PDV America, Inc. and Subsidiaries - Page 7

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          and have a thickened edge or reinforced concrete piles on the               
          edge to help bear the weight of the tank.                                   
          C.  Tank Construction                                                       
               When a terminal requires the addition of new tanks,                    
          management personnel at the terminal first prepare an                       
          authorization for expenditure (AFE).  After approval of the AFE,            
          CITGO submits requests for bids from tank builders, reviews the             
          bids, and awards a contract.  CITGO’s contracts require that the            
          tank’s design and construction comply with the American Petroleum           
          Institute Standard 650, Welded Steel Tanks for Oil Storage (API             
          Standard 650).  The contractor then prepares drawings according             
          to the contract specifications and fabricates the various tank              
               Once the tank foundation is built, the contractor sets and             
          welds together the tank floor.  Then, the contractor welds the              
          steel plate tank shell rings from the floor up to the top ring.             
          At this point, the contractor installs any necessary roof support           
          columns, girders, or rafters and any internal mechanisms, such as           
          an internal floating roof.  Finally, after welding the roof                 
          plating together, the contractor installs ladders or other                  
          accessories and paints the tank.                                            
               The cost of constructing a new tank is between $10 and $12             
          per barrel of capacity.  Tank construction crews usually consist            
          of 8 to 12 workers, who build the tank structure in 5 to 6 weeks.           

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Last modified: May 25, 2011