The International Liquid Terminals Association (ILTA) has released a statement making clear the critical importance of storage during the COVID-19 pandemic. It said its members “continue to work diligently to keep liquid supplies flowing safely at the same time they are working to protect the health and safety of their workers, contractors and partners.”
ILTA President Kathryn Clay said: “Over the past week, the market has been reminded of the critical role played by terminal storage. Nationwide, tank storage at liquid terminals can accommodate over 500 million barrels of crude oil. That’s enough to store all the crude produced in the United States over a 40-day period. That is an enormous amount of storage that, under normal circumstances, provides ample flexibility for pipelines and distributors.”
As COVID-19 continues to affect global trade, it said “recent events have made abundantly clear the importance of the liquid terminal industry to the petroleum supply chain. Terminal storage improves the flexibility of the entire supply chain and its ability to respond to market fluctuations.”
Under normal circumstances storage space is at a surplus even during periods of oversupply or lax demand. But ILTA said recent circumstances have caused a “perfect storm” in increasing the demand for petroleum storage. Not only has gasoline demand fallen off precipitously due to lessened economic activity as a result of COVID-19, but simultaneously, foreign petroleum producers such as Russia and Saudi Arabia are flooding markets with crude oil.
Most liquid storage terminals do not own the crude oil or petroleum products stored on their facilities. Storage is a contracted service offered to those that own and sell the product, such as petroleum producers, distributors or commodity traders. ILTA member companies plan for their facilities’ total storage capacities based on contracts with their customers.
ILTA Chairman Kip Middendorf, (who is also Vice President and Managing Director of Wolf Lakes Terminals), said: “Expanding storage capacity is a lengthy process that varies by the size of tank and permitting jurisdiction. On average, a typical aboveground storage tank in a petroleum product terminal would take at least 12-18 months to permit and construct.”
“Terminal operators are closely attuned to the needs identified by their customers. No one—not even our customers—could have foreseen these extraordinary circumstances, and an unprecedented run on storage is the result. We will continue to work with customers during this extraordinary period to provide safe and quality services.”
For more information visit www.ilta.org