MIDSTREAM – Licenses to Operate
9/21/2020
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published by
Tuan Tran
Senior Project Manager

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My career has included various roles at the Vopak and Kinder Morgan terminals over the past +20 years. As someone who has worked on both sides of the coin, I ended up having “lightbulb” moments about a variety of things but one, often forgotten, project aspect really stuck with me. This piece is one that I truly believe can make or break a project. What is it, you ask? One word. Permitting.

After working for these Owner/Operator companies for almost 2 decades, I realized that their focus is on much more than just storage tanks and logistics. The real service these midstream terminal companies provide their clients is the GUARANTEE that their products are stored, handled, and transferred meeting regulatory permit requirements. Put in place by state and federal agencies, the key permits they must maintain are air and water operating permits which are considered ‘licenses to operate’.

Even though permitting is usually the responsibility of the client company, as a Project Manager it is still something I consciously think about throughout the entire project lifecycle. It is important to always know what is required for a project. By knowing the ends and outs, you will be able to assist the client in the process if needed. Keeping things like this in mind from the get go can keep the project moving forward in the right direction.

How do air and water permits affect a project?  Risks?

Air permit related projects correspond to the control of emissions generated from the transfer of product into tanks, vessels, trucks, and railcars.  Depending on the type of product and regulatory requirements under the EPA’s Clean Air Act (CAA), emissions can be controlled by using internal/external floating roofs (for tanks) for flammables, vapor scrubbing for acids/caustics, balancing, combustion, and/or carbon adsorption.

Storm-water related projects correspond to the control of rain water from storm events that falls within the terminal that must be managed prior to discharge into local waterways.  Projects relating to storm-water drainage systems, lift station upgrades, storm-water storage tanks or pond maintenance, biological waste water treatment system upgrades, etc. must be budgeted into the project to remain compliant with EPA’s National Pollutant Discharge Elimination System (NPDES) permits.

During one of my past experiences I was able to impart guidance relating to storm-water management for a Canadian project.  The client requested to expand tank storage in the only available space, one that would affect an adjacent storm-water collection pond system. After voicing my concerns, the engineering of the new tanks’ footprint was evaluated to avoid disturbance of the storm-water drainage, lift stations, and piping to treatment systems.  The risk of project failure would have been very high if the storm-water system was not considered.

The influence and risks associated with proper permitting can vary drastically. During the project evaluation stage make sure to understand the air and water permits of the local terminal as they may cause potential issues. Understanding and pointing out these ‘licenses to operate’ permit risks are critical in the early stage of project development. Such risks may add unexpected costs which could make the project less financially viable.

About the Author
Tuan has 24 years of industrial engineering experience in operations and project settings. Responsibilities include project management oversight with clients from obtaining functional requirements to scoping, estimating, design, construction, and final commissioning. Experience includes Kinder Morgan’s Major Project Development team, 16+ years with Vopak in various roles from terminal manager to logistics manager, and Engineer Project Manager for Vopak’s two Gulf Coast, TX terminals. Tuan started his work career with Mosaic for +4 years as a Production/Maintenance supervisor in the phosphoric/sulfuric acid production facilities in Tampa, FL. Most recent experience includes project management at Targa in the construction of a brine storage pond, brine disposal wells, and a water well to supply freshwater to fractionation plants.
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