NOVEMBER 2013

WHOLESALE MARKETS TSA CONFERENCE INFRASTRUCTURE INVESTMENT Sponsors of BTCC Rob Austin Racing Team A company driven for 2013 Season by proven results FAST's fuel additives are concentrated, technically-driven products designed to match or improve upon the best in class for any application.

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Contact your fuel supplier or machinery specialist Fuel Additive Science Technologies Ltd. Like us on Unit 29 Atcham Business Park, Shrewsbury, Shropshire SY4 4UG • Office: +44 (0) 1743 761415• Fax: +44 (0) 1743 761075 Facebook Block A, Unit 7, Airside Enterprise Centre, Swords, Co. Dublin • Office: +353 (0) 1 808 4805 • Fax: +353 (0) 1 808 4789 Follow us For more information please e-mail [email protected] or visit www.fastexocet.co.uk on Twitter Taking extra care As Road Safety Week approaches great opportunity to support the fantastic The monthly magazine for the fuel distribution, storage and (18-24 November) it is a timely reminder and tireless work carried out by the marketing industry in the UK and Ireland. for us all to tune into road safety, and to charity, it’s always good to demonstrate perhaps rethink some driving habits. your commitment to road safety. Some of us will no doubt have Dr Will Murray, research director used a phone, eaten, or even put make of Interactive Driving Systems is 4-7 NEWS up on at the wheel whilst we should a big supporter. “We work with Featuring a year in the wholesale markets be concentrating on the road ahead. many organisations which use Road Although recent legislation should have Safety Week as a focus for safety 8-9 IN CONVERSATION discouraged us from doing these things, communications and to engage their Making a step change in HSE procedures at NWF Fuels in the last couple of weeks, I have seen employees. November is perfect timing a fair few people still engaging in these for a winter driving campaign and to 10-13 IN CONVERSATION activities at the wheel. highlight issues such as drink driving in Simon Storage - investing in our infrastructure If a fi ne is not enough to deter the run up to Christmas. For Brake it’s 14-15 BUSINESS FOCUS drivers, surely the very tangible risk of a also important in terms of community Biodiesel with RGM Fuels crash should be…..every day fi ve people engagement and fundraising.” are killed and 63 seriously injured on By being better tuned into the road 17-19 TSA CONFERENCE 2013 our roads, with a quarter of all serious ahead, it is also possible to drive more casualties involving drivers at work. effi ciently and to save fuel. So as the 20 PORTLAND MARKET REPORT Road Safety Week is the UK’s biggest nights draw in please take extra care road safety event, coordinated annually and encourage all your employees to do 21 LOGISTICS by Brake. If your company hasn’t already likewise. Brit European signed up – please do so. Not only is it a Liz Boardman 23 IRISH NEWS 25 INSIDE OUT Shared deliveries...a consideration for distributors? Simon Storage – investing in our infrastructure. See page 10. 26 THE PRICING PAGE

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Fuel Oil News | November 2013 3 November 2013 Volume 36 No 11 ISSN 1757-1057 News

A YEAR IN THE WHOLESALE MARKETS

Investment at Greenergy in 2012 Greenergy acquired the Petroplus refinery site on Teesside - now known as Greenergy North Tees he last year has been a busy one for Greenergy, with major infrastructure projects at former Petroplus facilities on the Thames Tand at Teesside, combining with strong sales growth. The company’s 2012/13 sales amounted to 13.5 billion litres, up 24% in volume from the previous year. Chief executive, Andrew Owens, commented: “We have won new business following the administration of Petroplus and also by expanding our supply to independent petrol retailers. We now supply independent dealer owned petrol stations under a variety of different forecourt brands, including Esso and the Nisa convenience brand.” Greenergy acquired the former Petroplus refinery on Teesside (now named Greenergy North Tees) in July 2012 and began supplying from the site soon after. North Tees has become the company’s second supply location in the area, complementing its petrol blending facilities at the lowest cost suppliers globally and offer the most competitive pricing for neighbouring Vopak terminal. customers. When it opens at the end of the year, it will complement the Andrew explained: “We can now supply customers from both company’s other supply location at West Thurrock, providing the same Greenergy North Tees and from the Vopak terminal at Seal Sands so if ever unparalleled supply resilience for customers. there is an interruption of supply at one of these sites, we can seamlessly Greenergy has also been investing significantly in back-office systems switch customers to the other. This allows us to offer our customers to remove the potential for human error and deliver an error-free service unparalleled resilience of supply.” for customers. More than 90% of the company’s invoices are now The North Tees investment however, is not just about resilience. It is automatically generated and as a result it achieves accuracy levels that are also about building the most competitive supply platform possible. “By unique in the industry. Last year, 99.7% of its invoices were right first time. modernising former refinery infrastructure, we want to create maximum “We try to be the lowest cost fuel supplier with the highest levels of flexibility in our product origination, to keep product costs as low as customer service. That means cutting costs from the supply chain, but not possible,” added Andrew. cutting corners,” concluded Owens. The same thinking has driven Greenergy’s investment in Thames As Britain’s only national fuel supplier, Greenergy now holds its own Oilport – a joint venture with Vopak and Shell. Like Greenergy North Tees, physical oil in eight terminals across the country, including Clydebank, Thames Oilport provides the company with significant storage capacity Teesside, Thames, Cardiff and Plymouth, and supplies customers from a and access to deep-water jetties, so it can buy in large quantities from the further 14 locations. www.greenergy.com

Continued growth at Prax

rax Petroleum has enjoyed another year from zero, the results have been impressive. Our “There have been plenty of challenges along of continued growth and geographic sales team has been offering the same level the way in the form of an increased burden of Pexpansion, to cover a greater part of of fast efficient service, accurate invoicing and compliance with the government’s RTFO scheme the UK. competitive pricing to our new customers in the and the inclusion of gas oil into this category. The wholesale market on the Thames north of England, and we are now importing The Downstream Fuel Association, of which continues to be a hotbed of activity and remains regular cargoes into Immingham. As a result of Prax is a member, has been campaigning and a fiercely competitive area to do business, this encouraging early success we plan to expand lobbying on behalf of its members to ensure that despite the absence of the Petroplus Coryton our product offering to include kerosene and the independent importers’ voice is heard in the refinery. “With our emphasis on customer gasoline in to the north east of England. corridors of power! satisfaction, efficient processes and sharply “Having two strategically placed terminals “Our plans are to expand into other areas of competitive prices we are very happy to be able has allowed us to grow our contracted and spot the UK and increase our product range, applying to report significant growth from our Dagenham volumes. Prax is now a significant supplier of the same basic principles that have proved so terminal, “says the company’s sales and fuels to the distributer sector. By importing larger successful in our existing business areas. Our marketing director, Neil Robertson. cargoes of fuel and having a streamlined and customers want a reliable supplier with efficient “In September last year we took our first efficient organisational structure we can offer processes able to offer competitive prices with tentative step further afield, taking storage at the customers very competitive prices in to the heart products meeting quality standards delivered Simon Storage’s facility in Immingham. Starting of the UK. safely and on time.” wwwpraxpetroleum.com

4 Fuel Oil News | November 2013 www.vopak.co.uk

Mabanaft – adapting to the prevailing market

t is still an extremely challenging time for environment. Managing director, Raphael encompasses the import and wholesale of the wholesale industry. The international oil Hüttmann, said: “The environment remains petroleum products and the company is active in Imarket continues to remain backwardated, tough – there’s nothing we can do about that service stations, marine bunkering services, retail as it has for the past 18 months. For wholesalers, – but there’s a lot we can do to cope with it. heating oil, lubricants, biofuels and biomass. See holding stock in the current climate presents Mabanaft’s fl exibility is part of its strength as an also page 22. fi nancial risks, and as a result there is a great organisation.” www.mbholding.com deal of volatility and uncertainty in the market. The company is now looking at As part of a larger group, Marquard & Bahls, opportunities to grow its position, including Mabanaft is able to balance the uncertainty in negotiating investment into terminal the market and create a proposition that is both infrastructure to offer customers additised attractive in terms of price and secure in terms of product where it was previously not available. physical availability. Throughout, the company It is also looking to invest in new IT systems has maintained suffi cient levels of inventory for to provide electronic invoicing and online onward distribution and continues to assure administration, which will both increase customers with its reliability and continuity of effi ciencies within the organisation and deliver supply. additional benefi ts to customers. In the UK market there has been a period “Strong relationships are fundamental of unprecedented change caused by the in such times,” said Stephen Rhodes, the consolidation of large segments of the customer company’s marketing manager. “We have base, oil refi ners increasing their market share always been committed to understanding what and the effects of a global economic recession. our customers want. We have just completed The underlying trend in the UK is one of a new feedback survey to ensure that we continued reduction in consumer demand, continue to recognise our customer’s needs and coupled with very intense competition. expectations and can pinpoint any areas for In response to these challenging conditions improvement.” Mabanaft has implemented a number of Mabanaft is the trading division of changes, which has focused on transitioning Marquard & Bahls, an independent and privately operations to more closely refl ect the market owned petroleum company. The business Have questions about Tank Truck Equipment?

“Prax is now a signifi cant supplier of fuels to the distributor sector,” explains sales and marketing director, Neil Margate, UK Robertson + 44 (0)1843 221521 [email protected] www.emcowheaton.com News

PHILLIPS 66 – LONG TERM COMMITMENT

n early October, around 100 Phillips 66 customers – including company’s plans for the future. authorised distributors, supermarkets and resellers – gathered One of the main messages coming out of the event was that Phillips Itogether for the company’s 2013 conference, held this year at 66 is committed to the market, as Pete George, managing director of Gleneagles, Scotland. The conference provided a platform to discuss UK & Ireland marketing, explains: “We recognise that we operate in an the latest challenges affecting the UK’s fuel market and to highlight the increasingly competitive market, but we have big ambitions and we wanted to use Gleneagles as an opportunity to reassure our wholesale customers that we are here to stay. “There are only three oil company-owned refi neries left in the UK, including our own Humber Refi nery – one of the most sophisticated in Europe. Despite the fact that there’s a lot of uncertainty around the future of refi ning, we can comfortably say that we’re committed to a long-term future of refi ning at our Humber Refi nery.” Andy Viens, president of global marketing for Phillips 66, announced plans which include large-scale investment ($2bn) in cleaner fuels, an increase in inland fuel supply volumes across all regions of the UK and a commitment to the Jet retail brand. He also spoke about the signifi cant changes the global fuel industry has seen over the last decade and the pressure on European refi ning as a result of the US becoming a net exporter of gasoline. Andy concluded by reiterating that although the energy landscape is changing rapidly, Phillips 66 is excited about the future and has the relationships, expertise and portfolio of assets to be a vital

Meeting at Gleneagles last month Phillips 66 reassured customers, including player in the current and future marketplace. the Jet authorised distributors pictured here, that it was ‘here to stay’

Consols hits the small screen

Consols Oils has recently uploaded a video to YouTube. The two and a half minute video is beautifully shot and highlights the different markets – marine, agricultural, domestic and industrial, covered by Consols. Managing director, Kevin Bennetts is extremely pleased with the end result: “It’s down to the talent of the two youngsters that fi lmed it – they’ve caught both the landscape and our business beautifully. We wanted to move on and try something new and for us, it reinforces the message that we are always trying to get across – that service is key! “We’ve recently changed our company strap line to Fuelling Cornwall – it’s simple, precise and does what it says on the tin. We eat and sleep the job and are extremely proud of what we have achieved.” Although Consols has not fully publicised the video yet, it has already had nearly 300 hits. www.youtube.com/watch?v=Tx3FLI7w0AQ

6 Fuel Oil News | November 2013 Back in the hot seat

One of Oilfast’s new tankers ow ‘working harder than they have ever done’ are Jonathan Turner, Liz Slater, Campbell Brogan and Alan Tait. Oilfast, the Nquartet’s new distribution business in Scotland, opened for business in September at Crieff with a fl eet of eight tankers. Since Bayford Oil was sold to DCC in 2009, Jonathan and Liz have remained active in the industry whilst Alan and Campbell, formerly of Brogan Fuels, have been out of the industry for four years. “After only a few weeks back in the hot seat, we feel that we’ve never been away from the place,” said Alan. “It’s been great meeting up with old contacts.” In addition to the distribution business, Diesel 24, a new Glasgow- See page 20 for the latest Portland based fuel card business complements the existing fuel card business. Market Report which looks at the ‘workings and impact of unglamorous Read the full story at www.fueloilnews.co.uk. places like Grangemouth’

Back to basics “In twenty years there hasn’t been much change,” explained Caroline. Traditionally eputy editor, Liz Boardman, attended roadside enforcement was followed up by the Freight Transport Association’s (FTA) an offi ce visit but now VOSA is proposing to D2013 Transport Manager conference do routine follow-ups remotely by email or in Warrington. Amidst a packed programme of telephone. Not only will this save time for events, Liz picked out some of the highlights. operators, but it will enable VOSA to focus more we have the heavily on non-compliant companies. If the trial Misunderstood but not forgotten is successful, VOSA plans to roll it out across the Senior traffi c commissioner, Beverley Bell opened country within the next year. answers the conference with a video message for all the unloved transport managers across the country. Professionalising the industry Despite being “one of the most important Plans are afoot within the FTA to address the jobs” in the industry it is a role often overlooked public’s somewhat negative view of the logistics and misunderstood by company directors. The industry and to attract more young people to the responsibilities are numerous and can have sector. serious legal implications. Beverley encouraged Isobel Harding, FTA’s skills, policy and transport managers to go back to basics, look at development manager shared some worrying maintenance records, build relationships with statistics with attendees. Approximately 800,000 VOSA and more importantly “to have a cup of tea logistics jobs will need to be fi lled by 2020, with and chat with operations, whilst also checking the majority of them being for drivers. However, tachograph results.” in 2012 there were 76,000 drivers’ jobs with only 5,200 applicants, which does not bode well. In Beverley’s mind transport managers fall in to three distinct categories:-

1. Those who are good but have no FTA’s Isobel Harding backing has been 2. Those who are ignorant instrumental 3. Those who are incompetent in the development of new Fleet For number one, her advice is to cover your back Management qualifi cations and email your directors, for number two – attend a course and for number three – fi nd another job! Currently there are no nationally recognised New ways of working and accepted qualifi cations for transport Caroline Hicks, head of enforcement transport managers but this is about to change. FTA at VOSA told delegates about a remote has launched its own Fleet Management enforcement offi ce trial, soon to start in the South qualifi cations, with the fi rst courses being made Margate, UK West. available within the next year. + 44 (0)1843 221521 www.fta.co.uk [email protected] www.emcowheaton.com In Conversation

STRIVING TO BE THE BEST

“IT’S AMAZING HOW THINGS CAN personalisation by each depot with the ability to the fairest and most detailed audit,” said IMPROVE WHEN YOU REALLY PUT add photographs and site specific instructions. Mark. “It allows us to benchmark ourselves YOUR MIND TO IT,” MARK NICHOLLS, “With the document ready, we needed against comparable companies facing similar GENERAL OPERATIONS MANAGER AT to present it to the depot managers,” said operational issues. As with any scheme of this NWF FUELS, TOLD FUEL OIL NEWS Mark. A weekend away was arranged for all nature you only get out what you put in, and we EDITOR, JANE HUGHES ON A RECENT VISIT TO THE GROUP’S HEAD OFFICE depot managers at a hotel near Wrexham. were delighted to have had our Lincolnshire Fuels NEAR NANTWICH IN CHESHIRE. “It was the ideal opportunity to get together depot recognised as runners up in the depot to talk things through and to have a bit of of the year category at this year’s FPS awards Not only was Mark speaking about an NWF Fuels fun. Although everyone had given up their ceremony. This depot has been a Phillips 66 initiative which has made a step change to the weekend, the benefits of OASIS (Operational authorised distributor for many years and we company’s health, safety and environmental Asset Safety & Integrity Management System) feel that Phillips continued support of the FPS (HSE) procedures, he was also highlighting the were appreciated straight away. Trainer Dave scheme has been a major factor in raising its impact this has made on the company’s award Mattock set a test which everyone passed and profile within the industry.” success in the FPS depot certification scheme. the managers took back what they’d learnt and Mark originally joined NWF in 1995, leaving set about implementing it in their own depots. HSE IS EVERYBODY’S for a short while before returning in 2000. His The weekend empowered people to take charge role now involves all operational activity within and to change their working environment for the PROBLEM AND the business, including health & safety. better. Six years on, this weekend is still talked EVERYBODY’S about.” RESPONSIBILITY Health, safety and environment – From the biggest NWF Fuels Depot at engaging staff Wardle in Cheshire to the smallest at Droitwich in Formerly, HSE matters were dealt with by a Worcestershire, all depots have taken great pride NWF Fuels has 17 depots nationwide; central body in the NWF plc Group. Wishing in integrating OASIS into their daily routines. having scored between 91-100%, four now to take back control and empower its staff, “HSE is everybody’s problem and have platinum status – Stoke, Browns of Burwell, Mark together with managing director Kevin everybody’s responsibility,” said Mark. “Everyone Lincolnshire Fuels and Yate near Bristol, whilst Kennerley, and sales director Mark Adcock, got working in our depots knows the correct with scores between 81-90% all other audited together to produce a de-jargoned, plain English procedure if an issue should arise and that depots have achieved a gold status. bespoke document for HSE and operational accuracy and speed of response are of the “Our ethos is that it’s people that make the asset management; they were assisted by Dave essence.” difference and these results are a real testament Mattock of Beacon Safety. to the efforts and dedication of everyone within Totally tailored to depot operations, Making great strides our business,” said Mark. “The improvements this was to be a document which could be Since implementing OASIS we have re-audited have been made through the introduction understood and acted upon by everyone, at our depots through the FPS depot accreditation of understandable and relevant procedures whatever level. As emergency response provision scheme with each one improving its score – combined with the buy-in from all of our depot and environmental impact is particular to some significantly. managers, without the need to spend vast sums each depot, the document was designed for “Within our industry this scheme offers of money.”

8 Fuel Oil News | November 2013 Have questions about

Working across the Lincolnshire countryside Tank Truck is Lincolnshire Fuels – one of four NWF Fuels depots which have now achieved platinum status in the FPS accreditation scheme Equipment?

we have the answers

Looking for an upgrade – fuelling a with depot managers to help them implement more competitive spirit the new measures, and there’s been a buy-in “Depot managers take real ownership of their from everybody; responsibility has been taken depots and there’s a competitive spirit with and expanded with local depot managers all wanting to be the best. A real desire to see improving their own procedures. how it’s been done, means those with gold “Post Buncefi eld, the fuel distribution status are very keen to learn from the platinum industry has seen a huge change in attitude to depots. It’s great that we’ve captured the HSE. Over the past few years NWF Fuels has competitiveness of the company’s sales arena been on a journey; we’ve completely immersed and translated it into the operational side of ourselves in HSE and the subject is no longer the business. a mystery. We understand exactly what it “We liken our depot managers to Swiss means and it all makes perfect sense. It’s now Army pen knives, they are critical components embedded in our culture and as an added in our business and take responsibility for bonus it’s improved our surroundings. I would everything that happens at their depots, and like to thank David Mattock, whose support we arm them with the tools to tackle any job. has been invaluable, for making what at fi rst “Regular internal HSE audits are appearance is a rather turgid subject, most undertaken after which we debrief with action interesting and engaging, the whole company plans produced to ensure that everything’s has benefi ted.” still going in the right direction. We’ve worked

NWF Fuels trades under the Dragon Petroleum, Knutsford Domestic Oils, Malpas Oils, JP Oils, J&K Fuels, J.W.Keep, Bassett Fuels, G Thomas & Sons, CP Fuels, T Splitt, Fuel Oil Supply Co, Oil Ignition Lessees, Lincolnshire Fuels, Margate, UK Broadland Fuels, Browns of Burwell, Swan Petroleum and Evesons Fuels brands. + 44 (0)1843 221521 [email protected] www.emcowheaton.com In Conversation

SIMON – INVESTING IN OUR INFRASTRUCTURE

“FROM AN ECONOMIC PERSPECTIVE, IMMINGHAM IS A VERY IMPORTANT HUB IN THE UK’S INFRASTRUCTURE,” SAYS KEITH L JACKSON, DIRECTOR OF IMMINGHAM STORAGE COMPANY, PART OF SIMON STORAGE.

In addition to being home to Simon’s Growth in the East terminal, managed by feeds into a bioreactor tank for treatment before Immingham East and West terminals, the Andrew Rhodes, has largely been both by organic being discharged into the Humber under an Humber Estuary has two refineries which development and by acquisition; an ex liquid environmental permit. The West terminal, which together supply over 20% of the UK’s refined sulphur terminal, the most recent purchase, was has a similar system in place, can additionally product – Total’s Lindsey and Phillips 66 Humber, acquired three years ago. The terminal, with up recover up to 250 tonnes of water per day for the latter specialising in petroleum coke for to 14” import/export lines and easy-to-convert reuse in other applications. export. tanks, offers significant flexibility as recently Fuel Oil News editor, Jane Hughes was The Associated British Ports’ (ABP) witnessed by the conversion of some capacity invited to take a tour of Immingham Storage to Immingham Dock & Grimsby Ports receive to gasoline standard post Buncefield with Safety see the operations first hand. between 55-60m tonnes of cargo a year, Instrumented Systems. The facility can offer food of which approximately 22m tonnes are oil grade product storage, as well as pressurised Managing a capital intensive business products. Immingham Storage handles large chemical gases. Installed 18 months ago, the Established in 1929, creosote was the first quantities of oil products, including many niche East has a holding tank for effluent which then product stored by Immingham Storage at the and specialised refined products. Fuels represent around 40% of the Simon business; a licence to store crude oil was surrendered in 2007 but Company information recent enquiries may change this position. The two Immingham terminals operate via Simon Storage, part of Inter Pipeline Europe Ltd, is a wholly owned subsidiary of Inter Pipeline Ltd., two deep water jetties with 6 berths owned by which operates energy infrastructure assets in western Canada, the UK, Germany, Ireland ABP; each can accommodate ships up to 50,000 and Denmark. DWT. Approximately 50 ships a month call at the West terminal to deliver or collect products, The 4th largest in European capacity, Inter Pipeline’s European operation has 8 terminals in the with 25 ships a month using the East terminal. UK, Ireland and Germany with a combined bulk liquid/gas storage capacity of 1.28 million m3, Together, Immingham East and West and 4 terminals in Denmark with 1.8 million m3. Across Simon’s storage network, 250 different comprise the UK’s largest terminal of its type, products and blends are handled, including the full range of petroleum and petrochemical handling up to 1.5m tonnes of product a year products, renewable fuels, chemical products and vegetable oils. with over 600,000m3 of storage.

10 Fuel Oil News | November 2013 West terminal before being exported to the USA. system fit for the next 25 years of its life.” The retail market has become increasingly Like much of the UK’s terminal With energy costs to run the sites a big difficult with an overall decline in consumption, infrastructure, both terminals were largely consideration, a biomass boiler, rather than an and dieselisation of the car fleet. The UK is now developed in the mid-1950s. Texaco and Esso oil one, is being considered for steam production. a net importer of diesel and adding ethanol (sea fed from Fawley) had terminals in the It is hoped that a mix of energy sources will give to gasoline, which is in oversupply, for RTFO area – both acquired by Simon as part of the some protection against future energy price purposes has exacerbated its market problems development of what was to become the East fluctuations. further. International product imbalances terminal. have removed traditional dumping grounds for It takes a 100-strong team, working 5 Coping with the legacy of Buncefield gasoline from Europe. “It’s a buy one, get one shifts daily round the clock 365 days a year to “The industry’s head went down in a big way free market, where gasoline is taken in return receive and deliver products, and to take care post Buncefield,” said Keith. “Working with for a deal on diesel from UK refiners,” said of routine maintenance, breakdown, out of regulators, the industry took a long, hard look Keith. “We are pleased that from a standing service inspections and project work such as at how it conducted itself in order to learn from start, our customer, Prax Petroleum, has been changing product in a tank or updating systems/ the incident. Simon, in common with the rest successful in growing its commercial business infrastructure. Some projects, like a current one of the sector, has spent much time and money here at Immingham against this background of to replace electrical infrastructure, will end up in improving technical competence as well as a difficult market. costing over one million pounds and take up to its infrastructure; we now have a much better “We’ve been reasonably successful in four years to complete. Seeking to maintain a structure in place to effectively control Major attracting new chemical business,” said Keith. good level of control, project management work Accident Hazards as well as better and more “It’s a market dear to our hearts and one in is handled internally, with Simon developing demonstrable safety leadership. which we have much technical expertise. REACH its own conceptual and then detailed design, tendering, selection of contactors and management of project delivery through to SAFETY IS PARAMOUNT TO SIMON, EACH OF ITS UK project commissioning and handover to the TERMINALS HAVING WON A ROSPA AWARD EVERY terminal. Over £2m is spent on capital maintenance YEAR FOR NEARLY 20 CONSECUTIVE YEARS. THIS projects annually, primarily to tackle ageing YEAR THE IMMINGHAM TERMINALS EACH MERITED plant issues. In addition to the ‘routine’ tank A SPECIAL ORDER OF DISTINCTION FOR EXCELLENCE inspections – there are 137 tanks in the West and 104 in the East. Keith told Fuel Oil News: IN HEALTH AND SAFETY. “The big push is now on the site’s key arteries, its pipework.” Visual detailed checks, radiography and NDT techniques are among the methods “Born out of Buncefield, the implementation has had the effect of driving out hazardous used to identify corrosion, poor quality welding of the containment policy has made a huge chemicals from the market, particularly toxics. and other defect issues. At the West 95% change around the site. New bund walls have Regulatory pressure in Europe means it’s of tanks are the original build although many had to be constructed extending up to three increasingly difficult to operate here; much have had major refurbishment work performed, metres below ground. Boreholes enable regular manufacturing has gone to the Far East where including new floors and bases installed, samples to be taken to monitor groundwater there’s little equivalent environmental legislation. as a result of the ongoing inspection and quality and movement. We’ve spent over £2m New world scale plants offer economies of scale refurbishment programme. The cost to rebuild on work so far at Immingham that is necessary and levels of manufacturing integration and three tanks recently was £5m. Some ten tanks to give us a licence to stay in business. sophistication that are simply not achievable have been totally replaced on the West terminal in European plants that were often constructed alone as a result of this inspection programme. Working in a changing storage world in the post war period. Coupled with structural “This is the proverbial Forth Bridge – we’re “The storage industry has seen a lot of change changes, manufacturing businesses closing, and constantly seeking to identify potential problems over the last few years; as oil and chemical supply contracts ending, it’s a sad reflection of a and then fixing them – making it a very capital majors have retreated, we’re working more with chemical manufacturing sector in decline. intensive business,” explained Keith. “We audit oil and chemical traders and wholesalers. The “In February 2014 COMAH, after ourselves and our contractors – we step in early latter are part of a logistics chain rather than amendment under SEVESO III, will classify fuel to correct so that any identified poor practice, original manufacturers, meaning that customer oil as Dangerous for the Environment. For a be it safety related or quality of delivery, is not technical expertise has dwindled and the level of market that’s not great right now and has not allowed to escalate. This is a human intensive contact and information quality has declined.” been historically strong, this additional legislation process and virtually a permanent construction Simon does draw on in-house expertise will be another challenge. Traditionally a lower site with up to 100 contactors on site at any one – its safety team is headed by a chemistry end product in the market, this new classification time. PhD, and there are specialists in environment, has the potential to introduce significant new “For example, we’re currently studying mechanical, electrical/control engineering and costs to the storage of this fuel which is already the site fire system – which was built some 25 human behaviour – and, being part of a larger seeing reduced volumes. years ago. Life’s moved on so we’re assessing group, there is usually someone with the right ours against current best practice and expect knowledge to help handle any new specialised Continued on page 13 to spend a not insignificant sum on making the product. Fuel Oil News | November 2013 11 Prax Petroleum is one of the largest independent oil importers and traders in the UK.

Call our sales team now for the best spot quotes, supply contracts and pricing options.

Contact us on: 01932 843354 www.praxpetroleum.com

Prax House, Horizon Business Village, 1 Brooklands Road, Weybridge Surrey KT13 0TJ

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12 Fuel Oil News | November 2013 In Conversation

Continued from page 11 “Marine fuel also has issues. As ship operators look to move away from heavy fuel oil as a result of SECA (Sulphur Emissions Control Areas), we face the biggest change since shipping moved from coal to oil. Government sponsored Navy oiling stations around the world provided physical impetus for the change from coal to oil burning ships of the line and the merchant fleet at the turn of the 19th century; now we face a new transition. LNG is mooted as the new marine fuel of choice but its storage, shipping and distribution are extremely difficult and hence expensive; there are no current standards for bunkering and little infrastructure on the ground and no national need to drive through change. LNG storage has been built in Andrew Rhodes manages the East terminal where Keith Jackson, director of Immngham Storage Company growth has been organic and by acquisition Rotterdam (GATE) and in the UK at the Isle of Grain, amongst other UK/European locations. (CASMS) team to focus on compliance. The await results from Statoil’s pilot plant in Norway However, these were not designed with ship team assists terminals with customer queries to see how these economics develop.” bunkering specifically in mind or indeed any related to stock reporting and excise duty issues break bulk activity for onward distribution, where required, providing expertise to facilitate Providing infrastructure support although clearly these are under consideration full compliance with relevant stock management On a dock site first developed over 100 years now. Construction of smaller scale distribution and HMRC approvals. ago by the Great Central Railway Company with and bunkering sites at other main UK ports is interesting connections to the Pilgrim Fathers a possibility but we are a small island where Opening up new storage horizons and the Titanic, Simon continues to play its typically no one wants LNG storage in their back Greenergy operates a biodiesel plant at part in supporting our energy infrastructure, yard. However Simon will look at opportunities in Immingham West. Indeed, the growth of bankrolling asset conversion work against this field and, if there’s half a chance of making the specialised fuels market, and biofuels in a commercial agreement with a potential it work, we’ll explore the relevant avenues to particular, has provided new work along with the customer. develop concepts on a commercial basis.” recent introduction of a ‘first fill’ fuel contract for “Storage and distribution of oil products is prestige cars on behalf of another customer who tough at the moment for our customers. In the Greater complexity is new to the terminal. halcyon days, we’d often wonder how we were Stock control work has become increasingly Now, as oil majors withdraw from North Sea going to accommodate enquiries for product. complicated with some niche areas – such as oil fields, selling interests to smaller companies In recent times the credit squeeze has had an AvGas for light aircraft and military requirements with novel technologies to get the last buck impact and backwardation means product can – requiring much additional documentation out of the field, a decommissioning and waste be worth less just a day after it’s purchased. As and HMRC administration. The capability to management industry is emerging. a result, more product is now mortgaged, with store hydrocarbon oil and biofuel products “We were part of the process when North a bank holding legal interest, and stocks are under excise duty suspension arrangements is a Sea oil extraction took off, now as its fields managed to maintain as small an inventory as key aspect of the Simon Storage business. The decline and close there’s a new storage need practicable, but balancing this against economic correct operation and control of stocks held in emerging,” said Keith. “We now have a permit parcel sizes for shipment.” the duty suspended warehousing facilities is from the Environment Agency to handle a Safety is paramount to Simon, each of fundamental to this capability. broad range of aqueous waste and to transfer its UK terminals having won a RoSPA award Recent years have seen significant changes; this to UK disposal sites. Some waste will be every year for nearly 20 consecutive years. This which have led to greater complexity in terms of potentially presented with Naturally Occurring year the Immingham terminals each merited Simon’s stock accounting and HMRC compliance Radioactive Material so we’re now looking a special order of distinction for excellence in functions. The changes have been driven by a to gain appropriate permitting to allow us to health and safety. number of factors including developments in fuel handle these specialist streams. Ideally, we’d technology and environmental legislation, more like to receive, store and treat using our own Living with the hydrocarbon chain complex fuel blending operations, economic onsite effluent treatment plants. “The hydrocarbon chain remains an intrinsic volatility and a revised regulatory methodology “Still a decade off, I believe there’s a whole part of the complicated building blocks which resulting from reductions in HMRC resources. new industry to be borne out of fracking, with make up our 21st century life. It’s not just about In combination these factors have had a energy storage and responsible receipt, disposal buying oil products such as the fuel for your car; substantial impact. of waste water and chemicals derived from these it’s about all the other essential benefits that oil Simon Storage has responded to this processes. produces for our present way of life.” challenge by establishing a dedicated in-house “Also in the Humber region, carbon capture Customs and Stock Management Services and storage has been under discussion. We

Fuel Oil News | November 2013 13 Business Focus

CLEVER CHEMISTRY FUELS BUSINESS

WITH MOST BIODIESEL CURRENTLY TRADED THROUGH THE ROTTERDAM BARGE MARKET, ONE UK COMPANY HAS REVEALED AMBITIOUS PLANS TO CONVINCE THE UK THAT HOME GROWN BIODIESEL FROM WASTE IS THE WAY FORWARD

Having set out to develop a ‘robust and flexible A NEW DOCKSIDE PLANT IS PLANNED business model around low grade waste vegetable oils’, RGM Fuels (see page 6 Fuel Oil TO ALLOW US TO SCALE UP TO A MUCH LARGER News July) is now in contract talks with several PRODUCTION ENABLING PRODUCT MOVEMENTS household names and fuel distributors. IN AND OUT BY SHIP “We’re at the stage of finalising volumes and prices with companies,” entrepreneur and investor Gordon McLure, told Fuel Oil News the original biofuel market, then the food v fuel as an unreliable product,” explained Gordon. “If editor, Jane Hughes on a recent visit. debate arose and the sustainable fuel image made properly biodiesel from waste is totally By combining waste with clever chemistry, was tarnished. An emotive topic, the food v fuel reliable; in fact it can have standards more exact Gordon, together with colleagues Dr Richard debate together with quality issues over biodiesel than those for mineral diesel. Once barriers Jackson (PhD chemistry) and Dr Matthew Davies made from waste cooking oil in what was then a have been overcome, hoops jumped and trials (PhD engineering), convinced investors of what cottage industry, left a poor perception of biofuel undertaken, we’ve been able to convince people RGM Fuels could bring to the market; a deal was and the industry acquired a cowboy image. Low of the product’s worth.” signed with a private equity investor in 2011. grade feedstock led to badly made biodiesel, Practising what it preaches, the team fuels “Using a system specifically designed to quality issues and fuel degradation whilst a DIY its own vehicles with 100% biodiesel. “Presently, process waste vegetable oils, we set out to biofuels market grew up with carte blanche to the B100 market is limited in the UK as the produce biodiesel from waste to a very high make a little bit of diesel without paying any tax. market is ignorant of its capabilities,” Matthew standard,” added Gordon. “Developed by Branded as unsustainable, biodiesel quality was explained. Richard and Matthew, our unique technology questioned with a multitude of reasons proffered enables even very low grade vegetable oils to as to why it should not be used. Down on the farm be processed; arguably this produces the most Distancing itself from this tarnished image A tree lined drive leads down to Quarry Hill sustainable biodiesel available.” has proved to be a challenge; but as companies Farm, the site of RGM Fuels first biodiesel increasingly look to support their corporate social plant, commissioned at the end of last year. responsibility policy, RGM Fuels reports that Situated in the village of Lathbury in rural High standards – convincing interest in biodiesel is growing again. Buckinghamshire, the plant, which can produce the market “The transition from seed to waste feedstock up to 100 tonnes a day, was built as a pilot plant Historically focusing on virgin seed oils, such as saw huge variations in the quality of biodiesel so to prove the technology and the model. soy and palm oil, much investment was made in there was a lot of resistance to what was seen “Setting up a biodiesel plant is not for the faint hearted. It’s easy to make biodiesel, but it’s very difficult to make biodiesel well,” said Matthew whose enthusiasm for the plant, which he likens to a giant Meccano set, is infectious. With their specialist knowledge in chemical reactors, Matthew and Richard dismissed the expensive cracking and cooking method for esterification, favouring instead a reactor system that enables the use of a broader feedstock range which can be continually, rather than batch, processed. The system is also currently in use at plants in South Africa and in Memphis, Tennessee. “We’ve kept the process lean and mean – new state of the art equipment sits with secondhand tanks and by speeding the process Keeping the process lean up, batch quality is more easily controlled.” and mean - new state of the art equipment sits Nothing is wasted with the glycerine produced in with secondhand tanks the process also sold. “This plant was primarily set up for demonstration purposes, hence the secondhand tanks,” explained Gordon. “A new dockside plant

14 Fuel Oil News | November 2013 is planned to allow us to scale up to a much larger production enabling product movements in and out by ship.” In the meantime, there are interim plans to expand the farm plant and/or buy an existing plant and convert it to run on RGM specific reactors.

New market opportunities Biodiesel from RGM Fuels has an 83% saving on greenhouse gas emissions (GHG) over mineral diesel. “Everyone says they want to be green,” said Andy. “But no one really wants to pay more to be greener.” (Most biofuel sold goes to those who by government directive must use a proportion of biodiesel/bioethanol under the RTFO scheme). However it does not cost Directors Gordon McLure, Richard Jackson and Matthew Davies to switch to biodiesel; in fact in some cases it Very interested in the ‘somewhat untapped gas oil replacement market’ - RGM Fuels believes the non-road actually provides cost savings to the customer. mobile machinery and the combined heat and power markets ‘offer huge potential’ for its biodiesel getting companies to try out our fuel first, we can of a cliff but now market change has brought Whilst RGM Fuels is interested in the dispel the poor quality myth. With quality and opportunity,” says Gordon. “We went into this transport market, the company’s focus is in quantity guaranteed, we hope to make switching industry to be one of the biggest waste oil to supplying the non-road mobile machinery easier. If people are nervous about making a biodiesel producers in the UK. We believe we (NRMM) market and that of combined heat and change, we can starting by supplying them with have the technology and the experience to do power (CHP) which Gordon believes offer huge a B30 blend.” this. potential. “Biodiesel is here to stay and so are we. If “We’re very interested in the somewhat An opportunity you’re looking for good quality fuel, please give untapped gas oil replacement market. By “In 2008 this industry was falling off the edge as a call.”

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Fuel Oil News | November 2013 15 Assets Skills Knowledge just ASK

From operating our own storage assets to specialised distribution solutions. From project engineering and automation expertise to designing and developing biofuels facilities for our clients. Simon is investing in people and facilities for the future. Just ASK. Simon Storage Limited +44 (0)1737 778108 [email protected] | www.SimonStorage.com bulk liquid & gas network Simon Storage is owned by Inter Pipeline Ltd www.interpipeline.com TSA Conference 2013

Progress – but is it enough?

THE 13TH TANK STORAGE ASSOCIATION (TSA) CONFERENCE AND EXHIBITION TOOK PLACE AT COVENTRY’S RICOH ARENA IN SEPTEMBER. A WELL ATTENDED EVENT, REGISTRATION TOPPED 400 AND EXHIBITOR NUMBERS DOUBLED TO OVER 60.

Focusing on HSE compliance and process safety management, the morning conference was chaired by Peter MacKay, managing editor and publisher of Hazardous Cargo Bulletin. The concensus among the fi rst fi ve speakers was that whilst the industry has come a long way, there is further to go.

HSE – rising to the challenge “Buncefi eld woke us all up,” said Ian Travers, head of the HSE’s Chemical Industries Policy Unit who reported that globally, the UK was ‘right up front’ on its process safety leadership. Maintaining the country’s ageing plants takes a high level of competence, resources and more than a little TLC. “The industry has come a long way with much time and effort spent in learning lessons, but 25% of HSE’s work still involves Useful information for Fraser Mackie, Trident Engineering Consultants, investigation into incidents, this should be lower.” Ron Tomal, Geoff Mountford and Neil Rimmer, Certas Energy The UK has 1000 COMAH sites. HSE is happy to be challenged on the controlling of Going public – new requirements said Jenny Clucas, strategy director for chemicals major hazard risks to ensure a better outcome Christina Roberts looked at the impact of the and petrochemicals, Cogent. “We need to be for all concerned. In response to an industry Seveso III directive on bulk liquid storage, grown up and take responsibility.” By 2014, the request for higher level interface, a strategic reassuring the audience that ‘a lot of things will target is that 50% of COMAH sites will have forum has now been established. stay the same’. The modernised directive will participated in training awareness and process Wishing to avoid duplication in take into account the Internet and the public’s safety courses – leadership, management inspection, from April 2014, lower risk COMAH right to information on a site’s safety reports, and operational – delivered to agreed training establishments will have just one Competent emergency plans and transitional arrangements standards. In the past there was ‘a dearth of Authority (CA) (HSE or Environment Agency) in both digital and printed format. training’ and a ‘lack of standards’ and whilst we to inspect them. Next year’s inspections will HSE is trying to make this as ‘burdenless’ should celebrate where we, there’s still a long focus on the control of a particular risk with as possible and has been trialing at selected way to go,” said Jenny. management of that risk to be more clearly sites nationwide including Petroineos at demonstrated. Grangemouth. Work is ongoing with respect to disclosure at sites where confi dentiality and security issues need to be considered. KEY DATES All sites, not just top tier, will need to proactively produce public information. Whilst 15th February 2014 top tier sites are used to producing such heavy fuel amendment information, lower tier sites will need to ’up their game’ said Christina. In 2014, there will be a April 2014 greater emphasis on sub-COMAH sites where an one CA inspector for lower risk sites incident would have an impact. CHIP is on its way out, to be replaced 1st June 2015 by CLP (chemical labeling and packaging) by Seveso III new regulations 2015. From February 2014, heavy fuel oil will New COMAH regulations in force in change from ‘dangerous to the environment’ to Great Britain ‘petroleum products’ category. Alternative fuels are now a named category.

Leadership weaknesses exposed Despite good progress post Buncefi eld, Taking responsibility – Dr Jenny Clucas, Cogent, leadership weaknesses continue to be exposed strategy director for chemicals and petrochemicals Fuel Oil News | November 2013 17 TSA Conference 2013

Continued from page 17

We haven’t sorted this out by a long way,” agreed Allan Laing, chief executive, Pentagon Useful references Chemicals Not only referring to Buncefield, his presentation was illustrated by images of Flixborough (1974), Piper Alpha (1988), Texas Chemical and Downstream Oil City (2005), and Deepwater Horizon (2010), a Industries Forum (CDOIF) total of 221 fatalities. www.hse.gov.uk/aboutus/meetings/ “We’re good at talking about what to committees/cif/ do but not how to do it,” said Allan. Pentagon carried out 25 plant audits between October CIRIA R164 2012 and March 2013, providing the audience Design of containment systems for the with a practical example of process safety prevention of water pollution from industrial implementation in action. On the front row – Paul Denmead, terminal incidents (R164) Revision affects COMAH and manager, Falmouth Petroleum and Andy “The biggest lesson we’ve learnt is that we Dickinson, operations manager, Henty Oil sub-COMAH sites. haven’t learnt the lessons,” said Bud Huspith, www.ciria.org Unite’s national health & safety advisor. “Why approach to encourage and promote health, is it taking so long?” With union reps blaming safety and environmental improvement. New Energy Institute – tertiary containment, management and employers needing to be resources – leak detection, human factors and bund liners and tank base integrity reminded of their duties, Bud stressed the need ageing plant – are due for publication. A matrix Guidance on risk assessment and conceptual for trust, honesty and workforce involvement. based environmental risk assessment tool is design of tertiary containment systems In the Q&A session that followed, we were newly published, for bulk storage of petroleum, petroleum reminded that safety’s enemy was complacency Dr Mark Scanlon, HSE team manager at the products or other fuels – just because nothing has happened, the risks Energy Institute (EI) spoke about new guidance Guidance on conceptual design, selection are still there. Safety is an ongoing journey which on containment (see the panel alongside). The and lifecycle assurance of liners intended to needs constant commitment. Whether at work, EI is interested in talking to companies that improve integrity of bunds to above ground home or play, doing things to a consistent high manufacture products for tank integrity with a storage tanks standard is difficult for us humans. view to securing additional finance for fire testing. Products to improve integrity of an above- There were product presentations from ground tank base – due for publication in Q4 New resources and guidance Abfad and Aquilar. Chris Haritou of Abfad spoke 2014 Like Mick Jagger, Richard Kellaway senior advisor, about FuelVac, a patented, multi-layered tank www.energypublishing.org Global Infrastructure Management, is ‘still lining system with class 1 vacuum leak detection, strutting his stuff’ albeit in tank storage. Richard accreditation for which is in its final stages Heavy fuel oil led the afternoon session which opened with with TUV Nord certification. Julian Walmsley, www.hse.gov.uk/comah/guidance/hfo- Peter Davidson, director – safety, commercial and managing director of Aquilar discussed the june2013.pdf projects, UKPIA. company’s leak detection products for the critical Along with the TSA, UKPIA is a member of 6 areas in tank farms and terminals including HSE HID Regulatory Model the Chemical and Downstream Oil Industries TraceTek sensing cables with the ability to detect www.hse.gov.uk Forum (CDOIF) which uses a collaborative and locate hydrocarbons at any point. Process safety courses www.process.nsacademy.co.uk/process- safety.aspx

Seveso III www.hse.gov.uk/seveso/ and bulletin www.hse.gov.uk/seveso/bulletin.htm

UK strategy for skills in process safety management 2012 – 2014 Updated March 2013 www.process.nsacademy.co.uk/ news-events/news/process-safety- management-consultation.aspx

Ron Savin, sales manager and Semir Johar, sales engineer for the southeast, Anton Paar – one of the 60+ exhibitors at the event

18 Fuel Oil News | November 2013 Flashpoint anaylsis from Anton Paar The former Petrotest range of fuel and lubricant instruments have been branded as Anton Paar products, enabling the company to offer its customers the very latest in Flashpoint analysis. The Abel flashpoint tester – the ABA4 (closed cup) is used for samples such as solvents or jet fuels. Not only is it robust and easy to use but it can withstand the rigors of a busy terminal whilst its large data memory ensures all test data is securely retained. The PMA5 (closed cup Pensky-Martens) and the CLA5 (open cup Cleveland) both feature a colour display and an innovative ‘jog wheel’ user interface to simplify use. Safety comes as standard – the PMA5 and CLA 5 are the only instruments to feature integral fire detection and extinguisher. The PMA5 is suitable for samples such as diesel or the classification of waste materials, whilst the open cup version is used for bitumen and lubricants. The new range from Anton Paar www.anton-paar.com Hytek extends product range Hytek has recently launched its new catalogue, containing over 60 new products across 12 different categories. The ALPHA twin commercial pump, which allows two different fuels to be pumped from one cabinet and the dual outlet commercial pump, which allows the same product to be dispensed at two different speeds, are now available. ATEX features heavily amongst the new offerings, with a large range of approved equipment for use in flammable areas, whilst an extensive range of AdBlue dispensing pumps and filters provide solutions for the ever growing and changing market. Other extended ranges include grease equipment accessories and an enhanced selection of hand pumps for fluids like chemicals and solvents. Additionally, with the two new versions of the OLE hi accurate tank gauges comes an extended choice of options including hi, low, and bund alarms. A new economy 24 hour fuel test kit for diesel bugs and vent dryers has also been introduced as the use of biofuels increases. The catalogue is available in both retail and trade formats and subject to conditions, all products are in stock ready for despatch the same day. www.hytekgb.com Out now – the new Hytek catalogue

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Fuel Oil News | November 2013 19 Portland market report

November update the site? In the good old days, Grangemouth major agenda item for Scotland’s independent was a BP facility, a company which for many accession to the EU, the issue does highlight why With the Scottish Independence vote less than 12 years was almost as Scottish as it was British the Unionists are right to state that Scotland’s months away, it was not surprising to hear leader (Petroleum), with its operating bases in automatic entry cannot be taken for granted, as of the Scottish National Party (SNP) Alex Salmond, Grangemouth and Aberdeen. But BP sold on many technicalities, the new nation will simply talking forthrightly about the recent strike in Grangemouth several years ago and it is now is a fail the national entry criteria. Meeting the criteria Grangemouth, at his party’s Annual Conference 50/50 joint venture between PetroChina (China’s will not be a quick process either. In the case of in October. In a keynote speech otherwise state oil company) and Ineos - a Swiss based emergency oil stocks, Scotland will have rely on heavily laden with symbolism around “Scotland’s conglomerate, largely funded by private equity business to hold the stock (as Britain currently destiny,” the focus on practical issues around money from London. Only the most delusional does) or it must build scores of new fuel storage Grangemouth, seemed rather incongruous. But will consider it likely that the Chinese mandarins tanks (= massive cost) and set-up an oil stocking the Grangemouth strike and the Grangemouth and money-men from the city will have anything agency (as for example Belgium does). With the complex in general are so vital to the Scottish but the most scant regard for Scotland’s fuel mortal problems currently facing Grangemouth, economy – not to mention an independent resilience and so it may transpire in 2017, that relying on the likes of Ineos to meet Scotland’s Scottish economy - that it is no wonder that it was the Scottish Government will be faced with the emergency fuel requirements is a total non- on the mind of the First Minister. prospect of either subsidising or nationalising. starter, which therefore means the new Scottish One has to ask at what cost this will be to the Administration will have to build a stock agency Monumental importance to the Scottish tax-payer and furthermore, whether from scratch. To put that project into perspective, Scottish economy this is the kind of economic socialism that SNP an identical exercise in Belgium (the creation of In fuel terms, Grangemouth is Scotland, with voters really believe in. Also, what other key assets APETRA) took 10 years to complete! over 75% of supply north of the border coming would the new Scottish Government choose So there we have it – a whole article on the from this one source. Its importance to the to nationalise, under similar circumstances? Of oil industry’s place within Scottish Independence, British economy is large, but to the Scottish course, few would blame the SNP prospectus that doesn’t even touch the breathtakingly economy it is monumental. Nonetheless, with for avoiding the subject of nationalising key diffi cult issues around North Sea Oil (which also the present integrated UK fuel supply chain, industries (rarely a vote winner amongst the will affect the CSO mechanism!). But the issues the loss of Grangemouth Refi nery is costly but coveted “middle ground” electorate), but the around refi ned oil – Grangemouth, Scotland’s not disastrous. Sea-fed depots in Aberdeen and fact remains that within the lifetime of the fi rst place within the UK’s inter-connected supply- Inverness can receive fuel from other refi neries Independent Scottish Parliament, this could be chain and Scotland’s future fuel resilience in the UK, whilst the central belt can be supplied the reality. It’s either that or running the country – should all serve as a reminder that the issues from import facilities on the Clyde and Forth. If without a refi nery and relying 100% on fuel at stake in “breaking free” are complex and any strike were to persist for signifi cant amounts imports – a situation that no other country in the cannot be addressed through superfi cial, spin- of time, then further volume requirements could EU faces. doctored debate. It is on practical issues that be trucked in or supplied by rail from the North the independence vote should (but won’t) of England. But what would the “reserve” supply- Emergency oil stocks be based because successful countries in the chain look like in an Independent Scotland? Scotland’s automatic membership of the EU modern world are not defi ned by fl ags and Admittedly even the most rampant (Unionist) post-independence, is a moot point, but it is also concepts of nationhood, but rather on the No campaigner could claim that Scotland would very relevant to the Grangemouth situation, as workings and impacts of unglamorous places like no longer receive fuel from England or elsewhere it provides one further reason why any strike at Grangemouth. once the country broke free - that is after all, the Grangemouth is currently manageable. Why? nature of globalised markets. But in a debate Because of the EU’s emergency oil stocking that has focused heavily on the idea of “going it rules, which dictate that all EU members must alone”, how many Scots will vote next year fully hold between 60 and 90 days of emergency understanding the impact of living in a country oil stocks. Now signifi cantly for Scotland, most where (virtually) all fuel supplies are reliant on a emergency stocks are held outside of their For more pricing information, see single refi nery, which according to its owners loses country and this would mean that on day 1 of page 26 £10m per month and will shut by 2017 - unless a independence, they could not meet their oil “radical survival plan” is accepted by workers, local stocking requirements (quite perverse really, authorities and the national government? considering Scotland’s North Sea treasure but In addition, how many voters in next year’s EU rules are EU rules!). So whilst nobody is Portland Fuel Price Protection referendum will be aware of who actually owns suggesting that emergency stocking will be a www.portland-fuel-price-protection.com

20 Fuel Oil News | November 2013 Logistics

Brit European – a first tier supplier at a second tier level

A rapidly expanding third party logistics In addition to a head office in Crewe, specialist, Brit European has developed from its Cheshire, the company also has a large storage roots as a small transport company based in and distribution facility in the port of Zeebrugge, rural Cheshire to a truly pan-European logistics Belgium. provider. Managing director, Graham Lackey, joined With an ambitious growth pattern, the the company in 2007 and immediately set company has five core business activities – bulk about reinventing it. The first task was to create fuel, bulk chemicals, automotive, construction a new livery for its 300 strong fleet. The second equipment and plant. task was to instil the partnership approach into the company’s employees. “Our approach to business is focused on RELIABILITY, SAFETY building long term working relationships with Graham Lackey is focused on building long our customers. Everything we do is aimed at term working relationships with customers AND SYSTEMS ARE VITAL achieving our customers’ objectives and securing ELEMENTS IN A SOLID a mutually beneficial, sustainable business DISTRIBUTION OFFERING, partnership,” explained Graham. “Reliability, safety and systems are vital elements “Whilst we have invested in the latest fleet in a solid distribution offering, none more so NONE MORE SO THAN IN and IT systems designed to manage and control than in our bulk fuel division where we are able OUR BULK FUEL DIVISION every aspect of our operation, people remain to offer the standards, safety and systems of a at the heart of our business,” adds Graham. first tier supplier at a second tier level.”

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EXPANSION AMONGST OTHER THINGS HAS BEEN HIGH ON THE AGENDA FOR TOP OIL THIS YEAR. HAVING RECENTLY SIGNED DEALS WITH TWO NEW AUTHORISED DISTRIBUTORS, THE COMPANY IS COMMITTED TO DEVELOPING ITS BRAND AND MAINTAINING ITS FOOTHOLD AS A MARKET LEADER ACROSS THE FUEL SECTOR.

John O’Donovan, national reseller manager Brother and sister James and Asumpta O’Donoghue of Killarney Oil with John with Top Oil says the company prides itself on O’Donovan, national reseller manager, Top Oil providing a true end-to-end solution from port to pump, to ensure the best quality products for Irish consumers.

New partnerships Talking to Fuel Oil News’ Irish correspondent, Aine Faherty, he outlined how the group has concentrated on forming partnerships with/ supporting authorised distributors across the country. “The investment we’ve made in the brand over the last 12 months has been very well received,” he explained. uncertainty on how supply lines will develop over James, the company chose to partner Top A family-owned Irish company, Top Oil is the coming years, distributors are re-evaluating Oil because it is a national brand with a well one of the largest and oldest importers and their position and this is working in our favour,” established network across the country, and in distributors of fuel in the country. As well adds John. particular, Kerry. “We believe that by being a as home heating oil, marked gas oil, road He believes that it’s not just price attracting branded distributor, delivering quality assured diesel, unleaded petrol and aviation fuel, resellers to the brand, but also the extra support products, it gives our customers peace of mind,” the company is a major distributor of coal and backup it offers. “The last few years have she commented. and other energy related products and now been diffi cult for oil distributors, volumes have Asumpta also believes that the business directly employs over 300 people. fallen and there are tighter margins,” he told support and advice they get from the Top Oil Top Oil supplies over 30 company owned Fuel Oil News. “Distributors have had to adapt to team is an important aspect of the partnership. depots and almost 150 retail sites and service facilitate lower order sizes, overhead reductions “They keep us up to date on changes in the stations, fuel card locations and depots and is and changing customer credit culture.” industry, stock management, credit, pricing and well placed to grow in its competitive market. Killarney Oil is one of Top Oil’s newest marketing. Last winter when there were issues authorised distributors. As a business that has with kerosene supply across the country, we been operating since 1991, it supplies the were always supplied with product, which was Whilst in recent years, Top has seen the domestic, commercial and agricultural sectors invaluable.” industry move away from contracted and in the County Kerry tourist town, as well as the With a clear focus on developing its network branded distributors, the company believes that hospitality sector – servicing a large number of of authorised distributors, Top Oil’s latest signing this has shifted, with distributors now recognising hotels and B&Bs. is Doran Oil of Cashel, Co Tipperary, bringing the the importance of having a national brand on According to Asumpta O’Donoghue, who total number of distributors to 30. their fl eets and in their depots. “With some manages Killarney Oil with brother,

Fuel Oil News | November 2013 23 -\LSSPUN@VYRZOPYL 7V^LYLKI`-\LSZVM[

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Shared deliveries … … a consideration for

Up until the mid 1980s, oil companies in the UK were distributors? self sufficient in the ownership and management of their road tanker fleets. Aside from the cost of product itself, by far the largest component of the In 1985 a wind of change started to blow when Amoco distributor’s cost base is making deliveries. Looking at domestic heating decided to outsource its mainline delivery operations to haulage oil – a core market segment for many distributors – a number of factors contractor Wincanton. Since then, the outsourcing of road delivery present challenges: operations has become the norm in the oil products’ supply chain, based on the rationale that it ‡ Geographical dispersion of customers is not considered to be a core ‡ Multiple small drops/deliveries competency in an oil company’s ‡ Pronounced seasonality downstream business. ‡ High susceptibility to sudden demand surges, driven by Logic dictated that logistics temperature swings was a task best left to those specialising in owning and A key element in the distributor offer is building a operating truck fleets i.e. haulage good reputation for meeting the above challenges. This contractors. In addition to the embraces factors such as quality and reliability of service, physical delivery operation, the opportunity to forge and nurture customer relationships, contractors typically provide the ability to build a strong knowledge base around three key supporting activities individual delivery issues/locations and accompanying scope/ – order taking, scheduling and opportunities for achieving high levels of customer retention. routing. In many instances they For the domestic heating oil customer segment, also provide stock reconciliations the delivery service and the extent to which it can be and replenishment planning/ promoted and made bespoke are intrinsic features and in management. Taking this a effect an extension of the sales proposition. There are also stage further, contractors have confidentiality issues around customer portfolio details, deployed unbranded or white access to pricing and other sensitive data. With these tankers to facilitate their various considerations in mind, it is hardly surprising that distributors delivery activities, providing have not entertained the possibilities of sharing deliveries scope for enhanced efficiencies Logistically proactive – Par Petroleum has expanded with others covering similar areas, despite the tangible the haulage side of its business to help even out and cost savings. seasonal peaks and troughs. Par recently won a marine opportunities for cost savings and efficiency improvements. contract with Phillips 66 – www.fueloilnews.co.uk On the other hand, the emergence and growth of group/ community buying schemes demonstrates that there is a customer awareness of the benefits of sharing.

Are distributors ready to reassess their delivery operations? Looking at other sectors serviced by distributors such as commercial, industrial and agricultural, the features that characterise the domestic heating oil market are much less pronounced. By and large, these markets have become commoditised and between them they comprise total requirements which are approximately five times larger than the domestic heating oil market. So, is there not potential here for distributors to entertain a measure of collaboration to reap efficiencies and cost saving benefits? Surely the challenges of operating in a mature market which is experiencing structural decline, coupled with the inevitability of ongoing cost and margin pressures, warrants serious consideration of the scope/ opportunities for sharing deliveries – across all market sectors. It remains to be seen if these forces will be sufficient for distributors to Suckling Transport’s multi-award winning TankShare was established reassess their delivery operations and herald a departure from established over 12 years ago. The first branded spot hire road tanker service practice as Amoco’s move did back in 1985. in the UK has a customer base of over 60 companies

Fuel Oil News | November 2013 25 The Pricing Page

Highest price Biggest up day 50.85 ppl +1.04 ppl Wholesale Price Movements: Thu 10 Oct 13 Thu 10 Oct 13 19th September 2013 – 18th October 2013 Kerosene Lowest price Biggest down day 47.84 ppl -1.32 ppl Kerosene Diesel Gasoil 0.1% Tue 01 Oct 13 Thu 17 Oct 13 Average price 49.39 50.28 49.02 Average daily change 0.45 0.47 0.44 Highest price Biggest up day Current duty 0.00 57.95 11.14 51.57 ppl +0.88 ppl Total 49.39 108.23 60.16 Thu 10 Oct 13 Thu 10 Oct 13 All prices in pence per litre Diesel

Lowest price Biggest down day 55 ppl 11.6400.6400 49.04 ppl -1.39 ppl KeroKero DieselDiesel GasoilGasoil 0.1% ExchangeExchange RateRate Tue 01 Oct 13 Thu 17 Oct 13

54 pplppl 11.6200.6200

53 pplppl 11.6000.6000 Highest price Biggest up day 50.41 ppl +0.99 ppl 52 pplppl Wed 16 Oct 13 Thu 10 Oct 13 11.5800.5800 Gasoil 0.1% 51 ppl

11.5600.5600 Lowest price Biggest down day 50 pplppl 47.45 ppl -1.37 ppl Tue 01 Oct 13 Thu 17 Oct 13 11.5400.5400 49 pplppl Price in pence per litre Price US Dollar to UK Pound Sterling US Dollar to UK Pound 48 pplppl 11.5200.5200 Gasoil forward price 29 JJulul 0505 AugAug 12 AuAugg 19 AuAugg 2 266 AuAugg 02 SSepep 09 SSepep 1 166 SSepep 23 SSepep 30 SSepep 0 077 Oct 14 Oct in US$ per tonne

WeekWeek commencingcommencing $940

$920

$900

The Fuel Oil News Price Totem November 2013 – October 2014

Trade average buying prices Average selling prices Kerosene Gasoil ULSD Kerosene Gasoil ULSD

Platts 49.14 59.85 108.08 Scotland 50.66 63.22 109.89 57.90 67.90 113.20 North East 51.08 63.41 111.10 54.95 65.98 113.38 North West 51.51 64.06 110.40 57.43 68.23 112.93 Midlands 51.13 63.57 110.33 55.45 66.95 113.48 South East 51.90 63.68 109.88 57.22 66.87 112.88 South West 51.03 63.40 109.92 55.70 67.13 112.98 Northern Ireland 51.34 63.97 111.16 54.54 68.08 115.25 Republic of Ireland 69.81 75.37 114.72 80.02 85.14 118.38

The price totem fi gures are compiled from the results of a telephone survey of distributors carried out on 07/10/2013 Buying prices are ex-rack. Selling prices are for 1000 litres of kero, 2500 litres of gas oil and 5000 litres of ULSD (Derv in ROI). Prices in ROI are in € . The FON Price Totem includes Platts derived market data, supplied courtesy of Platts and BigOil.net. This allows distributors to make a comparison with the average buying prices.

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