May 2017, Vol. 244, No. 5


Abundance of Natural Gas Drives Midstream Propane Terminals

By Mike Walters, Vice President of Safety and Training, Superior Energy Systems, Columbia Station, OH
Pipeline-supplied midstream propane terminals feature a battery of large storage containers, usually ranging from 30,000 to 90,000 gallons based on storage needs.

It’s clear the propane market in the United States has been strongly influenced by the abundance of natural gas. According to Propane Resources, a Kansas City-based propane industry consultancy, the U.S. was importing about 100,000 bpd of propane 10 years ago; today, it’s an exporter of 1.1 MMbpd of propane.

Why? A decade ago, 48% of propane in the U.S. was derived from natural gas; today, that number has jumped to 75%, due to the various ways of getting raw product out of the ground. That includes hydraulic fracturing, among other methods.

True, a very warm 2016-17 winter affected propane, as did slightly lower natural gas production. Nevertheless, there is an abundance of propane in the United States, and it has to be moved to demand points. That’s where the necessity of propane terminals in midstream operations becomes clear.

Propane terminals are large storage facilities supplied by either rail or a direct connection to a pipeline. They feature a battery of large storage containers, usually ranging from 30,000 to 90,000 gallons, based on storage needs.

In a rail-supplied terminal, propane is offloaded from railcars using compressors, stored and then loaded onto transport trucks with pumps for delivery further down the supply chain. A pipeline-supplied terminal is typically a much larger-scale facility, and often a pipeline that carries refined products may transport propane as well.

What does it take to design, engineer and construct a pipeline-supplied propane terminal? Although it may be easy to view it as merely a simply a storage, receiving and shipping facility, that’s too simplistic. Rather, it makes more sense to view such a terminal as an intricate system designed to maximize efficiency and safety – of the terminal itself, anyone that comes in contact with it, and the surrounding community.

Reliable Product Source

The goal of every midstream propane business is ensuring that its customers – and by extension, end users like homeowners, farms and businesses – have a reliable product source. When a midstream business recognizes a potential gap in supply, or a need for increased storage based on regional needs, the most logical solution is often constructing a greenfield propane terminal at a strategically crucial location.

Of course, in the case of a pipeline-supplied terminal, the actual connection to the pipeline is made by the pipeline owner, with placement of the midstream company’s terminal within a short distance. The midstream business will pay a fee to the pipeline owner to provide pumping and metering services to deliver propane to the pipeline terminal.

The key to building a safe, efficient pipeline-supplied propane terminal is capturing the midstream company’s business objectives at the project’s outset in a project proposal that serves as the controlling project document for the terminal supplier. A preliminary engineering submission, including basic location and equipment drawings and a plot plan or area map, add valuable proposal details.

After customer amendments to the project proposal and final approval, the proposal advances to a terminal supplier’s operations and engineering personnel to begin the design and engineering process. The first step is to order long-lead items, or those components that can take weeks or even months to acquire because they must be manufactured by third-party suppliers, like the storage containers.

Simultaneous to long-lead item ordering are development of the engineering drawings, which must be reviewed and approved for permitting purposes by federal, state, county and local authorities. That includes the authority having jurisdiction (AHJ), usually the local fire marshal. The two most important drawings are the site plot plan, including the pipeline connection, and a piping and instrumentation diagram (P&ID). The P&ID basically describes how the entire terminal will work, down to all containers, compressors, pump, piping and loading stations. Once approved by the customer, project equipment selection, detail engineering and permitting can move forward.

Civil engineering, including site grading, storm water retention plans (SWRP) and concrete drawings must be completed. Mechanical engineering, including 3D piping drawings, is crucial for completing the piping installation. Electrical drawings follow, including the PLCs, which essentially automate a pipeline-supplied terminal.

Maximizing Safety

An important part of the safety features built into a pipeline-supplied propane terminal is a fire safety analysis by the terminal supplier. The fire safety analysis, a requirement of the National Fire Protection Association NFPA 58 Liquefied Petroleum Gas Code, is a document that must be completed before the terminal is operational, but often the AHJ will require it during the permitting process.

The key objective of NFPA 58 is propane containment. Propane terminals must be designed to prevent unintentional release of product into the atmosphere. The fire safety analysis is developed to determine the relative safety of the proposed terminal, including any features beyond the specific requirements of NFPA 58.

The fire safety analysis ensures the AHJ that the terminal will be built to at least meet or likely exceed customer requirements, along with the appropriate federal, state and local codes and standards, which require that:

  • All container openings are properly equipped to meet the requirements that incorporate mechanical, thermal and remote means of operation, including activation and emergency shutdown as required by code.
  • Containers have the required liquid level devices, such as a float gauge, rotary gauge, slip tube gauge or a combination to prevent overfilling. Containers can also be equipped with a guided radar liquid level system to transmit remote liquid level indication and tank level control to the terminal’s PLCs.
  • A vapor pressure and temperature gauge.
  • Properly sized tank relief valves to protect the tank from overpressure.

The terminal’s piping system includes multiple means of protection as specified by various codes, such as hydrostatic relief valves installed anywhere propane has the potential to be isolated between two positive shutoff valves and a truck-loading metering skid to protect the tank side piping in the event of an accidental vehicle pull-away.

Additionally, the terminal’s piping system is protected by product-transfer safeguards like backflow check valves, positive shutoff valves and unloading stanchions fitted with breakaway devices, to separate at a predictable point in the event of an accidental transport truck pull-away.

Another key codes and standards requirement is an emergency shutdown system that will close the necessary valves in order to contain the product in an emergency situation. Operators are located at strategically important places within the terminal, including the driver kiosk, the truck-loading metering skid, and the truck-unloading stanchion.

In addition, the AHJ may require additional safety measures. One example is a gas and flame detection system (GFD), installed in conjunction with PLCs to monitor the system using a variety of ultraviolet and infrared flame detectors and path watch combustible gas detectors. A GFD system provides redundant safety protection to shut down the entire terminal should a release occur in the areas where propane is moving through the piping system.

Building Process

The time it takes to build a propane terminal varies based on several factors, including interfacing with the pipeline owner for the physical connection and metering, of course, but especially the permitting process. In some states, it’s a quick process; in others, it could take six months or more to acquire all relevant permits – building, electrical, mechanical, plumbing, zoning and occasionally environmental. Other factors include weather conditions that are unsuitable for construction activities.

In most cases, the terminal supplier coordinates all subcontractors, such as electrical, concrete, mechanical, grading, painting and fencing, along with a crane contractor for lifting and setting of the storage containers and other equipment. A terminal supplier will typically have a staff superintendent on site along with personnel to perform the work and/or act as a liaison with various subcontractors.

A typical project might be completed in four to 12 months from preliminary design and permitting to system completion. The terminal supplier will begin the commissioning process about two weeks before the project is completed, which includes testing every part of the system. That includes ensuring that the PLCs – the core of the terminal’s system – are programmed and operational.

From there, the terminal contractor coordinates all inspection approvals to ensure compliance with all issued permits, including walk-throughs by the building, electrical and mechanical inspectors, along with the pipeline owner.

Supply Chain Gaps

Whether it’s pipeline- or rail-supplied, a new propane terminal is ultimately designed to meet a strategic market need for a midstream company. It fills gaps in the supply chain and gets product where it needs to be – to homeowners, businesses and farms. But it’s important to note that based on NFPA 58 and AHJ requirements, propane terminals are built to be exceedingly safe for anyone coming in contact with it, like transport truck drivers, and the surrounding community.

Author: Mike Walters is vice president of safety and training for Superior Energy Systems, based in Columbia Station, OH. For over 40 years, the company has supplied propane infrastructure and services.


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