Thursday, October 10, 2019

Drone Attacks Sharpen the Minds at Petrochemical Exhibition and Conference

Demand for Fuel Likely to Drop as Overcapacity Kicks In
Shipping News Feature

SINGAPORE – The events a few days previously when drone strikes knocked out half of Saudi Arabia's oil supply meant that this year's Tank Storage Asia was very focused on geopolitical tensions and volatile market conditions. The two day event saw record visitor numbers, a 35% jump as against the previous event.

Over 50 exhibitors were present on the show floor, with many new names appearing for 2019 with the two day conference programme featuring speakers from key terminals in the region discussing crucial topics ranging from new sustainability initiatives and innovations to first-hand experiences on implementing new safety case regulations.

Edwin Ebrahimi, Innovation Engagement Leader at Vopak spoke about the significant shift in innovation the terminal has seen in the last five years, from exploring proof of concepts in 2015 to having innovation truly embedded in the company’s culture by 2020. In this time Vopak has explored drones, wireless open and close sensors, digital checklists and remote-operated vehicles. He explained:

”We don’t innovate for the sake of it, first and foremost, we introduce new technology to create a safer environment at our terminals. The industry has a joint responsibility to continue improving its safety performance. Sharing stories of successful deployments of innovations at events such as Tank Storage Asia helps raise awareness and speeds up the acceptance of innovation in our industry.”

Innovation and forward-thinking were indeed key themes throughout the event, with Mark Stuart, the conference keynote speaker, giving a presentation on how the tank storage industry can move into the digital age. Stuart asked the audience for their input on what is most important when it comes to driving the tank storage sector forward, and responses included the use of drones as well as ensuring companies ‘fail fast’ when it comes to testing out new initiatives. He emphasised data being the next big commodity, saying that companies need to invest in data and have a comprehensive data strategy to ensure results.

Paul Hickin, Associate Director at S&P Global Platts spoke of the fragile balance between supply & demand in today’s marketplace. Oil demand worries continue in the wake of the global slowdown and the recession risk is now at 35%, Hickin explained. However, IMO2020 could provide a demand spike and oil demand growth could remain above 1 million barrels per day in 2019 and 2020. Platts predict that oil prices are likely to break out of the $55-$65/barrel range, more likely testing the high of $70/barrel, if not up to $80/barrel. However, longer-term prices will head back to an average of around $55/barrel.

Sushant Gupta, Director of Asia-Pacific Refining at Wood Mackenzie echoed this, adding that product imbalances and changes to trade flows represent significant new opportunities for storage operators. Gupta also spoke of the significant slowdown in oil demand growth, with current world demand growth at its slowest level for the past 10 years. Added to this, demand for gasoline is also expected to slow post-2030, as a result of higher penetration of electric vehicles & better fuel efficiency. Overbuilding of refineries has created further imbalances, with around 3 million barrels per day of surplus capacity expected over the next 5 years.

Tank Storage Asia 2019 introduced TSA Connect, a one-to-one networking platform, which the organisers say proved a huge success with exhibitors and visitors alike. Over 1550 meeting requests were submitted through the networking platform in the lead-up to the event. After a successful show, planning has already started on next year’s event, which will be held on 7 & 8 October at the Marina Bay Sands in Singapore.

Photo: The night sky over the Aramco oil refinery in Saudi Arabia is filled with smoke and flames after the drone attack on September 14.