Tank Storage Magazine June/July 2019

JUNE/JULY 19 Volume 15 Issue No.3

CAPTURING HIDDEN STORAGE OPPORTUNITIES Howard Energy Partners is exploring opportunities in key US Gulf Coast markets in response to the growth of hydrocarbon production

MAKE ROOM FOR THE BOOM US crude infrastructure expansions & developments are expanding at a rapid pace amid record production & export levels

REGIONAL FOCUS: THE AMERICAS

The voice of the storage terminal industry

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CONTENTS

Contents

48

News TERMINAL NEWS 09 Europe 13 Asia 15

The Americas

25

Africa & Middle East

26 Global 28 Incident report

Storage in the Americas

34

30

Tank terminal update: the Americas

34

A new deepwater midstream frontier

36 Regulatory update for US tank terminal operators

38 JUNE/JULY 2019 VOLUME 15 ISSUE NO.3

38

Capturing hidden storage opportunities

41

Make room for the boom

45 From short to long – the US oil revolution 48 Optimising the US Gulf Coast energy potential 52 Storage stability amid a mixed production picture in the Americas 01

CONTENTS

Contents

57

Biofuels storage 57 Storage for Europe’s energy transition 59 Storage for a growing product market

Technical features 62 Technical news 71

Should the industry rethink storage tank fire protection

75

Early detection system: the key to preventing fire incidents

79

Evolution of cyber security within tank terminals

82 Optimised terminal management at your fingertips 85

New generation of screw pumps for tank terminals

89

How to avoid insurance renewal surprises

93

Evolving US regulations impact chemical storage tanks

96

Challenging loading arm convention & safe access with innovation

99

Why use duplex stainless steels for storage tanks

89

02

Events 60

Tank Storage Awards winners showcase

104 Storage success at the ILTA 108 Speaker interviews

Interviews with some of the speakers ahead of the FETSA conference in Tarragona on June 12-13 116 Advertisers’ index 117 Upcoming events

104

JUNE/JULY 2019 VOLUME 15 ISSUE NO.3

CONTENTS

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CONTRIBUTORS

JUNE/JULY 19 Volume 15 Issue No.3

CAPTURING HIDDEN STORAGE OPPORTUNITIES Howard Energy Partners is exploring opportunities in key US Gulf Coast markets in response to the growth of hydrocarbon production

MAKE ROOM FOR THE BOOM US crude infrastructure expansions & developments are expanding at a rapid pace amid record production & export levels

REGIONAL FOCUS: THE AMERICAS

The voice of the storage terminal industry

Front cover courtesy of CST Industries

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

MARKETING MANAGER John Dowd t: +44 (0)20 3196 4389 e: john.dowd@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

CEO EASYFAIRS UK & GLOBAL 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 seven times a year (in February, March, May, August, September, October and November) by Easyfairs UK Ltd, 2nd Floor, Regal House, 70 London Road, Twickenham, TW1 3QS, UK. The US annual subscription price is $243. Airfreight and mailing in the USA by agent named WN Shipping USA, 156-15, 146th Avenue, 2nd Floor, Jamaica, NY 11434, USA. Periodicals postage paid at Jamaica NY 11431. US Postmaster: Send address changes to Tank Storage Magazine, WN Shipping USA, 156-15, 146th Avenue, 2nd Floor, Jamaica, NY 11434, USA. 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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JUNE/JULY 2019 VOLUME 15 ISSUE NO.3

Photo credit: Diorca Industrial CA

Contributors

JUNE/JULY 19 Volume 15 Issue No.3

CONTRIBUTORS

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05

COMMENT

The next midstream revolution

A

ll aspects of society are gradually becoming more sustainable. This drive to increase sustainability is present in all aspects of our lives – at home we are encouraged to recycle and reuse rather than simply bin and at work we adopt new policies to do business in a more ethical way. This sustainability drive will certainly shape how society uses energy in the future and the industry is already adapting to this new future.

Predominantly driven by the Paris Agreement, a global commitment to combat climate change, several requirements have been placed on the industry to make changes through the reduction of emissions, using different energy products to create new low-carbon feedstocks and fuels as well as utilising technology to generate energy.

Investments by oil & gas companies indicates how the industry can evolve to help mitigate climate change. This edition of Tank Storage Magazine examines how storage and oil & gas companies are investing in new, sustainable initiatives.

Vesta Terminals is investing in its biofuels infrastructure at its Antwerp terminal as EU directives for renewable energy use increase customer demand. The investment will increase capacity for dedicated FAME storage as well as introduce new pipelines, nitrogen blanketing and heating infrastructure.

Over in the US, Sprague Energy advanced its sustainability efforts through the application of solar panels on its existing petroleum storage tanks. We speak to Sprague’s managing director of sustainability Jay Leduc about how the solar panels not only reduce operating costs but also meet the company’s sustainability goals and why storage operators are showing increasing interest in the technology.

This edition delves deeper into the storage and energy markets in the US, which is still achieving record high crude oil production output, coupled with soaring exports. This production surge is leading the build out of new pipeline and storage infrastructure in key hubs to keep the crude flowing.

Recognising future demand for efficient export capabilities and to help mitigate

06

bottlenecks, Sentinel Midstream has announced plans for a deepwater crude oil export terminal more than 30 miles off the cost of Freeport, Texas. Speaking exclusively to Tank Storage Magazine president & CEO Jeff Ballard explains his ambitions for the future of the project.

While other operators are focusing on the flourishing shale export market, Howard Energy Partners is instead focusing its growth on hydrocarbon exports. Our interview with senior vice president for terminals & transportation Mark Helmke reveals the storage growth opportunities the company is exploring in key US Gulf Coast markets in response to the growth of hydrocarbon production and exports.

In addition to a piece looking at the latest regulatory updates and how they could affect tank terminal operators, this edition also has a special focus on fire protection, with articles on early detection systems as well as a new firefighting approach. Following the devastating fire at Intercontinental Terminals Company’s Deer Park facility in March, which destroyed 11 storage tanks and took almost four days to extinguish, the issue of fire protection and prevention in the storage sector has been brought sharply into focus.

This edition will be travelling far and wide this summer. As well as being the only magazine in delegate bags and on conference desks at the ILTA in Houston, it is also the official publication for the FETSA conference & exhibition in Tarragona, the Argus Mediterranean Storage & Logistics conference in Malta, as well as the new PGLC event in Marseille. The team will be at all these events so if you see us please come and say hi!

I hope you enjoy the read.

With best wishes, Jasmin

JUNE/JULY 2019 VOLUME 15 ISSUE NO.3

COMMENT

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07. N L E NGI NE E RE D F O R GE NE RAT I O NS . W W W. K A N ON

TERMINAL NEWS

All the latest terminal storage news from around the globe

12 Port of Frederikshavn & Bladt reach agreement for new storage terminal

21 Concho & Frontier Midstream create new storage & transportation system

13 Vopak expands storage capacity at Singapore terminal

EUROPE

17 Marathon Petroleum to acquire terminal from NOCO

09 Vopak reports increased financials as it commissions

extra capacity

Groundbreaking starts on Rubis Rotterdam storage expansion

10 HES Botlek to expand storage capacity for biofuels

Deepened Nieuwe Waterweg opened with first vessel

12 Port of Frederikshavn & Bladt reach agreement for new

storage terminal

Asia

04 Puma Energy delivers financials despite economic headwinds Sinopec starts operations at Henan gas storage terminal Petronas offers gassing up & cooling down at Pengerang LNG terminal

Eagle LNG receives final environmental impact statement for export terminal

19 President Trump enacts order for greater certainty in energy

infrastructure permitting process

Venture Global plans third Gulf Coast LNG export facility

20 Secure Energy acquires stake in Cushing oil storage terminal

Port Arthur LNG given federal authorisation for Texas facility

21 Concho & Frontier Midstream create new storage &

transportation system

13 Vopak expands storage capacity at Singapore terminal

Sempra Energy completes sale of natural gas storage assets

22 ExxonMobil to invest $2 billion in Baytown chemical expansion project

Chevron completes acquisition of Pasadena Refining System

Tallgrass Energy announces new Colorado pipeline project

Event preview Challenges and opportunities for Mediterranean storage operators

the americas

Africa & middle east

15 President Trump issues Keystone XL new Presidential Permit

25 Twelve Seas Investment acquires BPGIC for $1 billion

16 Repsol Downstream Mexico secures storage capacity in

three terminals

Shell & Texas Deepwater to refurbish Deer Park rail terminal

Saudi Aramco buys 17% stake in South Korea’s Hyundai Oilbank

Global 26 IEA confirms global oil markets adequately supplied

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

CONNECT WITH US 08

JUNE/JULY 2019 VOLUME 15 ISSUE NO.3

TERMINAL NEWS l EUROPE

TERMINAL NEWS EUROPE Vopak reports increased financials as it commissions extra capacity Vopak has reported increased financial results as it commissions additional capacity at PT2SB in Malaysia as well as at its greenfield terminal in Panama.

The global storage operator reported an EBITDA of €215 million compared to €190 million in the first quarter of 2018.

Its industrial terminal PT2SB in Malaysia commissioned additional capacity of 718,000 m3, bringing total capacity to 1.46 million m3. Its greenfield terminal Bahia Las Minas in Panama commissioned an initial capacity of 120,000 m3. The remaining capacity of 240,000 m3 will be commissioned before the end of 2019.

Looking ahead, the company’s expansion programme will add 3.2 million m3 in 2018 and 2019. The sale of Algeciras, Amsterdam and Hamburg, with a combined capacity of 2.3 million m3 is expected to be completed in the second half of 2019.

The company says it is well positioned to grow its global terminal portfolio in line with long-term market developments and targets one to three industrial terminal opportunities and one to three gas investment opportunities in 2019-2020.

Groundbreaking starts on Rubis Rotterdam storage expansion Rubis Terminal has started work on the second expansion phase at its Rotterdam storage facility.

The expansion comprises nine stainless steel heated tanks of 1,500 m3 each and six stainless steel tanks, each with a capacity of 3,000 m3 for chemicals.

A new berth will be built for barge access and an extra truck loading station will also be constructed. It is expected to be operational in the second quarter of 2020.

A spokesman told Tank Storage Magazine that the expansion will help meet demand for chemical tanks in the ARA, as there is an overall shortage. He says: ‘There are definitely plans to expand in the future, but they are not yet defined as they will be dependent on future customer demand.’

The first phase, which comprised more than 35,000 m3 of storage, was completed at the end of 2016.

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TERMINAL NEWS l EUROPE

HES Botlek to expand storage capacity for biofuels

Deepened Nieuwe Waterweg opened with first vessel INFRASTRUCTURE

HES Botlek Tank Terminal has announced plans to add six storage tanks for biofuels storage as part of considerable investment in the facility.

The first 15-metre-draught vessel arrivedMINING at & METALS Koole Tankstorage Botlek, officially opening the NUCLEAR, SECURITY & EN newly deepened Nieuwe Waterweg.

HES Botlek has contracted SJR Tank Construction following the company’s successful completion of seven fully-assembled tanks with a joint capacity of 70,000 m3.

The tanks each have a capacity of 3,400 m3 and the first four are currently being built in the conditioned production hall at the RDM site in Rotterdam and will be followed quickly by the final two tanks. The finished tanks will then be transported by water and installed in the foundations at the terminal in Botlek, Rotterdam.

These six tanks increase total storage capacity at the facility to 510,000 m3. As well as the partnership with SJR Tank Construction, civil engineering works were also contracted to De Vries en Verburg Bouw and are already in full flow.

Charles Smissaert, general manager of HES Botlek Tank Terminal, says: ‘The previous contract in 2017 was delivered entirely within budget and according to schedule. This meant that it was a logical step for us to award the contract for our terminal’s new expansion to SJR. The tanks will be used for the storage of biofuels and we are looking forward to the arrival of these tanks in August 2019.’

Robert Sloot, owner of SJR Group, adds: ‘We are able to complete the construction entirely off-site for this expansion as well.

This reduces inconvenience at the terminal as far as possible and enables us to construct and deliver high-quality tanks in a safe way.’

The completion of the project represents an important improvement OIL, GAS for & CHEMICALS the accessibility of the Botlek and the competitive position of the Port of Rotterdam. It allows new Panamax and Aframax ships to navigate the Nieuwe Waterweg without any restrictions.

John Kraakman, CEO of Koole Terminals, says: ‘The deepening enables us to serve our clients at our terminals better. It will result in further improvements in logistics as fewer ship movements will be needed. This also improves the logistics chain’s carbon footprint and lower logistics costs throughout the chain and will continue to improve the competitiveness of clients connected to us.’

Ronald Paul, COO at the Port of Rotterdam Authority, says: ‘The deepening enables Rotterdam to improve its competitive position and modernise the Botlek into an area in which the latest bulk carriers and chemical tankers feel just as at home as the largest container ships on Maasvlakte 2.’

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TERMINAL NEWS l EUROPE

Port of Frederikshavn & Bladt reach agreement for new storage terminal Bladt Industries and Port of Frederikshavn have reached an agreement for the construction of a new oil terminal in the new part of the port.

A

s previously reported, the new terminal will be operated by Stena Oil and is in direct response to the IMO 2020 sulphur fuel cap.

Under the multi-million DKK contract, Bladt will deliver everything from design and construction to commissioning the port’s new terminal, including installations, dewatering, concrete, tanks, pipeline, electricity, control and automation work.

It will comprise 11 storage tanks with a total capacity of 74,400 m3 for maritime products and wastewater. It will be Scandinavia’s largest plant.

In addition, loading facilities, pumping stations, and pipeline systems will be established for import and export of both marine diesel and heavy fuel, central heating systems, and staff facilities.

Mikkel Seedorff Sørensen, CEO at the Port of Frederiskhavn, says: ‘We have in cooperation with Stena Oil been in close negotiation with Bladt Industries and we are pleased to have reached an agreement with Bladt for the construction of the new terminal. We are pleased to sign with Bladt Industries, due to their many years of experience within the construction of terminals. We are looking forward to start the construction stage and not least the commissioning of the terminal by the end of 2020.’

Planning work has already started, and the terminal will be finished and ready for operation by the end of 2020. Jonas Persson, managing director of Stena Oil, says: ‘We are delighted that the Port of Frederikshavn has closed a turnkey construction deal with such a well reputed company as Bladt Industries. This new state-of-the-art bunker terminal is a key component in our preparation for the post IMO 2020 market.’

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JUNE/JULY 2019 VOLUME 15 ISSUE NO.3

TERMINAL NEWS l ASIA

TERMINAL NEWS ASIA

Vopak expands storage capacity at Singapore terminal Vopak is expanding storage capacity at its Sebarok terminal in Singapore with the addition of three new tanks.

T

he tanks, with a total capacity of 67,000 m3, are due to be commissioned by the end of 2019, according to Platts.

The expansion is ahead of anticipated higher demand for marine gasoil storage ahead of the IMO 2020 sulphur fuel cap.

A Vopak spokesman says: ‘The expansion aims to cater for the handling of marine gasoil, strengthening Singapore’s position as the bunker hub of choice with flexibility of handling multiple fuels.’

Current capacity at Vopak’s Sebarok terminal is 1.3 million m3.

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JUNE/JULY 2019 VOLUME 15 ISSUE NO.3

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TERMINAL NEWS l ASIA

Puma Energy delivers financials despite economic headwinds Puma Energy has delivered its 2018 financial results with record sales volumes despite margins being affected by macro-economic headwinds.

S

ales volume were at record levels at almost 25 million m3, up 9% on 2017 and gross revenue was strong at $18 billion for the year. However, margins were affected by macro-economic headwinds, which led to a reduction in gross profit and EBITDA. The company recorded throughput volumes of 15 million m3, a 9% decrease, due to lower volumes at terminals. It also divested non-core assets in Peru and Malaysia to free up cash flow. Selective investments were made with 18 additional retail stations, 13 new airports and two new terminals.

Puma Energy CEO Emma FitzGerald says: ‘2018 was a very tough year for Puma Energy, but I am pleased that the team managed to deliver full year results in line with the guidance given at the third quarter.

‘Looking ahead we remain very focused on delivering our plan, reducing the leverage in our balance sheet and maintaining strict cost and capital expenditure controls. Puma Energy has built a strong platform for sustainable growth in high potential countries and we are well advanced with our strategic plans to access this opportunity.’

Sinopec starts operations at Henan gas storage terminal Sinopec has started operations at its new Wen 23 underground gas storage facility in Puyang, northern Henan.

According to S&P Global Platts, the company has started sending natural gas imported from its Tianjin LNG terminal to the new facility through its Ordo-Anping-Cangzhou gas pipeline.

The facility comprises 10.4-Bcm of gas storage and is the largest in China’s central and eastern regions. It is set to boost Sinopec’s gas supply optionality and flexibility in northeast China, which is a key LNG consumption centre.

The facility was rebuilt from an exhausted gas field and put into operation in March 2019. It is also connected to Sinopec’s Yulin-Jinan and Puyang-Kaifeng gas pipelines in northern China.

Petronas offers gassing up & cooling down at Pengerang LNG terminal Petronas LNG has announced it now offers commercial gassing up and cooling down services at the LNG Regasification Terminal Pengerang in collaboration with Pengerang LNG. The recent completion of the services for Petronas vessel Puteri Zamrud Satu marks a significant milestone for gassing up and cooling down at the terminal. The operation signifies the first of many potential utilisations of gassing up and cooling down services at the terminal by other LNG operators and owners due to its strategic location along the Straits of Johor.

Gassing up and cooling down is a specialised service to displace the inert gas from the LNG vessel’s storage tanks and it is cooled down to cryogenic temperature.

Petronas LNG CEO Ezhar Yazid Jaafar says: ‘The gassing up and cooling down services at the terminal solidifies Petronas’ position as a progressive LNG solutions partner, offering flexible and diversified solutions to cater to the needs of our growing customers’ requirements.’

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JUNE/JULY 2019 VOLUME 15 ISSUE NO.3

TERMINAL NEWS l THE AMERICAS

TERMINAL NEWS THE AMERICAS

President Trump issues Keystone XL new Presidential Permit TransCanada’s Keystone XL pipeline has been granted a new Presidential Permit.

T

he permit supersedes the Presidential Permit issued in March 2017 and grants permission for TransCanada to construct, connect, operate and maintain pipeline facilities for the import of oil from Canada to the US. TransCanada says in a statement that this action clarifies the national importance of Keystone XL and aims to bring more than 10 years of environmental review to closure.

Russ Girling, TransCanada’s president and

CEO says: ‘President Trump has been clear that he wants to create jobs and advance US energy security and the Keystone XL pipeline does both of these things. We thank President Trump for his leadership and steadfast support to enable the advancement of this critical energy infrastructure project for North America.

‘The magnitude of the work on this project has been extensive. The Keystone XL pipeline has been studied more than any other pipeline in history and the environmental reviews are clear – the project can be built and operated in an environmentally sustainable and responsible way.’

The American Petroleum Institute says that this action reaffirms the national importance of this critical project to US consumers and energy security.

API’s president and CEO Mike Sommers says: ‘We applaud the administration for taking a no-nonsense approach to permitting this essential critical infrastructure project.

The Keystone XL Pipeline has passed every environmental review concluded it can be built safely, with no significant impact to the environment. ‘

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TERMINAL NEWS l THE AMERICAS

Repsol Downstream Mexico secures storage capacity in three terminals Repsol Downstream Mexico has secured more than 750,000 barrels of storage capacity in three different fuel storage terminals in Mexico.

The move is part of the company’s plans to grow its downstream business and develop its own downstream logistical network in the country.

Repsol reached an agreement with Hydrocarbon Storage Terminal, an affiliate CLH, to participate in the facility’s fuels terminal project in Mexico, securing 160,000 barrels of storage capacity.

Repsol also reached an agreement with Mexican company Tuxpan Port Terminal and with an affiliate of Monterra Energy to participate in Tuxpan Port’s fuels maritime terminal project in Veracruz, securing 450,000 barrels of storage capacity.

Additionally, Repsol has reached an agreement with Olstor Services, an affiliate of the Akron group, to participate in Olstor’s fuels terminal project in Jalisco, securing 150,000 barrels of storage capacity. These terminals are expected to be in operation by 2020.

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Shell & Texas Deepwater to refurbish Deer Park rail terminal Texas Deepwater Deer Park Terminal has entered a lease agreement with Shell Oil Products to retrofit and refurbish the Deer Park rail terminal to load refined products on the Houston Ship Channel.

U

pon completion of the project the terminal will have the capability to load up to 48 railcars per day, which is around 33,000 barrels of refined products per day. It is equipped with two operational tanks with 50,000 barrels of total storage capacity, which will service the railcar loading rack at the terminal with direct pipeline connectivity to Deer Park refinery and the Colex products terminal.

Shell Oil Products affiliate Shell Trading also entered into a related diesel supply agreement with an affiliate of USD Group.

The renovated terminal is expected to begin operations during the second quarter of 2019, as one of the most advantaged and efficient rail loading terminals on the Houston Ship Channel.

Once complete, Texas Deepwater Deer Park terminal will continue to lease and operate the Deer Park rail terminal facility under a long-term agreement with Shell Oil Products. While the initial focus will be on loading

diesel into railcars, there may be a potential to further expand the rail terminal by adding incremental storage capacity and rail loading capabilities to handle additional refined products.

Odeh Khoury, vice president, Shell products trading & supply Americas, says: ‘This is an exciting opportunity to work jointly with Texas Deepwater Deer Park terminal to operationalise a long-idled asset as we continue to see diesel demand growth in many markets. This project further increases our integration with Shell’s joint venture in the Deer Park refinery and enables us to further optimise our integrated value.’

Larry Ruple, Texas Deepwater Deer Park terminal executive vice president of business development, adds: ‘We are excited for the opportunity to work with Shell on this project, and for the value it creates by adding the much-needed takeaway capacity for refined products in the strategic Houston Ship Channel market.’

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TERMINAL NEWS l THE AMERICAS

Marathon Petroleum to acquire terminal from NOCO Marathon Petroleum will purchase a 900,000-barrel capacity light product and asphalt terminal and 33 retail stores in New York from NOCO Incorporated.

The terminal is well positioned to receive supply from the Midwest, Canada or the New York Harbour via multiple supply routes, including pipeline, truck, trail or waterborne vessels and will be able to deliver products to this market.

Chairman and CEO Gary R. Heminger says: ‘This acquisition supports MPC’s Midwest product placement strategy and builds upon prior investments, including Speedway’s acquisition of 78 Express Mart locations in western New York, to maximise our refinery utilisation.’

Speedway president Tony Kenney adds: ‘We are excited to continue our growth into western New York. The NOCO Express stores have been very

Eagle LNG receives final environmental impact statement for export terminal Eagle LNG partners has received the final environmental impact statement from the US Federal Energy Regulatory Commission to build the Jacksonville LNG export facility.

well managed and maintained and will complement our expanding presence in this region. We look forward to further bringing the Speedway brand to even more consumers in the Buffalo region.’

This is the final step in the environmental review process before the final federal authorisation decision deadline and anticipated FERC approval of the project.

The facility will initially consist of three liquefaction trains, which, at full build-out, will be capable of producing up to 1.65 million gallons of LNG per day, around one million tonnes per annum.

Sean Lalani, president of Eagle LNG, says: ‘Achieving this critical milestone is a significant step forward for Eagle’s Jacksonville LNG export facility.

‘The Jacksonville LNG export facility, with its prime Florida east coast location, will give us a unique and competitive advantage in helping provide some of the lowest-cost power generation for nearby Caribbean countries.’

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TERMINAL NEWS l EUROPE

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TERMINAL NEWS l THE AMERICAS

President Trump enacts order for greater certainty in energy infrastructure permitting process President Trump has enacted an executive order to ensure greater consistency and regulatory certainty in the permitting process for energy infrastructure projects.

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he move will help relieve the backlog of pipeline projects and move forward the country’s energy revolution. In the order President Trump says: ‘To enable the timely construction of the infrastructure needed to move our energy resources through domestic and international commerce, the Federal Government must promote efficient permitting processes and reduce regulatory uncertainties that currently make energy infrastructure projects expensive and that discourage new investment.’

Following the announcement, the US Environmental Protection Agency (EPA) says that it will be taking ‘affirmative steps to promote nationwide consistency and regulatory certainty under a core Clean Water Act programme’.

The EPA has said that it will engage with its state and tribal partners to identify ways in which it can modernise the 401-certification process under the Clean Water Act and accelerate infrastructure projects.

Section 401 provides states and authorised tribes with an opportunity to evaluate and determine whether the impacts of proposed federally licensed and permitted projects meet local water goals and these rules have not been updated in 50 years. These permits are often needed for pipeline construction projects crossing bodies of water. It also clarifies the guidance for presidential permits on cross-border pipelines.

The American Petroleum Institute (API) says that this move will enable the energy industry to provide clean and affordable fuels to communities and that the damage from restrictive energy policies is becoming more apparent.

API President and CEO Mike Sommers says: ‘Bureaucratic barriers have crippled an otherwise strong regulatory regime, preventing the construction of essential infrastructure and unnecessarily contributing to an energy disparity in America.’

Venture Global plans third Gulf Coast LNG export facility Venture Global plans to build a third LNG export facility on the Gulf Coast with associated pipeline infrastructure.

Delta LNG in Plaquemines Parish, Louisiana, will have a peak capacity to process 24 million metric tonnes of LNG. The company has filed a request with the Federal Energy Regulatory Commission to start permitting the project along with a 287-mile pipeline called Delta Express Pipeline, which will connect Perryville, Louisiana to the LNG facility.

If the process goes smoothly, the facility could be operational by November 2024. Venture Global will file formal plans with FERC in November 2019.

JUNE/JULY 2019 VOLUME 15 ISSUE NO.3

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TERMINAL NEWS l THE AMERICAS

Secure Energy acquires stake in Cushing oil storage terminal Secure Energy Services has acquired a 27% interest in a crude oil storage facility and a 51% interest in a parcel of undeveloped land in Cushing, Oklahoma for $10.4 million.

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he two tuck-in acquisitions provide the company with a strategic midstream footprint in one of the largest crude oil storage and trading hubs in North America.

The crude oil storage facility comprises four aboveground 175,000-barrel tanks.

The 80-acre parcel of undeveloped land is adjacent to the facility.

The storage terminal was built in 2015 and is strategically located on ten acres of land in South Cushing with long-term connection agreements in place. These provide connectivity to all major inbound and outbound pipelines in Cushing. The company says that having access to multiple Canadian crude streams and well-connected tankage will benefit its customers getting their product to market at the optimum price.

The company says: ‘Secure’s majority investment in the parcel of undeveloped land provides the corporation with significant optionality to develop additional midstream infrastructure in one of North America’s key trading hubs.

‘The corporation’s strategic partners have a long history in construction similar scale storage infrastructure in the Cushing market and have developed key relationships with major companies in the area. Secure intends to support any further investment with long-term contracts providing the corporation with certainty over future cash flows.

‘These transactions provide a measured and strategic entry into a new market for Secure, supporting the continued growth and development of the corporation’s midstream business.’

Port Arthur LNG given federal authorisation for Texas facility Sempra Energy’s Port Arthur LNG has received FERC authorisation to construct and operate its natural gas liquefaction-export facility in Jefferson County, Texas.

The Port Arthur LNG project is expected to include two liquefaction trains, up to three LNG storage tanks and associated facilities that will enable the export of 11 million tonnes per annum of LNG. The FERC order also approved the construction of the Texas and Louisiana connector pipeline projects that will provide natural gas transportation for the new liquefaction facilities.

Carlos Ruiz Sacristán, chairman and CEO of Sempra North American Infrastructure, says: ‘With today’s FERC order and the commercial momentum of the Port Arthur LNG project, we are one step closer to reaching a final investment decision and delivering low-cost, reliable and clean US natural gas to world markets.’

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TERMINAL NEWS l THE AMERICAS

Concho & Frontier Midstream create new storage & transportation system Concho Resources and Frontier Midstream Solutions have announced plans to create Beta Crude Connector, a new gathering and transportation system in the Northern Midland Basin in the US. Both companies will each own a 50% equity interest in BCC, with Frontier serving as operator. The new system will build and provide crude oil gathering, transportation and storage services to support continued oil production growth in the region.

It will consist of a 100-mile gathering system, 250,000 barrels of crude oil storage facilities as well as truck terminals. The pipeline system will have the initial capacity to deliver 150,000 barrels per day of crude oil to multiple delivery points, accessing local refineries and connecting to several downstream pipelines.

Construction will start following an open season.

BCC will file for FERC authority to operate as a common carrier pipeline and solicit interest from other producers and marketers for capacity on the new system.

Jack Harper, president of Concho, says: ‘Through the joint venture, we will leverage Frontier’s midstream expertise and enhance the value of our high-quality footprint in the Midland Basin with a reliable, cost-efficient gathering and transportation solution.’

Frontier’s CEO Dave Presley adds: ‘We are pleased that Beta Crude Connector will be the latest of our full-service midstream solutions and our second joint venture partnership with Concho as we demonstrate our commitment to quality partnerships and solutions for producers once again.’

Sempra Energy completes sale of natural gas storage assets Sempra Energy has completed the divestiture of its US renewables business and natural gas storage assets, which generates $2.5 billion in total cash proceeds.

The announcement comes with the completion of the sale of its remaining ownership interests in operating and development-stage wind assets to American Electric Power Company for $584 million in cash.

Sempra completed the sale of its non-utility US natural gas storage facility to an affiliate of ArcLight Capital Partners for $328 million in cash in February.

The company is also in the process of selling its equity interests in its South American businesses, including its 83.6% stake in Luz del Sue in Peru and 100% stake in Chilquinta Energía in Chile.

Joseph A. Householder, president and CEO of Sempra Energy, says: ‘We have a long and successful track record of actively managing our portfolio, including exiting businesses that are no long consistent with our strategy. The proceeds from the asset sales will be used to pay down debt and redeploy capital to support the strategic growth of Sempra Energy in North America.’

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TERMINAL NEWS l THE AMERICAS

ExxonMobil to invest $2 billion in Baytown chemical expansion project ExxonMobil has announced plans to invest $2 billion to expand its Baytown, Texas chemical plant, which will allow the company to enter the linear alpha olefins market.

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he expansion, which is expected to start up in 2022, includes a new Vistamaxx performance polymer unit, which produces products that offer higher levels of elasticity, softness and flexibility. The new unit will produce about 400,000 tonnes of Vistamaxx polymers a year.

In addition, ExxonMobil will be able to enter the linear alpha olefins market. The new unit will produce about 350,000 tonnes of linear alpha olefins a year.

The facility is the largest integrated petrochemical complex in the

US and is one of the most technologically advanced refining and petrochemical complexes in the world.

Darren w. Woods, ExxonMobil chairman and CEO, says: ‘Our Baytown chemical expansion will put us in a solid position to maximise the value of increased Permian Basin production and will deliver higher demand, higher value products produced at our Gulf Coast refining and chemical facilities.

‘Global demand for chemicals is expected to be greater than energy demand growth and GDP growth over the next 20 years.’

Chevron completes acquisition of Pasadena Refining System

Tallgrass Energy announces new Colorado pipeline project

Chevron USA has completed the acquisition of the Pasadena Refining System from Petrobras America for $350 million.

The Tallgrass Pony Express Pipeline has announced a new pipeline project to support crude oil production in northern Weld Country, Colorado.

The refining system is a 466-acre complex in Pasadena, Texas and adds a second refinery to Chevron USA’s Gulf Coast downstream business, which also includes a refinery in Pascagoula, Mississippi.

The refinery has the capacity to process 110,000 barrels per day of light crude, direct pipeline connections to increasing industry and equity crude oil production, connections to major product pipelines, and dock access to receive and ship crude oil and refined products.

It includes a tank terminal with storage capacity of 5.1 million barrels of crude oil and refined products, as well as 143 acres of additional land.

Mark Nelson, Chevron’s executive vice president for downstream and chemicals, says: ‘This acquisition builds on the strength of our existing Gulf Coast business, enabling us to supply more of our retail market in the region with Chevron-produced products, and positions us for connectivity to our strong upstream assets in the Permian Basin.’

The Hereford project will include approximately 30 miles of new 12-inch pipeline, as well as expanded capacity on the Pony Express system.

Sufficient interest arose during the Pony Express’ existing open season for expansion capacity from origin points in Colorado and Wyoming to destinations along the system to justify the Hereford project as a standalone project.

The new pipeline, the Hereford Lateral, will connect crude oil gathering facilities and/or terminal facilities near Hereford, Colorado, with existing Pony Express facilities located near the Pawnee origin facility in Weld County. Pony Express expects the Hereford Lateral to be in-service by July 2019, and the expansion capacity on the existing Pony Express system to be in-service by May 2020 – both ahead of the larger Pony Express system expansion.

A limited open system has been launched for the Hereford project. It will close on May 15.

EVENT PREVIEW

Challenges and opportunities for Mediterranean storage operators Storage operators in the Mediterranean are facing a range of development opportunities, thanks to IMO 2020 as well as challenges with declining gasoline demand.

Considerable activity is happening around the IMO 2020 regulation, which comes into effect on January 1, 2020, which presents not only challenges for the midstream sector, but also opportunities.

Ahead of the Argus Mediterranean Storage and Logistics conference in June, Marco Schiavetti, CEO and CCO at Saras Trading, says that the industry in the Mediterranean is facing challenges and opportunities. ‘obviously, with the new IMO 2020 regulation, a lot of things are going on in bunker fuels. But looking forward, the Mediterranean in particular continues to be oversupplied with gasoline – and that, coupled with declining demand, represents a growing challenge for the whole industry.’

Currently, terminal and logistics assets are preparing to accommodate new bunker fuel streams that will emerge as a result of the IMO 2020 regulation as well as providing services for the old fuel specification, which will continue to be used by ships that have scrubbers installed.

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Schiavetti adds: ‘Several refineries, including Saras, are already producing 0.5% compliant fuel, working closely with shipowners to test the new product and experimenting with new crude slates and production schemes in order to maximise profits.

‘This is being done in order to be fully ready for the fourth quarter of 2019, when demand for the new product will start to materialize and also hopefully lead to a higher margin in particular for middle distillates.’

Schiavetti will be speaking more about the opportunities in the Mediterranean for storage operators at the Argus Mediterranean Storage and Logistics conference in Valletta, Malta on June 6-7. The conference will also examine local and international markets as well as raising funds for storage and tank terminals.

TO FIND OUT MORE VISIT: https://www.argusmedia.com/en/conferences-events-listing/ mediterranean-storage-and-logistics

JUNE/JULY 2019 VOLUME 15 ISSUE NO.3

TERMINAL NEWS l XXXXXXX

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JUNE/JULY 2019 VOLUME 15 ISSUE NO.3

Storage tanks e-learning Engaging and accessible learning wherever you are Annual Storage Tanks Seminar 28 November 2019 ‘25 years of EEMUA 159’

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TERMINAL NEWS l XXXXXX XXXXXX

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JUNE/JULY 2019 VOLUME 15 ISSUE NO.3

TERMINAL NEWS l MIDDLE EAST & AFRICA

TERMINAL NEWS AFRICA & MIDDLE EAST

Saudi Aramco buys 17% stake in South Korea’s Hyundai Oilbank Saudi Aramco’s subsidiary Aramco Overseas will purchase a 17% stake in South Korea’s Hyundai Oilbank from Hyundai Heavy Industries Holdings.

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he investment, valued at $1.25 billion, will support Saudi Aramco’s crude oil placement strategy by providing a dedicated outlet for Arabian crude oil to South Korea.

Hyundai Oilbank is a private oil refining company and the Daesan Complex, where its major facilities are located, is a fully integrated refining plants with a processing capacity of 650,000 barrels per day.

In addition, the company and its five subsidiaries include oil refining, base oil, petrochemicals and a network of gas stations.

Abdulaziz Al-Judaimi, Saudi Aramco’s senior vice president of downstream, says: ‘Saudi Aramco continues to strengthen its position in the downstream sector. This acquisition demonstrates our investment in the highly complex refining sector in Asia, and continuous commitment to the region’s energy security and development.

‘The investment support Saudi Aramco’s broader downstream growth strategy, as well as providing long term crude oil options and offtakes as part of our trading business.’

Twelve Seas Investment acquires BPGIC for $1 billion Twelve Seas Investment Company has announced plans to acquire Brooge Petroleum and Gas Investment Company, which has a storage terminal in the Port of Fujairah.

Twelve Seas, a blank check company formed for the purpose of entering into a business combination, will engage in a merger involving a newly formed Cayman Islands holding company and the combined company will acquire 100% of the issued and outstanding shares of BPGIC. The transaction has been valued at around $1 billion.

As part of the transaction, BPGIC will become a whollyowned subsidiary of Twelve Seas, and the post-transaction business of the combined company will be that of BPGIC. One significant closing condition requires that Twelve Seas will have net cash proceeds at closing, including any proceeds of any new equity financings, in excess of $125 million.

All cash remaining in Twelve Seas at the closing of the transaction is expected to be used for BPGIC’s growth.

In a statement, Twelve Seas’ management says it believes that BPGIC’s award winning state-of-the art terminals offer the industry’s most advanced technologies, ensuring the highest level of service to clients. BPGIC is developing the terminals in phases and aims to have a total capacity of one million m3 following the scheduled completion of the second phase of construction by the end of quarter two or early quarter three in 2020.

BPGIC will continue to be led by its current management team.

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The transaction is expected to close at the end of the second quarter of 2019 or early third quarter of 2019.

Nicolaas Paardenkooper, CEO of BPGIC says: ‘We are excited to enter into this agreement with Twelve Seas as it provides us with the ability to enter the US capital markets and provide this unique opportunity to investors globally.

‘The US capital markets are the largest in the world and include sophisticated investors with large investments in similar public companies within our industry. We look forward to the opportunity to demonstrate our industry leading operations in the emerging global hub for oil at the Port of Fujairah in the UAE. This transaction enables BPGIC to continue its exciting growth and accelerate future opportunities.’

Bryant Edwards, COO and director of Twelve Seas, adds: ‘This transaction represents an exciting opportunity for foreign public investors, and specifically those that invest in Nasdaq company stocks, to invest directly into the dynamic and growing oil and gas infrastructure sector within the UAE. Today’s announcement comes less than two months after the investment by the global investment firms of KKR and Blackrock, who purchased cash flow streams derived from national pipelines in the UAE. Through BPGIC’s NASDAQ listing, investors can have a direct ownership interest in an exciting company with exposure to the same growing oil and gas infrastructure in the UAE.’

XL

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TERMINAL NEWS l GLOBAL

TERMINAL NEWS GLOBAL

IEA confirms global oil markets adequately supplied The International Energy Agency confirms that global oil markets are now adequately supplied and that global spare production capacity remains at comfortable levels.

A

s a result of OPEC’s high compliance rate with the agreed supply cuts in the OPEC+ group, global spare production capacity has risen to 3.3 mb/d, with 2.2 mb/d held by Saudi Arabia and around 1 mb/d by the UAE, Iraq and Kuwait.

Saudi Arabia’s output in March dropped to 9.8 mb/d after it cut far more than required under the supply cuts. This is more than 1 mb/d below the record high of 11.1 mb/d that Saud Arabia pumped last November.

Total oil supplies from the US are expected to grow by 1.6 mb/d this year. And as infrastructure bottlenecks in the US are easing, oil exports are now more able to keep pace with production trends.

anunci-tepsa-adaptacio-2-correce-reduit.pdf

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1

29/6/16

OECD oil inventories at the end of February 2019 were at 2,871 million barrels, which is above the five-year average.

The IEA says that with global economic growth increasingly fragile, consumers and producers should take steps to avoid higher oil prices that will prove painful to all.

13:22

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TERMINAL NEWS l XXXXXXX

Argus Mediterranean Storage and Logistics 6-7 June 2019 | Valletta, Malta Physical trading, new revenue streams and transformational technologies to drive your business forward

3 reasons to attend: 1. Get industry insights to transform your business

Official conference publication

2. Identify new opportunities in a thriving market 3. Connect with senior executives from Europe, north Africa and the Middle East

Petroleum illuminating the markets JUNE/JULY 2019 VOLUME 15 ISSUE NO.3

Find out more:

www.argusmedia.com/med-storage 27

INCIDENT REPORT

INCIDENT REPORT A summary of the recent explosions, fires and leaks in the tank storage industry 17/3/19

Crosby, Texas 2/4/19 A fire at the Crosby chemical plant killed one and injured two people. The fire erupted at 10.55am and took firefighters more than five hours to extinguish. A Harris County Fire Marshal’s Office spokeswoman said that it is believed the fire began when a transfer line carrying isobutelyne ignited.

The company activated its incident command center and dispatched its emergency response team to help first responders extinguish the fire. Company president and CEO John C. Foley said in a statement at the time: ‘Our hearts and prayers go out to the individuals involved, as well as our first responders, employees and our community.’ Investigations have been launched into the cause of the fire.

22/4/19

Albacora field, Campos Basin, Brazil Petrobras Oil spilled from a leak at one of Petrobras’ offshore oil pipelines in the Albacora field. Oil production at platform P-25 was halted shortly after the early morning discovery of the leak. The company sent ships to quickly remove the spill, which was estimated at 941 liters.

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JUNE/JULY 2019 VOLUME 15 ISSUE NO.3

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