Fuel for the Frozen North Alaskan Fuel Consortium Adds Capacity at Anchorage Airport

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1 Fuel for the Frozen North Alaskan Fuel Consortium Adds Capacity at Anchorage Airport By Grant Smith, PG, Burns & McDonnell; Weston Bennett, Aircraft Service International Group Alaska s Ted Stevens Anchorage International Airport (ANC) is better prepared than ever to support fueling cargo shipments, thanks to a tank expansion project completed in autumn Anchorage is a waypoint on a Great Circle route between the Far East and the American East Coast or Europe. It is well situated to allow cargo flights to refuel, and is usually ranked among the top five airports in the world for cargo throughput. But because the port is not a convenient destination on the way to somewhere else, fuel ships only come on dedicated out-and-back runs. Airlines serving ANC needed facilities to store excess fuel to buffer demand and offset the reduction of jet fuel production in Alaska. A group of 18 airlines serving Anchorage International banded together in 1981 to create the Anchorage Fueling and Service Company (AFSC), a consortium that lets the member airlines manage their fuel expenses more efficiently and cost-effectively. AFSC does not own or purchase fuel; it owns the fuel storage and delivery system and helps keep a sufficient quantity of high-quality fuel ready to meet demand. The airlines purchase their own fuel and store it at the AFSC facilities. AFSC owns two storage facilities, one at the airport and another across town at the Port of Anchorage. The fuel is delivered to the Port of Anchorage facility by pipeline, rail and via waterborne vessels. They are connected via a jet Year Volume in millions of gallons Figure 1: Ted Stevens Anchorage International Airport annual fuel usage in millions of gallons. TECHBriefs 2013 No. 2 4 Burns & McDonnell

2 Any imbalances in the Alaskan fuel supply chain are compounded by geographic isolation and weather extremes. fuel pipeline that transfers the fuel from the Port of Anchorage to the Airport Storage Facility. The facilities had a combined capacity of a little more than 1 million barrels (42 million gallons) of fuel. Aircraft Service International Group (ASIG), a commercial aviation services provider, handles operations and maintenance for the facilities on behalf of AFSC. Challenges Over the past decade, global economic recessions, natural disasters, local refinery issues and declining Alaska North Slope crude oil production have created supply and demand imbalances in the Alaskan fuel market. Most importantly, any imbalances in the fuel supply chain are compounded by the geographic isolation and weather extremes. AFSC began to consider additional fuel storage as a further hedge against supply fluctuations and market volatility. The consortium decided to add four new 100,000-barrel tanks. The port facility lacks room for expansion, so the new tanks would be added at the airport facility, where there was more room to work. The capacity of the tanks was chosen to match the existing tanks at the airport facility and to accommodate a full shipment from a waterborne vessel (approximately 350,000 barrels). The design of the tanks need to account for minimum fill levels dictated from the floating suction system and the excess required capacity for sloshing of fuel inside the tank during a seismic event Anchorage is in an area of high seismic activity. Besides capacity, the other significant challenge was the Alaskan winter. The long months of extreme cold are unsuitable for working in the ground. That meant there was a need for a compressed timetable to get the project out for bidding and construction under way. If construction couldn t begin before the next winter, the project would lose several valuable months and leave supply levels in a potentially vulnerable state. Burns & McDonnell 5 TECHBriefs 2013 No. 2

3 The project was completed in September 2012, just 18 months after the team began drafting designs. Bridging Documents AFSC selected Burns & McDonnell in March 2011 as its owner s representative, and Burns & McDonnell began developing bridging documents to prepare the way for designbuild bids. Bridging documents are a method in which many elements of the design are developed partially some elements much further than others before the project is put up for bidding. This method gives the owner added input into design by specifying certain elements in the request for proposal, while maintaining much of the cost certainty and condensed schedule that come with the designbuild model. The bridging documents were prepared on an aggressive schedule in an effort to minimize the impact of weather. They were developed in just two months (typically this would be a minimum of six months for a project of this size) so the bidding could take place in late spring Burns & McDonnell then vetted proposals and helped AFSC select the design-build contractor. The contractor was able to hit the ground running and pour foundations for the new tanks in the months before the Alaskan winter. Work that could be performed above ground, such as steel tank erection and pipe fabrication, proceeded during the winter months. Right On-Site Burns & McDonnell was able to provide extra value to the project by having a full-time, on-site owner s representative in Anchorage throughout the project. Although AFSC was initially skeptical about that expense, the decision paid for itself quickly. The design-build contractor came through early in the project with a modification from the bridging documents when it found a more cost-effective way to improve the layout of the new tanks. That was good news but not the end of the story. The on-site owner s representative reviewed the modifications and identified Grant Smith, PG, is director of aviation services at Burns & McDonnell. He earned his bachelor s and master s degrees in geology at the University of Iowa. For more information, please gsmith@burnsmcd.com. TECHBriefs 2013 No. 2 6 Burns & McDonnell

4 several other elements that could be reduced or compressed based on the new configuration which supported significant cost savings. This was a perfect example of the advantage of having an on-site owner s representative working with all parties to add significant value for the owner. The Burns & McDonnell on-site representative continued to monitor project progress, working with ASIG to review submittals, process change orders and look out for the best interests of the fuel consortium, both financially and technically. Additional Features Although the four new tanks were the most prominent feature of AFSC s expansion project, three other key elements were implemented: The Fuel Transfer Project added a pump and associated piping at the port facility, alleviating a bottleneck and improving ASIG s ability to move fuel more quickly from the Port of Anchorage facility to the airport facility through the crosstown pipeline. The Additional Filtration Project addressed throughput capacity concerns by installing a fifth filter train at the airport facility. This also will allow more flexibility for ASIG to perform maintenance on filter trains in the future. The Pump Back Project enables ASIG to transfer fuel between tanks at the airport fuel facility and potentially send fuel back through a supply line from the airport to the supplier, something they could not do previously. The pump back capability to the supplier allows ASIG to return fuel that does not meet fuel quality objectives and places the burden on the supplier to clean the fuel rather than ASIG trying to filter at the airport facility. ASIG, Burns & McDonnell and the designbuilder continued to work together on all fronts, and the whirlwind project was completed in September 2012, just 18 months after the team began drafting designs. Among the most remarkable results of the project was the budget certainty that resulted from the bridging documents approach. Weston Bennett is facility manager, ANC, for Aircraft Service International Group, based at Ted Stevens Anchorage International Airport. The ASIG storage tanks can hold more than 42 million gallons of fuel. Burns & McDonnell 7 TECHBriefs 2013 No. 2

5 TECHBriefs Burns & McDonnell 9400 Ward Parkway Kansas City, MO ADDRESS SERVICE REQUESTED 2013 No. 2 Annual Energy Outlook 2013 Early Release Insights Fuel for the Frozen North Thanks to developing partial plans through the bridging documents and carefully defining the project scope, the final overall project cost came in within one-half of 1 percent of the original price, even after change orders. That is extraordinary accuracy using documents developed in just two months at the start of the expansion project. The fuel consortium s facilities are now capable of holding approximately 61 million gallons of jet fuel. That added capacity is vital: daily cargo throughput currently uses anywhere from 1.3 million to 3.5 million gallons of fuel. The extra capacity will help the member airlines better deal with fluctuations in fuel production and market volatility while they keep cargo moving through Anchorage. Note: This article originally appeared in the Summer 2013 issue of Storage Terminals Magazine. Engineering, Architecture, Construction, Environmental and Consulting Solutions