copyright: sipc shell norco… a great place to work 9/9/2015 file title norco chemicals tank...
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Shell Norco… A Great Place to Work
NORCO CHEMICALS TANK STRATEGY
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Shell Norco… A Great Place to Work
BACKGROUND – SCOPE & PHASING
• Chemicals has 41 hydrocarbon (i.e. excludes slop, caustic, additive or process water storage) tanks/spheres/bullets (TSBs) on the “active” register
• With the advent of a light feed strategy, we anticipate that our end state will have us at 27 TSBs on the “active” register, or a reduction of 34%
• Areas for reduction include light liquid feed storage (10 to 3), aromatics storage (5 to 2) and LPG storage (13 to 10)
• There will be three discrete windows that storage assets will be shed (either sold, leased, idled or demolished) from our register – the intent is to front load this plan with the largest assets
– Phase 1 – by year end 2009 (X6: F-433, F-498, F-499, F-500, F-501, H-433)
– Phase 2 – by August 2010 (X5: F-483, F-494, F-503, F-509, S-404)
– Phase 3 – by December 2010 (X3: PV-497, PV-498, PV-499)
– Three (out of 5) West Site butylene spheres will also be shed, by the middle of 2010
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Shell Norco… A Great Place to Work
DIRECT IMPACTS ON TANK FARM
• Routine maintenance, reactive maintenance spend should fall
• Inspections planned for 2010/2011 that can be deferred indefinitely (until and unless the storage tank in question is justifiably reinstated or sold/leased to another party):
2010: F-494 (1.5 M$), F-499 (2.3 M$), S-404 (0.3 M$)
2011: F-498 (2.3 M$)
• CAPEX spend for the 14 tanks to be shed should be halted, until and unless the storage tank in question is sold/leased to another party – capital scope changes to Logistics Infrastructure Upgrade project, CUUSA?
• Total active tank counts drop from 113 to 101, of which Shell Chemical tank counts drop from 41 (36%) to 27 (27%) – a 11% drop in overall assets managed = ? FTE reductions
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Shell Norco… A Great Place to Work
OTHER RELATED IMPACTS
• Wharf
– Careful data-based analysis of Chemicals’ future usage of the wharf should commence shortly – as liquid feedstock shipments should drop correspondingly with liquid feed tank rationalization
– Py gas production should also drop as feed diets at GO-1/OL-5 are lightened – less py gas barges to move
– BD-5 will be running at minimum rates – may see an uptick in crude and finished BD imports, offset by lower finished BD exports
• LPG rack
– Enterprise has expressed interest in buying the rack, but certain CAPEX provisions are necessary to accomplish turnover
• Rail rack
– In the future, will only be for finished BD sales to local customers + butylene shipments out