Petroleum Production, Bulk Storage and Mitigating Risk

Petroleum Production, Bulk Storage and Mitigating Risk

Petroleum products are processed from crude oil and other liquids made from fossil fuels and are used by people for a variety of things.

Biofuels are utilized similarly to petroleum products, most commonly in blends with gasoline and diesel.

The main significant energy source for Pakistan’s yearly total energy consumption has historically been petroleum. Petroleum-based products are used to power cars, heat buildings, and generate energy. Plastics, polyurethane, solvents, and countless more intermediate and finished commodities are produced by the petrochemical industry, which is a part of the industrial sector.

Pakistan has 19 million tons (MT) annual demand for petroleum products, although it meets roughly half of that need through local crude production and refinery processing of imported crude. Transportation, energy, and industry are the three major users that rely on petroleum products. Petroleum products are used for transportation 59%, power 32%, and industry 8%. Due to their commercial links and the ability to delay payments, Pakistan frequently purchases from Saudia, Qatar & Gulf Countries, although now purchase from Russia is in files, too. 

Another issue in Pakistan is the low production capacity of the refineries, which significantly affects the country’s oil exports. Almost 50-40 % of the total capacity is being utilized by all refineries. By building new oil refineries and increasing the capacity of the ones that already exist, Pakistan may enhance its exports.

By providing incentives to investors and reducing the existing high tariffs on refining equipment, this process may be sped up. In Pakistan, there are five refineries that are in operation: Pak Arab Refinery Limited (MCR), Attock Refinery Limited (ARL), Byco Petroleum Pakistan Ltd (Byco), National Refinery Limited (NRL), and Pakistan Refinery Limited (PRL). These refineries have an approximate 19.37 million tons capacity overall. Domestic refineries generate around 11.59 MT, importing the remaining amount (8.09 million tons).

Because of this, some refineries are only operating at 40% of their actual capacity. It is worth mentioning that due to the superior profit margins enjoyed by existing refineries that use hydrocracking technology, the most recent deep conversion plant is unable to compete. If hydrocracking petroleum refineries are permitted in Pakistan, the technique is abandoned internationally and Pakistan may face several consequences.

It is important to keep in mind that oil is highly combustible and that caution must be exercised while keeping flammable liquids in storage, especially. The Dangerous Substances and Explosive Atmospheres Regulations 2002 (DSEAR) are in place to prevent a fire or explosion at work and define a flammable liquid as one with a flashpoint of 60°C.

Regardless of the quantity of oil stored, a risk assessment is required under DSEAR to determine whether existing control measures are sufficient to manage the risk of fire or explosion or whether additional controls or precautions are necessary.

In addition to day-to-day activities in the laboratory, it is necessary to assess non-routine activities, such as maintenance work where there is often a higher potential for fire and explosion incidents to occur.

The Health and Safety Executive (HSE) guidance notes that often fires or explosions occur when vapours or liquids are released from a controlled environment to areas where there may be an ignition source, with incidents commonly arising during transfer operations including movement from storage facilities within premises and dealing with spillages. Even the most proactive safety program cannot cover every exposure. The spill and emergency planning should include steps for responding to every potential hazard.

The inspection and maintenance processes are the first line of defence in preventing equipment condition-related accidents. How often to inspect depends on the age and condition of the equipment, as well as the potential threat to life and property should a leak or sudden release occur. Any defects should be addressed immediately.

Both visual and nondestructive testing of equipment can assess the integrity of the tanks and other equipment. Older equipment should be inspected more frequently and rigorously. Inspect tank exteriors and interiors for structural integrity. Use a detailed recordkeeping system that includes useful life forecasts to stay ahead of any potential issues.

Any equipment with a predictable lifespan should be replaced according to the manufacturer’s recommendations. Regular preventative maintenance should be done on a strict schedule, including lubricating mechanicals and checking valves, gaskets, and hoses for signs of degradation.

Chart corrosion rates for metal parts, and replace them when they reach a predetermined level. Keep oil/water separators maintained to ensure the ability to treat contaminated stormwater and help contain and prevent releases to the environment.

Bulk petroleum storage facilities come with inherent operational risks. If your operations are not properly managed, the result could be devastating to your facilities, your employees, your community, and your bottom line.

Fortunately, a comprehensive management plan that addresses hazards, controls, prevention, emergency planning, and employee training can go a long way toward mitigating many of these risks.

By establishing rigorous inspection and maintenance procedures, training employees in equipment use and incident response, and being prepared for any potential event, the storage facilities can do much to decrease losses and keep employees and communities safe.

To avoid any serious risk or to prevent any disaster, OGRA should ensure strict compliance with the safety standards for all storage belonging to various Oil Marketing Companies (OMCs).

Proper 3rd Party Safety Inspection should be ensured and no favouritism or inclination should be shown by OGRA towards any particular OMC. All such depots that are non-compliant with safety standards,  should immediately be sized to operate and should allow operating only after proper 3rd Party Inspection.

Further to strengthen safety importance & compliance, all retail outlets allowed on the basis of non-safety compliant depots should immediately be seized.