Replies to post #106084 on MMEX Resources Corp (MMEX)

[jmjjw]

The two crude storage tanks (T-50, T-51) that MMEX had permitted are 95-foot diameter, 75,000 bbl. floating roof storage tanks.

The actual costs vary widely in the industry, based on the exact type of construction (shop fab, field welded, hybrid), the choice of steel (U.S. vs. import) coating, dike height, etc.). A common average is $25/bbl for new construction, so a 75,000 bbl tank would run about $1.875-million for just the tank, including foundation, stairs/ladders, stiles, vents, run-off control, controls, and directly related appurtenances.

The piping, racking, transfer pumps, etc. are all extra.

Used tankage is possible - again, costs depend on the source tank, its distance from the site (transport), and the construction of the tank - a hybrid, that was partially shop-welded in sections, and bolted in the field can be disassembled and transported, but still requires new foundations, dikes, etc. Crude tanks, especially those used to store high-API stock pretty much have to be floating roof for vapor control - a used tank of this type leads to all kinds of problems, and only a moron would go that route because of the operational and safety problems that would result.

[jmjjw]

Another less obvious issue in the notion of MMEX’s “Crude RSD business,” and the nature of the storage tanks, etc. relate to emissions and permitting issues.

A storage facility requires an emissions permit - the size, and nature of the facility determines whether, or not the facility can use the TCEQ PBR process (administrative), or requires TCEQ/USEPA NSR.

The present TCEQ Type O permit would allow operation of two 75,000 bbl. floating roof storage tanks, specifically, and strictly as applied for in the original permit application.

Used tankage would not comply with the permit. Additional tankage would not comply with the permit. So MMEX has already confined itself to two, and only two 75,000 bbl. new floating roof tanks, exactly as described in the permit application.

There are all kinds of problems associated with bulk tanks that exceed TX-DOT transport format (length, width, height, weight), and how those tanks get erected in the field. There are trade-offs associated with tank design and construction, projected lifetime, lifecycle cost, etc.

Real crude terminals (look at Cushing as a representative example, or the PADD III coastal storage and terminal units) rely on scale for economy and reducing cost/bbl. of storage. The units MMEX has proposed as small - in relative terms, a 95-foot diameter, 75K bbl. storage tank is tiny.

The notion that MMEX would procure used storage tanks, populate its currently owned parcel, let alone adjacent land, even though the landowner is ostensibly “friendly” (remember, he got paid with warrants on nearly worthless MMEX shares) is ludicrous. There is a permitting issue for emissions. There is a water permitting issue that MMEX has completely missed, along with all kinds of land-use issues. Used tanks, scavenged from some other operation pose huge problems - leaks, both liquid and vapor, water contamination, corrosion, etc.

New construction is problematic too - the $25/bbl average is just that - an average - that figure can easily double, or triple, depending on a variety of factors, like schedule acceleration, materials costs, labor costs - the most recent high I’ve seen was $82/bbl. That would put an MMEX storage tank at $6.15-million for just the tank.