Terminal Risk Management of Capital Projects

Terminal Risk Management of Capital Projects & Storage Terminals 

Practically everything we purchase requires the use of oil at some point. Integral to the global manufacturing process, oil and petroleum products require adequate storage and transportation solutions to ensure they are managed safely — which is trickier than it sounds. The logistics system built around this industry is complex, requiring equally complex and strategic planning to get the job done. 

Below is an overview of the importance of risk management when it comes to “Storage Terminals,” a key node in the global process of housing and distributing these volatile chemicals worldwide. 

What are Storage Terminals? 

A storage terminal is an industrial facility that houses multiple tanks for the bulk liquid storage of not only petroleum, oil, and other petrochemical-based products but also agricultural goods, such as olive oil and molasses. And though the average consumer may not give much thought to the distribution and transportation of these liquids, the terminals in which they are stored are an essential part of our global logistics system.  

Every barrel of oil exported or imported into the United States goes through a liquid terminal. Every gallon of gasoline, the chemicals used to make fertilizer, and the bulk olive oil purchased for restaurants and cafeterias spent time in one too. These storage terminals serve as intersections between where these products are coming from and where they are going, transporting millions of tons of liquids across the U.S. on barges, on tankers, through pipelines, and beyond. 

Bulk storage facilities, though, particularly those housing petrochemicals and other flammable liquids, come with inherent operational risks. Search “fire at oil terminal,” and hundreds of results will come up showing just how risky this sector can be, proving the importance of properly managing these operations and terminal facilities. After all, when not properly managed, the resulting damage could devastate your facilities, your employees, your community, and your bottom line. 

Risk Management of Capital Projects

A complex storage and shipping network requires an equally complex and comprehensive planning stage to ensure everything clicks together. Large capital projects are risky, and these major, multi-year, capital-intensive projects put not only these organizations and their investments on the line but also their reputations. Accounting for change and future growth by implementing a master plan is key to the success of these projects, mitigating the need for design reworks and retroactive safety measures further down the line. 

Additionally, thorough and transparent reviews should be in place to ensure potential risks are addressed and accounted for. During the initial planning stages, this looks like a risk analysis. During the project execution stages, this looks like executable plans and periodic reviews. These check-ins through the capital project’s execution help mitigate cost and risk while accounting for new developments. 

The “Management of Change” (MOC) is an additional aspect to consider. MOC is a systematic approach to organizational change which aims to safeguard workers from potential harm during crucial transition periods. In the terminal storage and logistics industry, this could be something as large as a change in leadership to something as routine as a change in product. 

Organizations tend to ignore or rush changes to “get them over with.” In the workplace, the focus is often on getting the job done and not on risk management. But as changes occur to the standard workflow, be they leadership, product, or equipment upgrades, their effects can dramatically impact the environment, lives, and property in these facilities. MOC is beneficial because it forces organizational leaders to take a breath, analyze proposed changes and evaluate the potential risks. This helps to ensure a systematic plan is in place to identify potential hazards and prevent them, if possible. 

Though complex, a comprehensive management plan that addresses hazards, controls, prevention, emergency planning, and employee training can go a long way toward mitigating many of the risks associated with storage terminals. By establishing rigorous inspection and maintenance procedures, training employees in equipment use and incident response, and being prepared for any potential event, your facilities can do much to decrease losses and keep employees and communities safe.  

BakerRisk has the quantitative and qualitative experience to provide a holistic approach to your terminal risk management program. We review terminal safety systems, identify gaps in existing processes, and develop new ones along the way. Contact BakerRisk today to save your organization time and money throughout your project’s lifecycle.