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Terminal automation no longer optional
September 2010, System Integration & Control Systems Design

Due to increasing market, competitive, regulatory, and social pressures, terminal automation is more important today than ever before. Nevertheless, many smaller petroleum product terminals continue to operate with a relatively low level of automation and many larger terminals operate with outdated, poorly supported automation technology and/or a hodgepodge of disconnected systems. Due to the recent flood of mergers and acquisitions, many multiterminal owner-operators also find themselves with different systems (or, at best, different versions of the same systems) installed in their various terminals. This can make it difficult to coordinate activities, obtain the required information, avoid incidents, train operators, and support the systems. All in all, it is not a pretty picture.

The good news is that existing specialist suppliers in the terminal automation system (TAS) space have been continually enhancing their hardware and software offerings to make them more functional, flexible, interoperable, and easy to use. Terminal management systems (TMS) are also available to extend the capabilities of terminal automation systems to help optimise the supply chain and provide more effective tools for real-time decision support (relative to allocations management, credit management, product pricing, etc.) Several prominent, full-line automation suppliers have also effectively leveraged their general automation expertise and wide-ranging portfolios (including some well-targeted acquisitions) to develop comprehensive terminal automation solutions with compelling value propositions. Most suppliers to this market can point to a successful track record of projects and a fairly long list of customer reference sites. Almost all claim to be able to work well with SAP, Oracle/JD Edwards, and other back office ERP systems used within the oil and gas and chemicals industries. Several even have certified interfaces.

Selecting the right terminal automation solution

So, as an owner/operator, how do you go about selecting the right automation solution for your terminal or terminals? Should you stick with your current supplier(s) (if any) or look elsewhere? Should you partner with the same full-line automation supplier that might be providing measurement and control systems elsewhere within your parent organisation, or work with a specialist in this area? What are the characteristics and functionalities of the many different offerings within this space, and how do you map these against your specific terminal requirements? These are just some of the questions ARC attempts to answer in the latest in a series of client reports on terminal automation systems.

While in the past, a surprisingly large number of petroleum product terminals operated with minimal automation (limited largely to the load racks and some transactional functions); terminal automation is no longer optional. Today’s terminals, large or small, need to accommodate and accurately account for an ever-increasing number of different petroleum and biofuel related products and additives, deal with extreme price volatility, and comply with stringent and ever-changing governmental regulations. Several highly publicised terminal explosions, fires, and spills underscore the need for increased safety to protect people, equipment, property, and the environment. The threat of terrorists or disgruntled employees targeting these relatively vulnerable facilities and ongoing problems with product theft highlight the need for increased security. All this has become extremely difficult, if not impossible, to handle manually or with standalone paper-based systems.

Terminal automation systems becoming increasingly sophisticated

Terminal automation systems themselves are also becoming increasingly sophisticated. Many offer new specialised functionality to enable multiterminal coordination; enable terminal operators and product owners to closely track inventories, ownership, and specific tax status for co-mingled products; meet new biofuels blending and reporting requirements; comply with new homeland security requirements; and meet new tank overfill protection requirements emerging from the Buncefield Commission recommendations.

There are almost as many different definitions for a terminal automation system as there are suppliers to this market. Some suppliers limit their scope to automating and monitoring the load racks. Others focus on monitoring and managing terminal inventories. Others focus more on terminal management and supply chain-related functions than on actual control. Others yet (typically full-scope automation suppliers) aim to automate, integrate, manage, and optimise the entire terminal, from safety and security functions, to product receipt, custody transfer, inventory management, business transactions, pump and valve control, product blending, dispensing, and additive injection.

Since, from the owner/operator’s perspective, all the above functions come into play in the day-to-day operation of a terminal, ARC’s definition of a terminal automation ‘system’ encompasses all terminal monitoring, control, and management functions, plus the interfaces to corporate back office systems. Obviously, in many cases, this will involve integrating multiple terminal subsystems into a common TAS. These subsystems can include safety-related systems, security-related systems, scada systems for pump and valve control, presets and load rack monitoring and control systems, automatic tank gauging systems, inventory management systems, report generation systems, document generation systems, web servers, and so on.

Certainly, not all TAS implementations will involve all of the available TAS functionalities. Instead, owner/operators should apply automation in specific areas where it promises the best return on investment. In some cases, the system will never be expanded beyond this point. However, once they begin to realise and quantify the benefits, most owner/operators decide to expand their systems to increase the scope and degree of automation. ARC recently completed a series of reports on terminal automation systems.

For more information contact Larry O’Brien, ARC Advisory Group, (+1) 781 471 1126,,

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