGER John Darke t: +44 (0)20 3196 4383 e: john.darke@easyfairs.com

MANAGING DIRECTOR Matt Benyon t: +44 (0)20 3196 4310 e: matt.benyon@easyfairs.com

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@tankstorageinfo Tank Storage Magazine Tank Storage Magazine

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.

Periodical postage pending at Jamaica NY 11431. Subscription records are maintained at Easyfairs UK Ltd, 2nd Floor, Regal House, 70 London Road, Twickenham, TW1 3QS, UK. Air Business Ltd is acting as our mailing agent.

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OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

CONTRIBUTORS

Flying the flag 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 Inter Terminals Ltd +44 (0)1737 778108 Info@InterTerminals.com | www.InterTerminals.com Inter Terminals is owned by Inter Pipeline Ltd. www.interpipeline.com OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

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COMMENT

The start of something new

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t is encouraging to read reports such as OPEC’s annual outlook, showing optimism returning to the oil & gas market.

Over the next 20 years the oil industry needs to spend about $11 trillion to meet the world’s growing appetite for crude.

Spending on new oil production output fell significantly in 2015 and 2016 during a historic oil price downturn. Investments picked up slightly in 2017 compared to the previous two years, and are expected to be higher again in 2018, so it’s encouraging to see this upward trend looks set to continue.

This is of course excellent news for the logistics supply chain, which has been experiencing a degree of uncertainly thanks to political and economic turmoil coupled with a significant regulatory change on the horizon.

However, this uncertainty further emphasises the need for storage operators to have as much flexibility as possible built into their facilities to be able to adapt to these changing conditions.

In this edition, Charles Daly examines how the emergence of new technology as well as greater legislative controls will create a very different supply and demand picture for global oil & gas markets.

With less than 14 months to go until arguably one of the most significant regulatory changes the global market has experienced in several years, IMO 2020 remains a hotly debated topic in the industry. We examine how it will affect the world’s three largest bunkering hubs, with insights from Platts, Argus & Shipping Strategy.

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It is also the start of something new for the storage sector too. In this edition we also feature exclusive interviews with two new operators emerging onto the European storage market.

Dutch-based Alpha Terminals, established in 2017, is building a new liquid bulk storage terminal in the Vlissingen port area in North Sea Port.

The €250 million facility will store a range of liquid bulk products spread across 500,000 m3 of capacity. We speak to director Mike van Croonenburg about how the facility will be a next generation storage terminal.

Newcomer Atlha Terminals has ambitions to create a European network of up to ten niche storage terminals over the next five to 10 years. Speaking exclusively to Tank Storage Magazine Matthijs Reedijk explains more about the company’s plans to develop a liquid bulk storage terminal in the port of Duisburg, Germany as well as its recent investment in one of the first terminals in Amsterdam – Noord-Europees Wijnopslagbedrijf.

You will find copies of this edition at ADIPEC in Abu Dhabi, Opslagtanks in the Netherlands, as well as the 2nd Port of Tarragona hub day and Oil Terminal 2018 in Russia.

I hope you enjoy the read.

With best wishes,

Jasmin

OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

COMMENT

VALUE – Over 95% of AT&V’s 3,500 projects were awarded on lump sum price with industry leading schedules. From gas to cryogenic storage, contact AT&V to incorporate All The Value in your next project.

OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

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TERMINAL NEWS

All the latest terminal storage news from around the globe

21 Oiltanking Singapore to build storage tanks for Shell

09 Vopak announces expansions, investments & strategic review

12 Canadian court overturns approvals for Trans Mountain pipeline expansion

EUROPE

15 IEnova & Trafigura to build Mexican refined products storage terminal

09 Vopak announces expansions, investments & strategic review

10 Odfjell completes sale of Rotterdam terminal to Koole

16 Noble Midstream to form JV to build crude oil pipeline &

gathering system

Oiltanking expands Antwerp Gas Terminal

Stolt-Nielsen, Golar LNG & HĂśegh LNG announce LNG infrastructure investment

11 SEA-Invest & MOL Chemical Tankers to build storage terminal

PBF Logistics completes purchase of East Coast storage assets

Oneok to expand West Texas LPG pipeline system

Ineos announces â‚Ź200 million European investment

Africa & middle east

Valero acquires Peruvian fuel importer

18 BPGIC starts expansion of Fujairah storage terminal

the americas 12 EagleClaw Midstream to acquire Caprock Midstream

Canadian court overturns approvals for Trans Mountain pipeline expansion

Flint Hills Resources to expand Texas storage terminal

Iran to build 10-million-barrel storage terminal

Asia 20 Development of Chinese mega-integrated refinery and

chemical facilities

13 Pin Oak Terminals sold to MPLX

21 Mitsubishi acquires stake in Summit LNG Terminal

TransCanada to build coastal GasLink pipeline project

Oiltanking Singapore to build storage tanks for Shell

Visit www.tankstoragemag.com for the latest news and developments

CONNECT WITH US 08

OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

TERMINAL NEWS l EUROPE

TERMINAL NEWS EUROPE

Vopak announces expansions, investments & strategic review Vopak has announced it will expand its chemical terminal in Indonesia, invest in its Rotterdam and Antwerp terminal and conduct a strategic review of its terminals in Algeciras, Amsterdam, Hamburg & Tallinn.

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n its half year 2018 report, the company made a series of announcements on various terminals across the globe.

It will expand its chemical terminal in Merak, Indonesia with 50,000 m3 to 131,000 m3 of capacity. Merak is the main chemical import port of Indonesia and has the highest concentration of petrochemical facilities. The expansion is expected to be commissioned in the first quarter of 2020.

Vopak will also invest in its Europoort terminal in Rotterdam, the Netherlands, to support the IMO 2020 sulphur fuel cap. This investment is supported by customer commitments and will be completed in the second half year of 2019.

Additionally, it will strengthen its chemical storage globally by investing in a new jetty at Vopak Terminal Linkeroever in Antwerp, Belgium to enable planned future growth. Also, a major service improvement project will start at Vopak Terminal Penjuru in Singapore to service the chemical market in the country.

The company will also conduct a strategic review and ‘test the market value’ of its terminals in Algeciras, Amsterdam, Hamburg and Tallinn.

The company reports an EBITDA of €371 million compared to €394 million in the same period of 2017. Its occupancy rate of 86% is attributed to lower rented capacity mainly at the oil hub terminals caused by a less favourable oil market structure. Other product market segments showed continued stable demand for storage services.

Its expansion programme for 2019 will add 3.2 million m3 in 2019 with high commercial coverage and projects it has the potential to significantly improve the 2019 EBITDA.

The financial performance in 2018 is expected to be influenced by currency exchange movements of primarily the US dollar and Singapore dollar, and the currently less favourable oil market structure, impacting occupancy rates and price levels in the hub locations.

CEO Eelco Hoekstra says: ‘Given the market conditions to date, the results delivered are satisfactory.

‘We have successfully gone live with our new digital terminal management system in Long Beach and Los Angeles marking the start of our global roll out.

‘In our oil hub terminals, the priority was to invest for the IMO 2020 bunker fuel regulations. Our terminals in Fujairah, Rotterdam, and Singapore will be fully ready to support new market requirements.

‘In Saudi Arabia, together with our partners, we commissioned the last part of the industrial terminal Chemtank. The construction of our new industrial terminal in Pengerang is progressing well and first commissioning will take place end of 2018.

‘Our business development efforts in gas terminals have seen excellent progress. We announced the entrance in the growing LNG market in Pakistan, and the signing of two new joint ventures to develop LNG terminals in Germany and China.

‘In total, we currently have more than three million m3 under construction. We find this the natural moment for a strategic review and test the market value of our terminals in Algeciras, Amsterdam, Hamburg and Tallinn. This review is fully in line with the focus on growing our portfolio with the four strategic terminal types (major hubs, gas & LNG, industrial terminals, distribution in major markets).’

In our oil hub terminals, the priority was to invest for the IMO 2020 bunker fuel regulations

OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

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TERMINAL NEWS l EUROPE

Odfjell completes sale of Rotterdam terminal to Koole Koole Terminals has now become 100% owner of Odfjell Terminals Rotterdam.

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he facility, located in the heart of the Port of Rotterdam, will be rebranded to Koole Tankstorage Botlek (KTB). It stores both chemical and mineral oil products and operates a PID facility.

The sale will generate $100 million of cash proceeds to Odfjell.

John Kraakman, CEO of Koole Terminals, says: ‘We are pleased to extend our terminal network and will work hard to transform KTB further into a state-of-the-art terminal, where safety is our priority number one. We are convinced that introducing the Koole spirit of

Oiltanking expands Antwerp Gas Terminal Oiltanking Antwerp Gas Terminal is expanding its gas facility in Antwerp with a new propane tank as part of its partnership with Borealis.

The new 135,000 m3 propane storage tank will supply the Borealis production facility in Kallo, Belgium. Borealis, which produces polyolefins, base chemicals and fertilisers, will built a new world-scale propane dehydrogenation plants in addition to its existing facilities in Kallo. .

Oiltanking acquired the Antwerp Gas Terminal in mid-2016 and in early 2017, a contract was signed for the construction of a 135,000 m3 fully refrigerated butane tank that will go into operation in 2019.

Together with the newly planned propane tank, the terminal will have almost tripled its current capacity.

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true client dedication and entrepreneurship will help KTB to become a success.’

Kraakman adds that the acquisition fits in with the company’s long-term growth strategy. ‘It also gives us the opportunity to further extend our position in the circular economy by the storage of renewable products and the production of biofuels.’

Koole’s overall storage capacity will increase from 2.2 million m3 to 3.8 million m3.

Stolt-Nielsen, Golar LNG & Höegh LNG announce LNG infrastructure investment Stolt-Nielsen, Golar LNG and Höegh LNG have announced an investment of $182 million in Avenir LNG. The investment by the consortium will be contributed as cash and equity-in-kind and will fund the construction of six small-scale LNG carriers, a small-scale storage terminal and regasification facilities.

The company was formed by Stolt in 2017 to provide LNG to markets lacking access to natural gas pipelines. With this joint investment, Stolt will consolidate all its LNG activities into Avenir, including four LNG new buildings on order at Keppel Singmarine in Nantong, China and the joint venture LNG terminal and distribution facility to be constructed in the port of Oristano, Sardinia.

Avenir plans to source and ship LNG to the terminal using small LNG carriers, and to distribute the LNG in trucks and through regasification into local network grids.

Niels G. Stolt-Nielsen, CEO of Stolt-Nielsen, says: ‘The combination of Stolt-Nielsen’s logistics capabilities and our partners’ experience in LNG carriers, FSRUs and FLNGs positions Avenir as an emerging leader in small-scale LNG logistics for the power, bunkering, trucking and industrials markets.

‘With the implementation of the IMO’s 2020 emissions regulations approaching, demand for LNG as a cleaner, low-sulphur marine fuel is increasing. Each of the LNG newbuildings is designed to perform safe and efficient ship-to-ship LNG bunkering, which Avenir LNG plans to introduce at key strategic ports.’

OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

TERMINAL NEWS l EUROPE

Ineos announces €200 million European investment

SEA-Invest & MOL Chemical Tankers to build storage terminal MOL Chemical Tankers and SEA-Invest are investing up to €400 million to build a chemical storage terminal in the Port of Antwerp.

The joint venture SEA-MOL, with 51% by SEA-Tank and 49% by MOL Chemical Tankers, will secure 20.8 hectares of concession terrain located at the Delwaidedok in Antwerp from Antwerp Bulk Terminal. The JV will also enter into a concession agreement directly with the port for a further 24.4 hectares of land adjacent to this.

The dedicated liquid chemical storage terminal will serve as an efficient logistical hub for the storage, handling and added value activities for the petrochemical industry. This is in response to increasing requirements for chemical storage and added value activities in this sector in the region.

The terminal will be accessible for utilisation by all customers and shipping companies and access is guaranteed for sea-going vessels, barges, trucks and railcars. It will offer services such as blending, drum filling, filtration and ISO tank storage.

Through a phased investment SEA-MOL will build up to 500,000 m3 of storage for liquid chemicals, including organic, inorganic and base oils. The first phase is expected to be operational by mid-2021.

Jacques Vandermeiren, CEO of Antwerp Port Authority, says: ‘This investment is further confirmation of our port’s ability to attract major investors.

It will also boost our position as one of the largest chemical clusters in the world. This is very good news for the port, and for our economy.’

Ineos Oxide has announced plans to invest €200 million into its European business, with €150 million for its Zwijndrecht site in Antwerp.

Projects include growing ethylene oxide storage and distribution, debottleneck its plants and increase the production of ethylene oxide derivatives from the European market.

A sixth alkoxylation unit in Antwerp is due to start up at the end of 2018, along with a 2,000-tonne expansion of ethylene oxide storage capacity at the site.

The company is also upgrading EO production at Lavéra, France to support the growing EO needs in Europe. This phase of investment will improve reliability, efficiency and availability of its business in Antwerp, Belgium as well as sites in Köln, Germany and Lavéra, France.

Additionally, an agreement has been reached with RWE to buy the Inesco Combined Heat and Power Plant on the Ineos Zwijndrecht in Antwerp.

Graham Beesley, CEO of Ineos Oxide, says: ‘We are marking Ineos’ incredible global success at the place where it all began 20 years ago. To highlight our ongoing commitment to ethylene oxide, the first business to be bought by Ineos, we are announcing European investment of €200 million, with €150 million to be spent here at the Zwijndrecht site in Antwerp.’

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OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

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TERMINAL NEWS l THE AMERICAS

TERMINAL NEWS THE AMERICAS

EagleClaw Midstream to acquire Caprock Midstream EagleClaw Midstream will acquire Caprock Midstream Holdings for $950 million, which includes pipeline and storage assets.

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aprock provides gathering, processing and disposal services for natural gas, crude oil and produced water to producers in the Delaware Basin. It operates two natural gas processing facilities and will have 540 MMcf/d of processing capacity for the completion of two additional facilities currently under construction.

It operates 300 miles of gas, crude, natural gas liquids and water gathering pipeline and 23 million barrels of crude storage, which is expected to grow to more than 60 million barrels within the next 12 months.

The acquisition of Caprock is complementary to EagleClaw and further

solidifies the company’s position as the midstream partner of choice for producers in the Delaware Basin.

Once the acquisition is closed, EagleClaw will operate close to 850 miles of natural gas, natural gas liquids, crude and water gathering pipelines, 1.3 billion cubic feet per day of processing capacity and crude and water storage facilities, with more than 425,000 acres under longterm dedication for midstream services.

The acquisition will expand EagleClaw into crude and water-related services, providing opportunities for the company to offer a broad suite of midstream services to both existing and new customers.

Canadian court overturns approvals for Trans Mountain pipeline expansion The Federal Court of Appeal has overturned a decision by Canada’s National Energy Board to approve the Trans Mountain pipeline expansion.

In a unanimous decision, a panel of three judges said that the National Energy Board wrongly narrowed its review of the project to exclude related tanker traffic.

Additionally, the court also ruled that the federal government failed to adequately consult First Nations, as required by law.

The decision states: ‘The board made one critical error. The board unjustifiably defined the scope of the project under review not to include projectrelated tanker traffic. This unjustified exclusion of marine shipping from the scope of the project led to successive, unacceptable deficiencies in the board’s report and recommendations.

It continued: ‘Canada failed in Phase III to engage, dialogue meaningfully and grapple with the real concerns of the indigenous applicants so as to explore possible accommodation of those concerns.’

On August 31, Kinder Morgan Canada closed the sale of the Trans Mountain Pipeline to the Government of Canada for C$4.5 billion after it shareholders voted to approve the sale.

In a statement finance minister Bill Morneau said that they are reviewing the decision carefully to ‘ensure we are meeting high standards when it comes to both protecting the environment and

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meeting our obligations to consult with indigenous peoples’.

He said: ‘As we have said since the very beginning, building the Trans Mountain expansion project is in the national interest.

‘That is why our government made the decision earlier this year to purchase the existing Trans Mountain pipeline, and infrastructure related to the Trans Mountain expansion project.

‘We chose to acquire the project because it’s a sound investment, and because as a government we can manage risks that, in these particular circumstances, would have been difficult for any private sector company to bear.

‘And once we get past those risks, as we have said before, we will work towards transferring the project and related assets to a new owner or owners, in a way that ensures the project’s construction and operation will proceed in a manner that protects the public interest.’

The expansion project would nearly triple capacity on an existing line from Edmonton, Alberta, to a port in the Vancouver area for export. It was approved by the federal government in a landmark decision back in 2016.

Flint Hills Resources to expand Texas storage terminal Flint Hills Resources plans to expand storage and outbound crude loading capacity at its storage terminal in Ingleside, Texas to 300,000 barrels per day.

The work will comprise four new crude storage tanks, 60,000 barrels per hour of total loading capacity, plus the associated pumps and piping.

It is expected to be complete

by October 2019 subject to state permitting approvals. Once complete, Ingleside will have a total crude storage capacity of 3.5 to 4.0 million barrels.

The Ingleside terminal currently utilises two docks, including one that supports the loading of Suezmax-size vessels.

The company says it is evaluating a separate project that would allow it to load VLCC vessels in the future.

In addition to the expansion, the company also plans to build connections to the recently announced crude pipelines coming from the Permian Basin.

OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

TERMINAL NEWS l THE AMERICAS

Pin Oak Terminals sold to MPLX

Pin Oak Holdings has sold Pin Oak Terminals to MPLX for $450 million.

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s part of the transaction, Pin Oak Holdings will retain an economic interest in the facility. The terminal was the first asset developed, financed, constructed and operated by Pin Oak Holdings.

The greenfield site was acquired in 2012 with the objective of developing a full-service transportation hub on the Mississippi River.

The facility has four million barrels of fullyleased storage capacity and an operational deep-water ship dock. It can expand its capacity to 10 million barrels and is permitted for construction of a second deep-water ship dock.

Pin Oak Holdings is a partnership between Dauphine Midstream and Mercuria Energy Group.

C. Mike Reed, CEO of Pin Oak Holdings, says: ‘Our team is very proud to have built a premier storage and logistics facility in Louisiana, and this transaction further validates our development strategy and ability to execute.’

‘Brian Falik, Mercuria’s chief investment officer, adds: ‘Mercuria is pleased to have been a partner in constructing and operating a world-class terminal in Louisiana. We look forward to Pin Oak actively developing additional terminals and forging strong ties with key customers and local communities.’

Pin Oak Holdings recently started construction work on its liquid bulk export terminal in Corpus Christi, Texas. Since acquiring Pin Oak Corpus Christi in 2017, Pin Oak has successfully executed an interconnection agreement with a crude oil pipeline and secured a multi-million-barrel long-term crude oil storage contract, with the capacity to construct additional third-party storage.

Pin Oak Corpus Christi is expected to be operational during the fourth quarter of 2019.

TransCanada to build coastal GasLink pipeline project TransCanada will construct the Coastal GasLink pipeline project following the decision to sanction the LNG Canada natural gas liquefaction project.

The project is a 670 kilometre pipeline designed to transport natural gas from the Montney gas-producing region near Dawson Creek, British Colombia to the LNG Canada facility in Kitimat. The pipeline will have an initial capacity of 2.1 billion cubic feet per day (Bcf/day) with the potential for expansion to up to 5 Bcf/day.

Construction on the CAD$6.2 billion project is expected to begin in early 2019 with a planned in-service date in 2023. It is underpinned by a 25-year transportation service agreement with the LNG Canada participants.

© 2018 by AMETEK. All rights reserved.

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OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

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TERMINAL NEWS l THE AMERICAS

GTSA Board of Directors Siavash Alishahpour Managing Director, VTTI Fujairah Terminals

DESIGNED BY THE INDUSTRY, FOR THE INDUSTRY JOIN THE GLOBAL TANK STORAGE ASSOCIATION TO HEAR FROM THE BOARD OF DIRECTORS AND MORE!

Frank Erkelens CEO, Odfjell Terminals

Jaap Koomen General Manager, South Africa, VTTI

A platform for members to discuss industry core values - environment, safety and security Monthly e-newsletter with terminal news, industry information and updates from the Board of Directors on global initiatives for the industry

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John W. Schlosser President of Terminals, Kinder Morgan

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For more information contact J Margaret Dunn, Director General, Global Tank Storage Association OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5 14 E: margaret@global-tsa.com | T: +44 (0) 790 527 3691 | W: www.globaltankstorageassociation.com

TERMINAL NEWS l THE AMERICAS

IEnova & Trafigura to build Mexican refined products storage terminal Trafigura and IEnova have entered into a joint venture agreement to develop a marine storage terminal for refined products in Manzanillo, Colima.

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he companies have also executed a long-term terminal services agreement for 740,000 barrels of storage capacity at the marine facility for the receipt, storage and delivery of refined products.

As part of the agreement, IEnova also acquired 51% of the equity of the company whose subsidiary owns certain permits and land where the project is planned to be built.

IEnova will have control over all aspects of project implementation, including finalising permits, securing customers for the additional capacity, and completing detailed engineering, procurement, construction, financing, operation and maintenance of the terminal.

The facility will be capable of leading refined products onto rail and

trucks, which will enable its customers to supply fuels to demand centres in the Manzanillo, Colima area as well as in Guadalajara, Jalisco area, which is the second largest demand centre in Mexico. It is estimated that the initial phase of the terminal will have a storage capacity of 1.48 million barrels with opportunities for expansion.

The project is estimated to cost $200 million and commercial operations are expected to start at the end of 2020.

This terminal is IEnova’s sixth refined products terminal in Mexico, which the company says demonstrates its commitment to developing infrastructure in the country that enhances energy security and the reliability of refined product supply.

TANK AND TERMINAL

PBF Logistics completes purchase of East Coast storage assets

DEMOLITION

SERVICE

PBF Logistics has completed the acquisition of a series of storage assets from CPI Operations.

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he assets include a storage facility with four million barrels of multi-use storage capacity and other idled assets on the Delaware River near Paulsboro, New Jersey.

The other assets include an Aframax-capable marine facility, a rail facility, a truck terminal, equipment, contracts and other assets. With close proximity to the Paulsboro refinery, the assets are expected to provide synergy opportunities with PBF Logistics’ sponsor PBF Energy.

PBF expects to invest $8.5 million over the next two years in projects to enhance facility capabilities and expects to achieve run-rate EBITDA of $15.5 million at the end of 2020.

Matt Lucey, PBF Logistics executive vice president, says: ‘The ongoing execution of our strategic plan continues to deliver meaningful accretive growth for the partnership. The acquisition of the East Coast Storage Assets also strategically positions the partnership for the upcoming IMO’s low-sulphur fuel specification change in 2020 by adding significant marine-accessible storage assets to our portfolio.’

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OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

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TERMINAL NEWS l THE AMERICAS

Noble Midstream to form JV to build crude oil pipeline & gathering system Noble Midstream plans to form a 50/50 joint venture with Salt Creek Midstream for a crude oil pipeline and gathering system in the Delaware Basin.

The JV will be underpinned by acreage contributions from Noble and Salt Creek of 180,000 dedicated acres from Noble Energy and five other southern Delaware Basin producers, with a line of sight to additional dedications totalling 100,000 acres.

The 95-mile, 200,000 barrel of oil per day system will originate in Pecos County, Texas, with additional connections in Reeves County and Wink County, Texas.

It will be served by a combination of in-field crude gathering lines and a trunkline to Wink Hub. Once the transaction is closed in the fourth quarter of 2018, the project would be underpinned by 180,000 dedicated acres and nearly 100 miles of pipeline in Pecos, Reeves, Ward and Winkler Counties. This includes an in-basin oil transportation dedication of the southern portion of Noble Energy’s Reeves County position totalling 70,000 acres.

Salt Creek has started building the pipeline and is expected to be operational in the second quarter of 2019. The project provides access to 200,000 barrels of new crude oil storage, with expansion potential to 300,000 barrels.

Terry R. Gerhart, CEO of Noble Midstream, says: ‘The pipeline system will provide critical downstream connectivity and enhanced market optionality for producers in the southern Delaware Basin.’

Oneok to expand West Texas LPG pipeline system Oneok will invest $295 million to expand its West Texas LPG pipeline system.

The system provides natural gas liquids takeaway capacity for Permian Basin producers. The expansion is supported by long-term dedicated NGL production from six third-party natural gas processing plants in the Permian Basin that are expected to produce up to 60,000 barrels per day of NGLs. The expansion includes the construction of: - Four new pump stations, two pump station upgrades and pipeline looping that will increase the West Texas LPG mainline capacity by 80,000 barrels per day.

- Additional infrastructure to connect West Texas LPG with Oneok’s previously announced Arbuckle II Pipeline project Terry Spencer, Oneok president and CEO, says: ‘This second expansion of the West Texas LPG Pipeline system will serve continued growth in the Permian Basin and positions Oneok for additional future expansion opportunities in the Permian.’

The pipeline provides takeaway capacity to Permian Basin producers and consists of 2,600 miles of NGL pipeline in Texas and New Mexico.

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OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

TERMINAL NEWS l THE AMERICAS

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TERMINAL NEWS l AFRICA & MIDDLE EAST

TERMINAL NEWS AFRICA & MIDDLE EAST

BPGIC starts expansion of Fujairah storage terminal

Iran to build 10-millionbarrel storage terminal A build-to-operate-transfer contract has been signed for a 10-million-barrel crude oil storage facility.

Brooge Petroleum and Gas Investment Company (BPGIC) has started work on the second phase of its Fujairah terminal with an extra 601,600 m3 of storage capacity.

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ocal media reports that at a ribbon cutting ceremony to mark the phase II expansion, OPEC secretary-general Mohammed Barkindo said: ‘This ceremony marks a momentous occasion in the exciting storage of BGPIC, as well as the Emirate of Fujairah, which is playing an increasingly vital role in global energy trade.

‘This world-class facility will help to bolster the oil and gas industry’s presence in the emirate and is meeting a growing demand for storage capabilities in this dynamic and exciting market.’

The expansion will bring total storage capacity at the facility to 1.2 million m3.

These tanks are mainly designed for storing crude oil as well as flexibly storing black products. This phase will also comprise building a new pump manifold with high flow rate pumps meeting FOTT VLCC requirements and additional jetty lines. It is expected to be complete by the fourth quarter of 2019.

Iran’s Petroleum Engineering and Development Company signed the contract with a domestic firm. The project is part of the Iranian Petroleum Ministry’s strategic plan to develop Jask Port and deliver crude oil from Goreh, Bushehr to Jask in southern Iran.

The National Iranian Oil Company has 5,000 acres of coastal land near Jask city for the construction of special oil, gas, refining and petrochemical projects.

Thanks to a permit for the construction of the 42-inch GorejhJask crude oil pipeline, part of this land has been allocated for the construction of an oil terminal for the export of crude oil and the construction of crude oil storage tanks at Jask port.

The tanks are being built with 10-million-barrels of light and heavy crude oil capacity. They will store the crude oil pumped from the pipeline. The €200 million project can be expanded to a storage capacity of more than 30-million-barrels of crude oil.

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OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

TERMINAL NEWS l ASIA

OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

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TERMINAL NEWS l ASIA

TERMINAL NEWS ASIA

Development of Chinese mega-integrated refinery and chemical facilities Demand for higher base chemicals is driving the development of mega- integrated refinery and chemical facilities in China.

P

rivate Chinese chemical producers, including Hengli and Rong Sheng are integrating their chemical plants with refineries by building mega-integrated facilities.

In a report, Wood Mackenzie says that both these projects,

which are expected to become operation in the next 12 to 24 months, are expected to add more than nine million tonnes of paraxylene capacity by 2021.

This wave of Chinese investment outpaced robust demand growth for the polyester chain and as a result, the consultancy company expects the country to reduce imports for the product by more than four million tonnes by 2021.

These new sites could yield up to 45 weight % of chemicals, two to three times more than a traditional integrated site, while producing heavy crudes.

Sushant Gupta, research

director, Wood Mackenzie, says: ‘The Hengli and Rong Sheng projects could add up to 500,000 barrels per day of medium-toheavy crude demand in the market when they start operation.

This additional demand would further tighten the heavy crude market as we expect a shortage of heavy crude at a global level in the medium term.

‘As these integrated sites are mostly configured to process Middle Eastern crude, the ongoing trade tension between China and the US is unlikely to affect the projects. US sanctions on Iran crude exports, on the

other hand, could limit their crude choices.

‘We expect knock-on implications on the refining and fuels markets in Asia and beyond as these projects also produce large amounts of co-products such as petrol and middle distillates (jet fuel and diesel/gasoil).’

China is expected to have a large surplus of about 780,000 b/d in middle distillates and about 500,000 b/d in petrol by 2020. About 20% and 40% of the surplus in middle distillates and petrol, respectively, comes from the Hengli and Rong Sheng projects alone.

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OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

TERMINAL NEWS l ASIA

Mitsubishi acquires stake in Summit LNG Terminal Mitsubishi Corporation will acquire 25% interest in Summit LNG Terminal and has agreed to develop a LNG receiving terminal that uses a FSRU in Bangladesh.

F

ollowing the acquisition, 75% of Summit LNG Terminal will be held

by Summit Corporation and remaining by MC. As part of the project, the terminal will install an FSRU 6km off the coast of the island of Moheshkali in the Cox’s Bazar district of Chattagram division in Bangladesh. It will receive and regasify LNG procured by Petrobangla, the national oil and energy company.

Construction of the terminal

started at the end of 2017 and commercial operations are expected to start next March. The planned LNG volume is 3.5 million tonnes per annum.

LNG receiving terminals that use FSRUs can be installed at a lower cost and constructed within a shorter period than conventional onshore receiving terminals.

The are an effective means to build LNG receiving capacity in emerging countries. It is expected that demand for such terminals will grow.

Oiltanking Singapore to build storage tanks for Shell

FIREPROOF

Oiltanking Singapore Chemical Storage has signed a long-term storage agreement with Shell Eastern Petroleum for additional propylene storage.

The Oiltanking and Macquarie Infrastructure and Real Assets joint venture has an existing C3 system in place for Shell and the new addition of two propylene bullet tanks will complement and strengthen the strategic partnership between Shell and the company.

By securing this new expansion for propylene, a key feedstock for Jurong Island, Oiltanking Singapore Chemical further anchors its position as a key chemical/propylene hub and integrated logistics and service provider for feedstock.

With these new bullet tanks, the terminal will have total capacity of 409,000 m3 spread across 84 tanks.

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OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

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02.08.2018 08:53:58

TERMINAL NEWS l AFRICA & MIDDLE EAST

dvd

RHS International is a manufacturer and worldwide distributor of pipe supports for all areas of piping in (petro)chemical plants and power stations, based in Belgium.

Visit us on www.rhs-int.com or get in touch via info@rhs-int.com 22

OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

INCIDENT REPORT

INCIDENT REPORT A summary of the recent explosions, fires and leaks in the tank storage industry 3/9/18

6/10/18

Vohburg, Germany

Goyang, Gyeonggi Province, Korea

Bayernoil refinery

Daehan Oil Pipeline Corporation

A fire ignited at Varo Energy’s 120,000 barrel per day Vohlburg plant in the Bayernoil refinery complex following an explosion. The fire injured 10 people and forced the evacuation of nearby residents. The fire was quickly controlled, and the plant was quickly secured.

An investigation was launched to establish the cause of the incident.

A sky lantern released by a construction worker resulted in a large fire that ripped through a large oil storage facility. A gasoline storage tank exploded and erupted into flames after the lantern was released by the Sri Lankan worker. According to news reports, the lantern flew 300 meters from him and landed on the lawn of the storage facility. The lawn quickly caught fire and spread to the ventilation system of the tank, triggering the explosion. The blaze was extinguished 17 hours after it started. Police have requested an arrest warrant for the suspect.

However the operator of the facility has come under some criticism for not being able to extinguish the blaze in its first attempt. According to reports, the operator turned on automated foam extinguishers but this did not succeed in extinguishing the flames. It also had no fire detectors installed outside the oil tank, and workers were not aware of the incident until the explosion. Daehan Oil Pipeline issued an apology and said it would work to ensure a similar incident would not occur.

19/8/18

28/8/18

Wichita Falls, Texas Plains All American Pipeline A fire ignited in a crude oil storage tanks and caused the closure of the Basin pipeline. The blaze was limited to a single storage tank at the Wichita Falls Station and was quickly extinguished.

OCTOBER/NOVEMBER 2018 VOLUME 14 ISSUE NO.5

Burutu LGA, Delta State, Nigeria Shell Petroleum Development Company of Nigeria The Trans Ramos pipeline was shut-in after crude oil spilled from a ruptured section. The pipeline supplies crude to the SPDC joint venture owned Forcados Oil Terminal in western Niger Delta. The company reported that it was able to quickly recover most of the spilled oil and that a joint team of investigators was studying the cause and impact of the spill.

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