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Perspective

Vapor Cloud Explosion Modeling - Estimated Maximum Loss of Tank Farms

October 05, 2016| By Seong Wook Kim | Property | English

On 11 December 2005, a massive explosion measuring 2.4 on the Richter scale at the Buncefield Oil Storage Depot in the UK destroyed 23 large fuel storage tanks and burned for five days. The incident is regarded as the largest explosion in Europe since the Second World War and serves as a valuable reminder to insureds of large fuel tank farms.1 This serves as a cautionary tale when purchasing insurance based on the so-called Estimated Maximum Loss (EML), usually considered the largest potential loss of a risk.

Let’s say there is a gasoline tank farm with more than 20 large tanks in various sizes. Concrete retaining walls are provided with each containing three to five tanks. In your mind, what would be the tank farm’s largest potential loss amount or EML? What kind of loss scenario could generate the EML?

At a refinery or petrochemical plant, tank farms storing hydrocarbons - such as propane, propylene, butane or butylene - are not normally considered the most hazardous risk. Chemical reactions typically occur under the extreme high pressure and temperature of the processing areas, whereas a vapor cloud explosion (VCE) occurs when the release of a large volume of flammable gas or vapor mixes with air and finds its ignition source in a confined or congested location. Compared to processing areas, where a dizzying array of pipelines connect columns and vessels containing hydrocarbons, there is generous spacing between fuel tanks on tank farms in order to avoid precisely that confinement or congestion, and to render the fuel tanks less hazardous.

However, as the Buncefield Oil Storage explosion proved, the reality can be quite different. Here are some of the key findings of the investigation by the Steel Construction Institute (SCI) in the wake of that explosion. 2

  • An atmospheric storage tank overfill in still conditions can result in the development of a large shallow vapor cloud. For a gasoline tank like the one involved at Buncefield, the vapor cloud radius reaches 100 meters after five minutes and 200 meters after about 20 minutes.
  • When an unconfined vapor cloud is ignited, the presence of vegetation (a hedge and a row of trees) accelerates the flame. The flame either settles to a steady speed or goes through a transition from deflagration-to-detonation (which is what happened in the Buncefield Oil Storage Depot), depending on the characteristics of the vegetation.
  • A detonation can propagate through relatively thin (<200mm) detonable layers of vapor cloud, and once initiated the remaining vapor cloud will most likely detonate.


One might argue that the Buncefield explosion was an extremely low probability occurrence, the result of multiple adverse conditions, including the mechanical failure of a high-level alarm, low wind, long leakage time and nearby vegetation. Unfortunately, two very similar low probability cases occurred in October 2009, one in Puerto Rico and the other in Jaipur, India. Both cases involved a very large shallow gas cloud and a severe explosion causing damage over an area extending several kilometers.

The lesson is that low probability incidents happen more frequently than we’d like, and when they occur, they have the potential to blow up your EMLs.

In Gen Re we have a team of experienced underwriters dedicated to the Oil & Gas industry. As a direct and non-proportional reinsurer, our underwriting experience can help you transfer the low probability exposure in a cost efficient manner.

For an in-depth look at this loss and the lessons learned from it, you might be interested in an article we published in early 2006, just after it occurred.

 

Endnotes
  1. W. Atherton and J.W. Ash. Review of Failures, Causes & Consequences in the Bulk Storage Industry.
  2. The Steel Construction Institute. Dispersion & Explosion Characteristics of Large Vapour Clouds Volume 1.

 

 

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