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Right sizing for Valdez Marine Terminal Tank work could start early next year, with tank and power/vapor and firewater work to be completed by 2007; metering and changes to ballast water treatment would be done later Kristen Nelson Petroleum News Editor-in-Chief
Owners of the trans-Alaska pipeline system have authorized Alyeska Pipeline Service Co. to proceed with preliminary engineering for reconfiguration of the Valdez Marine Terminal, a step which will provide firmer project schedules and costs, necessary before the owners give final approval for the work.
Goals of the reconfiguration are to downsize the terminal to better fit current and expected throughputs of crude oil — about half of what the terminal handled at its peak in the 1980s — reducing transportation costs for Alaska North Slope crude oil, and making it more competitive with crude worldwide.
In the preliminary engineering phase Alyeska is looking at costs and scheduling for two types of projects identified in the conceptual engineering phase, interrelated changes and standalone projects at the terminal.
The related projects include: a reduction in the amount of tankage in service and addition of internal floating lids to the remaining tanks; handling tanker vapors with vapor combustors; and replacing the existing electric generating system with either new diesel-fired generators or electricity purchased from Copper Valley with backup diesel power generation at the terminal (see part 1 of this story in the May 30 issue of Petroleum News). More work before sanctioning In a May 24 interview, Alyeska managers told Petroleum News that work at the terminal hasn’t been authorized yet.
John Barrett, Alyeska’s strategic reconfiguration program manager, said the conceptual engineering work at the terminal generated “a set of ideas that hold a lot of promise, but they have not been validated yet.
“Preliminary engineering goes to a higher level of detail, where you more accurately determine the cost and the savings to determine if the project really is viable, and if it is, then it’s sanctioned to go forward and that’s when larger amounts of money are spent.”
Both costs and scheduling will be looked at in much greater detail over the course of this year.
“We have to get to a point where we see that this has an economic return, and we’re not there yet,” said Chuck Strub, Alyeska special projects manager in charge of the terminal changes.
Rod Hanson, Alyeska’s Valdez Marine Terminal manager, said the changes in the tanks, vapor control and power generation are the biggest piece of work being looked at in the preliminary engineering: “Those all have to happen together or it doesn’t make sense, so that all has to stand on its own from a business case.”
Detailing the costs and schedule for the tank and power/vapor work is the first step in the preliminary engineering, said Strub. Preliminary engineering for the tank, vapor control and power generation “requires us to go through and do the tank work, the internal floating roofs,” he said, along with the vapor combustors for the tanker vapors, and providing power resources for the facilities.
“And to do that we have to understand all of the cost elements involved in this and then how we’ll pay back for the investment as reduced operations and maintenance costs over time,” Strub said. Goal is completion around 2007 The goal, said Strub — subject to approval of the project at the end of this year — is to complete the tanks and power/vapor portions of the project in 2007. (See part 1 of story for interrelationship of tanks and power/vapor work.)
The retrofit for the internal floating roofs will take the longest, he said. “We calculate we can only do about five tanks a year because of the amount of effort required inside each of the tanks” and because only that many tanks could be taken out of service at one time.
That time estimate came out of the conceptual study, he said, and “now we have to go back in and first of all validate whether we can achieve that schedule and how much it will cost.”
That work will be the major focus through the end of this year: developing the cost and schedule so economic models can be run to determine if the changes would be economic. That analysis would be presented to the owners at the end of this year or early in the first quarter of 2005.
Installing the internal floating lids will take at least a couple of years of construction work, Hanson said.
Strub said the work inside the tanks is “the critical path for this project: It’s the single activity that has the longest duration,” and so the plan is to start that work first.
In fact, Strub said, they’ll request funding in August for the first two tanks, for work to begin in January. That allows lead time for materials and contractors, so that — subject to overall project approval at the first of the year — work can begin on the first two tanks, which will be emptied for regularly scheduled maintenance. On that schedule, major work would be completed in 2007. Work done inside the tank Installation of a floating lid requires that a hole be cut in the side of the tank, Strub said. First the tanks are emptied and cleaned, and any needed internal repairs are done to the tank.
There are columns inside the tank, supporting the external roof. The internal floating roof is constructed inside the tank, around the columns and sits on landing legs.
“It floats on the surface of the oil,” Hanson said, but has legs so it “can only come down to within about six or seven feet” of the floor of the tank because there is equipment in the bottom of the tank.
“And then that allows you later to drain a tank and let it sit on its legs and then you can get access in to do inspection and repair work, to do maintenance work,” he said. Firewater system would be changed to freshwater Preliminary engineering will also look at the largest of the standalone projects: changing the terminal’s firewater system, currently a pump-driven seawater system, to a freshwater gravity system.
The seawater system accounts for “a huge amount of cost” at the terminal, Hanson said, more than $30 million in just the last five or six years, “a lot of it driven by the corrosiveness of saltwater.” The system uses a number of main pumps, plus smaller pumps, to move seawater around the terminal in a buried loop.
There is a rock quarry above the west tank farm, from terminal construction days, and Alyeska has done some geo-technical analysis and some engineering work and is proposing to create a freshwater retention basin in the old quarry: “a gravity freshwater supply system for our firewater system … sized for three times the amount of firewater we would need,” Hanson said.
The first advantage, he said, is that it’s no longer saltwater. And because it’s gravity driven you don’t have to rely on pumps, so it’s “even more reliable than the current system. And it pulls a lot of maintenance costs out of the system.”
The bottom of the reservoir in the proposed firewater retention pond is at an elevation of 700 feet, Strub said, compared to an elevation of 421 feet at the bottom of the highest tank in the east tank farm.
Hanson said they’ve been asked if the gravity firewater system would provide enough pressure. Because of the elevation change there would be “so much pressure that we’re going to have to put pressure-reducing components in to avoid over pressuring the lower terminal,” he said. While this project is separate from the tank and power/vapor changes, it would likely be implemented around the same time, Hanson said.
This project is for onshore firewater only. There are saltwater firewater pumps on the berths in use, berth 4 and berth 5, the only two berths in use at the terminal, “and we haven’t yet decided what the right answer is out there,” he said. Ballast water changes have own justifications Alyeska is also looking at changes to the ballast water system, Hanson said, but that proposal isn’t as far along as the tank, power/vapor and firewater changes, and would be done later.
The ballast water plant “is currently running at about 33 percent capacity,” he said. The volume of ballast water processed will continue to decline, Hanson said, and in the next five or six years, the current volume of water processed will be cut in half.
Older tankers carry ballast water in their crude oil tanks, so their ballast water “has remnants of oil from the last cargo load,” he said. When the tankers arrive at the terminal, they pump the ballast water through buried piping to three ballast water treatment tanks — the first of three steps in ballast water treatment. The oily water sits in the tanks, the oil rises to the top and is skimmed off and reinjected into the crude oil system.
“The water is pulled off the bottom and runs through the second state of treatment … dissolved air flotation,” Hanson said. Air is injected into the water column, creating bubbles which are mixed with a polymer and rise to the surface, taking more oil out of the water and bringing it to the surface where it can be skimmed off. The water is then routed to biological treatment tanks where microbes eat the remaining components of oil in the water.
The entire process takes a couple of days, and at the end the water is discharged into the port. New tankers have segregated ballast tanks The new double hulled tankers, however, have segregated ballast tanks, so the water doesn’t come into contact with crude oil, and doesn’t require treatment, and as more come into service, the amount of ballast water needing treatment will continue to decline.
At some point, Hanson said, there is just a little ballast water which is coming in batches, and “this system is really not designed to operate that way. It’s designed to operate more in a steady-state mode.”
Of particular concern, he said, is the final biological stage, which may not be a viable process for batches.
The conceptual thinking is that the first stage, gravity separation, would remain, although probably with two tanks rather than three.
The second stage — dissolved air floatation — could be replaced with induced gas floatation, which works on about the same principle, forcing gas through the water instead of air, again with a polymer that brings oil to the surface.
The induced gas floatation system is enclosed in a vessel and any emissions are contained within the system.
Hanson said it is a simpler process technologically, less costly to operate and is more environmentally friendly.
“We’re actually doing some pilot work right now to prove out whether that technology is going to work for us or not,” he said.
Alyeska is looking at replacing the third stage, the biological process, with carbon absorption, but Hanson said that change is far enough out in the future that the company is waiting to see what new technologies might be developed over the next several years. Metering changes could happen by 2008 Another standalone project is changing crude oil metering. Oil is metered when it enters the terminal at the east metering facility. Metering performs an important leak detection function, Hanson said, because a variation between oil received between metering stations indicates a possible leak.
Another metering facility contains separate meters for oil going to berth 4 and berth 5. Keeping track of all of the oil is an important part of the terminal’s business, Hanson said: “It’s kind of the cash register side of the business,” so maintaining the metering system is “a pretty critical part of what we do.”
The current meter systems are in-line turbine meters, with the turbines spun by the oil as it passes, and “that spinning turbine basically tells you … for each spin, how much oil goes by.” It’s very high maintenance, he said.
There is a new technology that uses “ultrasound, not moving parts, to measure the flow of oil,” and Hanson said that while this technology is still a few years down the road, it could be in use at the terminal by 2008. The ultrasonic meters would be placed directly on the crude lines. The metering facility to the berths wouldn’t be needed, and operations and maintenance work associated with metering would no longer be needed.
“The same thing with the incoming meter system here that we use for leak detection — ultrasonics is a potential replacement for that,” he said. Company will rethink how it operates All of the proposed changes, Hanson said, give the company “an opportunity to rethink how we operate, how we maintain, how we staff the organization for this.” The terminal has operations, maintenance and support teams.
Operations are divided into four major areas: power/vapor; marine; ballast water; oil movements and storage — metering, tank farms, etc. “In the future, with what we’re describing here, we’ll probably just have a single operations team that will have a different set of responsibilities from what we currently have laid out.”
“It will still likely be a 24-hour a day, seven-day-a-week operation,” Hanson said. Maintenance now works just during the day, and there will continue to be a maintenance team, “but as you can imagine the amount of maintenance that we’re having to do in the future is going to be a lot less than what we do now.”
And Alyeska is just starting to look at the ship escort response vessels system to see what change could be possible for changing that cost structure. Headcount will be affected There are now 300-plus Alyeska employees at the terminal and the ship escort response vessels system and an equal number of contractor employees, Hanson said, although the contractor count is a year around average, and there are more contractors in the summer when major projects and maintenance are done.
Hanson said that while it is too early yet to know the impact on employees, “we’ve committed to letting our employees know as soon as we have something to share, and then sharing it outside the company as well.” He said Alyeska “made a decision early on that we will provide our employees as much opportunity to plan for their future as we can, and so as information is available we’re sharing that with employees.”
And, he said, the company is also trying to help employees understand that “there’s a lot that’s changing, but there’s a lot that stays the same. In the end, we’re still in the same business, we’re still doing the same thing, we’re still having the same level of high standards around safety and environmental performance that we have now.”
There will be opportunity, he said, and “some kind of neat technology to do our jobs with in the future. …
“But it’s going to be a smaller organization.” Organizational changes part of cost Included in the commercial analysis are the costs of organizational transition, Strub said: You have “to run what you’ve got, build what’s new, start up what’s new and then, finally, ramp down what’s old and continue to operate on what’s new, and that all becomes part of the commercial cost of your investment.”
“We’ve got basically three organizations in place, or being put in place,” said Hanson: “Chuck (Strub) is responsible for the project management of these changes; I’m responsible for the day-to-day operations of the current facility and helping design the organization to maintain and operate the future Valdez terminal; there’s another team that we’re forming up, called a transition team, and this team is going to help us get from here to there.”
Hanson said planning includes: training employees for the new systems; determining how to staff the organization; outlining benefits for those leaving the organizations; and making sure that documents in the future match the new equipment and that the old documents are retired. “It’s a large piece of work that has to be done right,” he said, and so one team will focus specifically on the transition.
“We put as much effort into planning the transition as we do planning the project — it’s that big,” said Barrett. Spill preparedness Hanson said that Alyeska has been asked if there will be enough employees left to respond in the event of an emergency.
The company is going to review the issue of the resources needed for spill response, so that it knows during the preliminary engineering phase, “how many people we need for emergency response.”
As for overall changes, “at a minimum we’re going to maintain safety and systems integrity, but in many respects I think we’re going to improve.” For example, he said, “power/vapor is one of our most complex facilities in the system” and the only facility Alyeska has governed by process safety management standards because it handles vapors, generates power and uses steam-fired turbines and boilers. “And that all presents risk and that basically goes away — it becomes a much simpler operation.” Operations control central also relocating Although it isn’t a part of the reconfiguration, Alyeska’s operations control center will be relocating from Valdez to Anchorage in 2006, in the midst of the proposed reconfiguration changes. That move, announced in February, allows control center personnel to work more closely with the oil movements and scheduling departments, which are in Anchorage, Alyeska said in a February statement.
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