Future - HMT

Future
refining & storage
Published by
in association with
hcbpublishing
DECEMBER 2012
Refining
● Turnaround for Europe
● Asia drives capacity growth
● Attracting new investors
Storage
● Safety failings identified
● Japan starts rebuilding
● China’s terminals quantified
A special supplement to
and

Tank Roofs
Future Refining & Storage
Optimize
capacity
and reduce
heel
Tank operators could be leaving money
on the table every day unintentionally in
storage tanks. This article by Jeff Eickhoff,
General Manager of Sales and Marketing
at HMT Inc, addresses strategies to reduce
dead stock and optimise working capacity
in floating roof storage tanks.
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Drain dry sumps can have significant impacts on dead stock / heel reduction
Dead stock, sometimes referred to as
the ‘heel’, is the minimum inventory
operators are required to maintain
under the floating roof when the roof
is at its lowest operating position. Dead stock,
financially speaking, behaves like non-moving
inventory, tying up working capital. This
inventory cannot be accessed or sold until the
tank comes out of service 10 or 20 years down
the road. Any measure that can be taken to
reduce this dead stock frees up cash to invest in
other areas of the business.
Unfortunately, many design engineers and
procurement managers are either not aware
of the financial impact of dead stock or their
budget structure does not provide a way to credit
them with this add-back to working capital;
therefore they do not take steps to change it. In
some cases, this dead stock is worth millions of
dollars and can be reclaimed with strategies that
in most cases pay for themselves on the first day
the tank is put back into service.
One misconception is that heel reduction
strategies aren’t important if the tank is leased.
However, tanks with less dead stock are more
attractive to lessees, making it easier to lease
tanks in a slower market or even allowing for a
higher lease rate in markets with good demand.
Dead stock reduction
One modification to reduce dead stock is the
installation of a raised bottom (ramped bottom,
or plateau bottom), which displaces much of the
volume of product that otherwise occupies the
space between the floor and the floating roof.
In some cases, the reclaimable heel can amount
to as much as 75%, depending on tank size and
profile of the raised bottom.
The raised bottom is a great solution for
larger tanks, where the ratio of raised area
relative to the perimeter is greater, resulting in
much higher return on investment. If the tank
already requires a bottom replacement, this
option is definitely worthy of review as the cost
becomes incremental to an already planned
maintenance project.
Other factors that should be taken into
account when considering a raised tank bottom
include the water table and site drainage.
Because this option often utilises an asphalt
layer to support the tank bottom, it is imperative
that water is not allowed to get under the
bottom. On sites with frequent standing water
near the tank base, this type of bottom is not
recommended.
While this solution comes at a premium
investment, in tanks larger than 100 feet in
diameter the financial benefit can easily exceed
the investment. Every situation and tank is
unique, so it is important to talk with a tank
consultant or tank contractor and complete a
breakeven and heel reduction analysis.

Future Refining & Storage
Future Refining & Storage
Tank Roofs
Another modification that can be employed
is a bottom fill system such as a cone-down
centre sump or a perimeter drain dry sump.
This solution, more commonly used in pipeline
facilities, reduces heel by lowering the inlet to
below the tank bottom, thereby eliminating one
of the largest interferences which limits floating
roof travel. This option can help tank owners
achieve significant heel reduction, especially
when used in combination with a suspended
roof.
The bottom fill/drain dry sump may require
additional internal component modifications
in order to obtain the best results. Piping,
supports, columns and other components
will need to be considered when lowering the
minimum liquid level of the tank and the lowest
level obtainable for the floating roof.
This solution can be more economical than
a raised bottom and can also increase working
capacity. However, it may not be ideal for
terminals with frequent freeze/thaw cycles.
Additional, smaller modifications include
relocating nozzles, installing manway plugs
and notching pontoon internal floating roofs
(IFRs). Be sure to consider buoyancy and mixer
operations when notching pontoon IFRs.
Optimising working capacity
Working capacity optimisation can have a big
impact on reducing capital requirements as
well as ongoing maintenance and operating
costs. There are several variables involved
when calculating the capacity of a floating
roof tank. To simplify, these variables are
categorised into three areas: the floating roof
travel constraints at the top of the tank; the
floating roof travel constraints at the bottom
of the tank; and the depth of the floating roof
and seal system.
There are many benefits to optimising
working capacity beyond the obvious
immediate financial impacts. These include
maintenance flexibility, operational efficiencies
and deferred capital costs.
Financially, improved working capacity can
mean increased income-generating capability
of the tank with every cycle.
In certain tank farm settings, extra capacity
means the ability to take a storage tank out of
service with less worry of storage constraints.
Operational efficiencies include the ability
to take larger deliveries at one time, reducing
per-barrel transactional costs. Furthermore,
each additional barrel of storage regained from
a storage tank defers the need for future storage
as the company grows. A new tank farm may
Converting an EFRT to an IFRT can offer several advantages including increased working capacity
even require one fewer storage tank to meet
the capacity requirements when all tanks are
operating at optimal working capacity.
Relocating nozzles and notching pontoons,
as addressed earlier, can help optimise working
capacity. Another fairly easy modification is to
use a secondary seal system that has a lower
profile, allowing higher travel of the floating
roof. In a 100-foot diameter tank, lowering the
secondary seal profile by 8 inches can increase
tank capacity by over 900 barrels per cycle. The
larger the tank, the larger the impact. Moreover,
most secondary seals can be installed while
the tank is in service, allowing capacity gains
without having to wait until the next scheduled
maintenance.
A larger modification with even greater
benefit to working capacity is the replacement
of a steel pontoon IFR with a lower-profile
aluminium IFR. A typical steel pontoon IFR
can range between 22 and 28 inches in rim
depth, whereas a lower profile aluminium IFR
can measure between 12 and 14 inches. The
aluminium IFR can be skin and pontoon or full
contact. However, in order to achieve optimal
working capacity, the use of a suspended IFR is
recommended.
For existing external floating roof tanks,
conversion to an IFR can have significant
impact on working capacity. A traditional
steel pontoon EFR with a typical secondary
seal can be 60 inches in overall system depth.
In comparison, a low-profile aluminium
IFR with a primary seal alone or with the
addition of a low-profile secondary seal can
range from 12 to 20 inches in system depth.
On a 100-foot diameter tank, this can be
the difference of 5,000 barrels in working
capacity per cycle.
Another consideration when striving to
increase working capacity, (discussed in the heel
reduction section), is the implementation of the
bottom fill or drain-dry sump. For every inch
lower in floating roof travel, an inch of working
capacity is gained.
Planning considerations
When making major modifications to a tank,
several key stakeholders should be involved.
Whereas traditional repair and maintenance
projects may involve three or four
stakeholders, major tank modifications for
increased capacity or heel reduction should
include operations/production and possibly
business development and the finance group.
Having preparatory meetings with tank
contractors can help estimate costs, perform
return on investment (ROI) analyses, and
assess all the options.
Advanced planning and timing is crucial
for any tank modifications. Pre-planning with
engineering, tank specialists and operations can
help identify opportunities and help to develop
an operational improvements ‘wish list’.
For major modifications, planning should
start at least a year in advance and must include
involvement and consensus of key stakeholders.
ROI analysis on larger projects, such as the
installation of a raised bottom, a drain dry
sump, or a conversion from EFRT to domed
IFRT will need to be completed prior to budget
season, in order to complete analyses and secure
approvals so proper spending can be allocated.
With a proactive approach and some
advanced planning, the tank maintenance
process can incorporate key modifications,
both large and small, to recapture money tank
operators might be leaving on the table. Discuss
these ideas with a tank consultant or tank
contractor today.
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