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This article appeared in a journal published by Elsevier. The attachedcopy is furnished to the author for internal non-commercial researchand education use, including for instruction at the authors institution

and sharing with colleagues.

Other uses, including reproduction and distribution, or selling orlicensing copies, or posting to personal, institutional or third party

websites are prohibited.

In most cases authors are permitted to post their version of thearticle (e.g. in Word or Tex form) to their personal website orinstitutional repository. Authors requiring further information

regarding Elsevier’s archiving and manuscript policies areencouraged to visit:

http://www.elsevier.com/copyright

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A structured approach to improved condition monitoring

I.B. Utne a,*, T. Brurok b, H. Rødseth b

aNorwegian University of Science and Technology (NTNU), Department of Marine Technology, NO 7491 Trondheim, NorwaybMARINTEK, NO 7450 Trondheim, Norway

a r t i c l e i n f o

Article history:Received 26 October 2011Received in revised form8 December 2011Accepted 9 December 2011

Keywords:Condition monitoringOperationMaintenanceProcess safetyHeat exchangersLife cycle costs

a b s t r a c t

Improved condition monitoring of production equipment enhances process safety and the ability toprepare maintenance, to perform maintenance efficiently, and thus reduce downtime and associatedcosts. Currently, there is a somewhat limited focus on condition monitoring of static equipment, such asheat exchangers and separators. This is due to organizational barriers, available technology, and budgetconstraints at management level. The objective of this article is to present a three-step approach thatsupports the decision-maker in the selection of condition monitoring methods for production equip-ment. The approach is exemplified by a heat exchanger and the focus is on condition monitoring in theoperational phase, including assessment of life cycle costs (LCC).

� 2011 Elsevier Ltd. All rights reserved.

1. Introduction

Many of the oil and gas fields on the Norwegian ContinentalShelf (NCS) have been operated for several years. Due to changes inoperational and reservoir conditions the production equipmentbecomes exposed to morewear and tear (Ramirez & Utne, 2011). Toensure process safety, degradation of the equipment has to bemonitored and controlled.

Internal leakages in valves and pressure vessels, for example, arerecurring challenges. Hydrocarbons released downstream anemergency shutdown valve and external leakage from a pressurevessel may ignite and lead to explosions and fire. Therefore, it isimportant to perform condition monitoring, such as function testsof valves to determine whether there are internal leakages risingabove the leakage acceptance criteria for the specific valves.Mechanical integrity of pressure vessels, in particular with respectto the containment function, involves use of visual inspections orwith specialized tools, such as ultrasound and radiography. Theimportance of including inspections and other types of preventivemaintenance in a mechanical integrity program for safety equip-ment is emphasized by Summer (2009).

When considering major accidents at chemical plants,mechanical failure is an important contributing cause, due toincorrect maintenance programs (Kim, Kim, Lee, Lim, &Moo, 2009).

Luo (2010) identified and ranked violations of the process safetymanagement (PSM) standard based on inspection citations fromthe U.S. Occupational Safety and Health Administration (OSHA) androot causes to major accidents identified by the Chemical Safetyand Hazard Investigation Board (CSB). Among these violations,mechanical integrity (MI) was most frequently cited.

The safety philosophy known as “defence in depth” is based onapplication of multiple protection layers, including use of safetyintegrated systems (SIS) (Markowski & Sam Mannan, 2010). Thepurpose of SIS is among other things to detect the onset hazardousevents (Lundteigen & Rausand, 2007). In particular, diagnostictesting, function testing, and visual inspections are importantcondition monitoring methods to detect deviations, degradationsand failures of the SIS. In the future it is expected to use moreautomated function testing. According to Pitblado (2011), futureimprovements in process safety includes a holistic integration ofseveral activities at different levels of detail.

In general, condition monitoring of static process equipment,such as separators and heat exchangers, contributes to: (i) processsafety and occupational safety, and (ii) reduced operational costs.Static equipment is critical in process plants, is challenging tomaintain, and is associated with costly and time consuming shut-downs (Lieberman & Lieberman, 2008). Being able to monitor anddetect degrading conditions of static equipment improves theability to prepare for necessary maintenance, to perform mainte-nance more efficiently, and as such, reduce downtime and associ-ated costs. Implementation of non-intrusive condition monitoring

* Corresponding author.E-mail address: [email protected] (I.B. Utne).

Contents lists available at SciVerse ScienceDirect

Journal of Loss Prevention in the Process Industries

journal homepage: www.elsevier .com/locate/ j lp

0950-4230/$ e see front matter � 2011 Elsevier Ltd. All rights reserved.doi:10.1016/j.jlp.2011.12.004

Journal of Loss Prevention in the Process Industries 25 (2012) 478e488

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methods reduces the need for man entry of vessels. A prerequisiteis that the condition monitoring methods provide reliable data, forexample, to avoid false alarms that impact the same businessobjectives negatively (i.e., costs and HSE).

The potential for improved condition monitoring of staticprocess equipment is large, but the current focus is limited, due toseveral reasons: New technology must be qualified and reliablebefore anyone is willing to use it. Management has to see thebenefit of implementing condition monitoring and needs toconsider condition monitoring and maintenance as quality assur-ance of production and production equipment. Traditionally, thereis an overriding focus on production and cost cutting concerningmaintenance and condition monitoring, because of budgetconstraints and too short time horizons at management level (Utne,Brurok, & Larsen, 2011).

To overcome some of the above-mentioned challenges, theobjective of this article is to present an approach that guides theuser in the selection of condition monitoring methods forproduction equipment. To exemplify the approach, the articlefocuses on heat exchangers, and shell-and-tube-heat exchangers, inparticular. Activities that should be performed in the assessment oflife cycle costs (LCC) for different conditionmonitoringmethods arediscussed. The approach aims at assisting operators and contractorsin selecting the optimum condition monitoring methods for theirequipment, in accordance with overall business objectives of safetyperformance and production efficiency.

Several articles address the costebenefit of condition moni-toring methods (e.g. Garetti & Centrone, 2009; McMillan & Ault,2007), and decision models have been established for, e.g., windturbines (Besnard, Nilsson, & Bertling 2010; Van Oystaeyen, VanHorenbeek, Pintelon, & Duflou, 2011). In general, the focus is onlife cycle cost (LCC) models based on reliability analysis, conditionmonitoring parameters, and a cost breakdown structure. Thesearticles all consist of important key elements in order to makea decision for evaluating condition monitoring. A limitation is,however, that the decision-making is more focused on a mainte-nance policy level, i.e., evaluating whether or not condition moni-toring should replace time-based preventive maintenance. Ferreira,de Almeida, and Cavalcante (2009) has also established decisionmodels based onmulti-attribute utility theory. Although this articleevaluates both costs and downtime, it is limited to only evaluatingcondition monitoring methods with inspection intervals.

The International Atomic Energy Agency (Hess, Biter, &Hollingsworth, 2001; IAEA, 2007) provide decision support forselecting condition monitoring methods. IAEA (2007) has estab-lished a communication method used to educate and explainprocesses in condition-based maintenance (CBM). The choice ofmethods should be based on fulfilment of all relevant needs andrequirements, and each method is evaluated individually. Thelimitation of this document is lack of further comparison betweenthe different condition monitoring methods. Hess et al. (2001)however, elaborates more in detail about how to evaluate thedifferent condition monitoring methods based on a semi-quantitative method. First, a qualitative approach is performedfor both rating the expected benefit and cost of application. Second,a more quantitative approach is performed where return oninvestment (ROI) is calculated. The limitation of the semi-quantitative method is found in the qualitative approach wherethe expected benefit is not based on production and safety condi-tions for the relevant equipment. In addition, the rating scale islarge, ranging from 0 to 100, and there is only a qualitativedistinction between benefit and costs.

Inspection, condition monitoring, process monitoring, perfor-mance monitoring, instrumentation are terms often used aboutequipment condition. Sometimes they are applied separately and

sometimes as part of conditionmonitoring. Thus, there is a need forclarification of the term “condition monitoring”. In this article, thedefinition fromDelves (2007) is used: “Continuous or periodic tests,inspections, measurements or trending of the performance orphysical characteristics of structures, systems, and components toindicate current or future performance and the potential for failure”.

The article is structured as follows: First, the decision model isintroduced. Then the analysis and mapping focussing on the tech-nical features of various condition monitoring methods areexplained. Last, the cost assessments are discussed, before theconclusions are stated. The work described in this article is carriedout in the Centre for Integrated Operations in the PetroleumIndustry (IO Centre, 2011).

2. A decision support model for condition monitoringmethods

In general, continuous improvement of CBM is necessary due toplant experience, industry experience, and new and betterpredictive technology evolving (IAEA, 2007). Condition monitoringis an integral part of CBM and is therefore an essential part of thecontinuous improvement process (Hutton, 1996). When the mainfocus is on implementing new and/or improved condition moni-toring it is necessary to investigate several aspects, such as failureand maintenance experience, root causes of recurring problems,and the costs and benefits of implementing changes.

Fig. 1 shows a flow diagram which illustrates the assessmentprocess proposed in this article. The process can be divided intothree main steps:

1. Step 1: Analysis and selection of critical equipment (Section 3)� Perform Failure Mode, Effect, and Criticality Analysis(FMECA) and Root Cause Analysis (RCA).

� Select the critical component(s) or system with respect tosafety and/or production where improved condition moni-toring could be beneficial.

2. Step 2: Analysis andmapping of conditionmonitoringmethods(Section 4)� Evaluate type of condition monitoring activities suitable forthe different levels (level 1 e failure mode, level 2 e failuremechanism, or level 3 e root cause).

� Evaluate feasibility of condition monitoring activities, assesscharacteristics of the relevant condition monitoringmethod(s), and select the most promising method(s).

3. Step 3: Assessment and decision-making (Section 5)� Qualitatively evaluate and rank condition monitoringmethods

B Priority logic based on questionnaire� Quantitatively perform life cycle cost (LCC) analysis forrelevant condition monitoring methods.

B List the different life cycle cost parameters associated witheach phase for the condition monitoring methods.

� Compare the results, including “baseline” (current situa-tion), and select the most beneficial method.

These steps are further described in the next sections.

3. Step 1: analysis and selection of critical equipment

The first step is to analyze the equipment for which new orimproved condition monitoring might be implemented in terms ofpossible failure modes, failure mechanisms, their root causes andcriticalities. Based on such information it is possible to determinethe need for condition monitoring, existing relevant methods, andpossible deficiencies in the current solutions.

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For the purpose of illustrating the approach, a shell-and-tubeheat exchanger is used. A heat exchanger can be defined asa device with the main function of transferring heat between twofluids physically separated by a wall (NS-EN 247, 1997). In prin-ciple, heat exchangers can have a broader definition since heattransfer also can take place between a fluid and a solid material(e.g., in an oven), but the definition above is valid throughout thisarticle.

Heat exchangers exist in a wide range of different types fordifferent applications. They are, for example, used in steam powerplants, chemical processing plants, building heating, air condi-tioning, and mobile power plants, and are often termed according

to which application they are intended. Special terms are employedfor major types (e.g., boiler, steam generator, condenser, radiator,cooler, heater) (Fraas, 1989).

Fig. 2 illustrates a single-pass tube, baffled single-pass shell,shell-and-tube heat exchanger designed to give essentially counterflow conditions. This type of heat exchanger is the most commonlyused shell-and-tube heat exchanger on offshore oil and gas pro-cessing plants. The tubes in the heat exchanger constitute thebundle. This means that the individual tubes cannot be dismantled,only the bundle as a whole.

An FMECA can be used to identify the failure modes, effects,failure mechanisms, and associated criticalities (see, e.g., Rausand &

Fig. 1. Flow diagram for the decision model (CM means condition monitoring).

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Høyland, 2004). The basis for an FMECA is a functional description,shown in Table 1 for a shell-and-tube heat exchanger.

Table 2 shows failure modes, failure mechanisms, and rootcauses that may affect the bundle of a heat exchanger (Utne &Brurok, 2010) (for definitions of terms, see e.g., DOE, 1992; ISO20815, 2008). Often, FMECAs focus more on failure modes andtheir criticalities than on the causes. Therefore, it may be beneficialto perform root cause analysis of the most critical failure modes.The purpose of root cause analysis is to find out how and why anevent happened in order to prevent recurrence (DOE, 1992; Liker &Meier, 2006). During the investigation of a failure mode, there maybe several causes that can be identified, one leading to another. Incase of a leak from a heat exchanger, the cause may be thatmanagement has not ensured effective maintenance. This cause

may have led to use of improper seal material or missed preventivemaintenance, which again led to the leak. In Table 2, item number 1with failure mode “leakage of tubes” has been selected (due to highcriticality) for further evaluation with respect to condition moni-toring improvements.

4. Step 2: analysis and mapping of condition monitoringmethods

The purpose of the next step is to assess existing conditionmonitoring methods, their applicability and relevance related tothe three levels in Table 2 (failure mode, failure mechanism, androot cause), or to evaluate if new conditionmonitoringmethods arefeasible. Fig. 3 shows the functional relationship and the decisionprocess from installation (plant) level and down to the relevantcomponent level and failure mode where detection by a feasiblecondition monitoring method could be assigned.

There are many different types of condition monitoringmethods, depending on the system and materials involved. Evenfor shell-and-tube heat exchangers, there are many technologiesavailable, but none of them can detect all potential failures, andthey have their advantages and limitations, depending on type andconstruction of the heat exchanger. Condition monitoring of tubes,for example, mainly focuses on metal loss and material defects andis carried out to prevent forced outages and enable plannedreplacement of the bundles.

DNV (2007) and Stone and Perrie (2005) discuss use of non-intrusive inspection (NII) methods on pressure vessels. NII is

Table 1Functional description of heat exchanger parts (Shah & Sekulic, 2003; Utne & Brurok,2010).

Component Functionality/description

Front-end/rear-endheads

- Provide entrance and exit of tube fluid- Provide structural functionality- Ensure containment of tube side fluid

Baffle plates - Support tubes during assembly and operation- Direct fluid in shell at approximately rightangles to tubes for high efficiency

- Increase turbulence of shell fluid andminimize tube-to-tube temperature differenceand thermal stressed due to cross flow

Tube sheets - Generally a round metal plate with holesdrilled through for the desired tube pattern,holes for tie rods, grooves for the gasket, andbolt holes for flanging to the shell

- Support tubes at the ends of the tube bundle- Prevent leakage of shell fluid at the tube sheet

Tubes/tube bundle - Tubes in various shapes and dimensions are used- Contain fluid on tube side- Provide for efficient heat transfer between hotand cold fluid

Body/shell - Provide structural functionality- Provide containment of cooling fluid- Provide efficient heat transfer between hotand cold fluid

Gaskets/seals - Prevent leakageInlets/outlets - Transport fluid in and out of heat exchangerInstrumentation - Instrumentation for temperature, pressure, flow

- Provide start-up, shutdown, regulation of processFlanges and bolts - Connect shell and end heads

- Provide structural functionality (for shell)- Provide holes for connection

Fig. 2. Shell-and-tube heat exchanger, based on Fraas (1989) and Shah and Sekulic (2003).

Table 2Some examples of critical failure modes, mechanisms, and root causes of a bundle ina shell-and-tube heat exchanger.

Number Failure analysis

Component Level 1 Level 2 Level 3

Failure mode Failure mechanism Root cause

1 Bundle Leakage of tubes Corrosion H2S, CO2, MIC2 Bundle Leakage of tubes Fretting Flow induced

vibration3 Bundle Leakage of tubes Material fatigue Design failure4 Bundle Leakage of tubes Material fatigue Flow induced

vibration5 Bundle Leakage of tubes Thermal fatigue Operating error6 Bundle Reduced heat

transferFouling Biological

organisms

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a term often associated with condition monitoring of staticequipment. It is an activity that can be performed without inter-rupting/disturbing the operation, which means that the equipmentcan be operated at 100% capacity. Heat exchangers are insulatedand the methods described in (DNV, 2007) cannot necessarily beused non-intrusively on heat exchangers. There may be someexceptions, such as acoustic emission (AE) monitoring, retrofittingsensors under the insulation for monitoring of crack growth, looseinternal parts, changing flow conditions, and so on (see DNV (2007)for description of the various methods).

Test methods used for investigating the properties of an itemcan also be characterized by being destructive or non-destructive(NDT e Non-Destructive Testing). However, in this article allcondition monitoring methods are classified as non-destructive.Implementation of non-intrusive condition monitoring methodsfor monitoring of heat exchanger bundles remains challenging.

4.1. Analysis of feasible condition monitoring activities

In general, condition monitoring methods may be categorizedinto analysis (simulation tools, neural networks, etc.), processmonitoring (e.g. chloride content, pH, etc.), performance moni-toring (e.g. efficiency, temperature, pressure, current, etc.),inspection (human senses or by use of specialized tools), andfunctional testing (cycling of valves, etc.), as illustrated in Fig. 4.

Analysis is here distinguished as a separate condition moni-toring activity to emphasize its importance, even though all of theabove activities will involve some kind of assessment of data.Process monitoring has been distinguished from performancemonitoring; the former being more focused on monitoring ofchemical properties than machine properties and outputparameters.

The motivation for continuous process monitoring is to securea stable and continuous production process. In some cases processmonitoring information can be used to predict potential damagesto the equipment or reduced technical condition due to changes in

the process parameters. Regarding heat exchangers, for example,several different process parameters can be monitored, includingmeasurement of pH, chloride ion concentration, oxygen concen-tration, metal ion concentration, on-line corrosion monitoring ofprocess fluid composition with electromagnetic monitoringmethods (linear polarization resistance). In addition, control andmonitoring of water vapour dew point in hydrocarbon systems isvery important in order to control and predict corrosion in carbonsteel tubes.

In some cases the process parameters may vary outside thedesign limits for a period in time. It is important to document thedeviations from the design limits, to plan for the next shutdown,and make a realistic maintenance plan. Ideally, all data from theprocess monitoring and inspection should be of such quality that itcan be used to predict the technical condition of the equipment.

Performance monitoring in this article is defined as themonitoring of component properties, such as temperature at inletsand outlets of a heat exchanger, differential pressures tube side andshell side, andmass flows. Changes in these parameters can be usedto indicate conditions, such as leakage and fouling on tube side, andindicate a potential maintenance need.

There exist several different types of methods that can be usedfor inspection of heat exchangers and bundles, of which some are:

� Ultrasonic testing (UT)� Electromagnetic inspection� Acoustic emission testing� Radiographic inspection� Thermographic inspection� Laser inspection� Vibration/stress measurements� Corrosion monitoring by inspection of retractable probes� Visual inspection� Tracer

Some methods, such as liquid penetrate inspection, magneticparticle inspection, and visual inspectionwithout use of specializedtools can only be used on accessible component surfaces. There areseveral inspection methods which are specialized for tube inspec-tion, such as Ultrasonic Internal Rotary Inspection System (IRIS),ultrasonic T-scan, ultrasonic P-scan (scanning of tube-to-tube sheetwelding), Eddy current testing (ECT) using specialized probes fortube scanning, and laser optics.

Corrosion monitoring can be performed by inspection ofretractable probes from tube side and shell side of the heatexchanger. In addition, there are several different kinds of ultra-sonic, electromagnetic, radiographic, and thermographic inspec-tion methods, in addition to vibration/stress measurements andacoustic emission methods which can be used for inspection ofdifferent heat exchanger components, such as shell/body, front-endand rear-end heads, and welds (Utne & Brurok, 2010).

Functional testing of bundles can be performed througha leakage test with helium. Since helium is an argon gas, theexplosion hazard is not present while testing. Use of tracer can beperformed by using a radioactive trace element in the processmedium. Any leakage in the bundle is possible to detect with thetracer element.

Table 3 shows some methods and their feasibility with respectsto monitoring of tubes and the safety critical failure mode“leakage”.

4.2. Mapping of condition monitoring characteristics

Degradation and failure mechanisms, equipment material,criticality of the potential failure mode, failure development rate,

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Fig. 3. Investigation of condition monitoring methods in the system hierarchy.

Fig. 4. Classification of condition monitoring according to activities.

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P� F interval (for explanation, see e.g., Moubray, 1991), probabilityof detection (PoD) are all characteristics that influence the feasi-bility of a condition monitoring method. Further, what monitoringcould be done non-intrusively, how often, and how the data can betransferred and interpreted (automatic, manual, continuous) areaspects that needs to be evaluated. In addition, operator experi-ence, time and cost of inspection, training, and special resourcerequirements are also important to consider. Since each methodhas their advantages and disadvantages, a combination of methodsis often used to obtain the optimum coverage and PoD.

Fig. 5 illustrates the main generic alternatives or categories ofcondition monitoring methods focussing on the three characteris-tics; (i) intrusive vs. non-intrusive, (ii) manual vs. automatic, and(iii) periodic vs. continuous. The features of a method influencecosts differently, for example, by implementing a non-intrusivemethod it is possible to avoid costly shutdowns of productionequipment during conditionmonitoring. If a method can be appliedautomatically, the personnel costs could be reduced, but costs dueto the automation system would increase. A method appliedcontinuously pose requirements to data handling and storage,which gives associated costs. On the other hand, continuouscondition monitoring could be beneficial for fast developingdegrading conditions in order to avoid costly maintenance. Theseissues have to be considered in cost evaluations before deciding onthe most beneficial condition monitoring method.

Technological Readiness Level (TRL) may be used for assessingthe maturity of any existing technology. The maturity of the tech-nology influences the costs of choosing the technology for use ina system. In Table 4 the different relevant methods for tubes areassessed with respect to applicable generic categories from Fig. 5and the maturity and feasibility in two levels; light grey repre-senting mature technology, and dark grey the least mature, but

feasible technology. For details on technological assessment, see(DNV, 2001; DOD, 2009).

Before the screening process for selecting feasible conditionmonitoring methods can start, the characteristics (here denotedparameters) for each method must be analyzed. In the following,the parameters shown in Table 5 are suggested and discussed.

As a preparation for the assessment of parameters, a mappingtemplate with CM parameters should be filled in, such as theexample in Table 6.

Evaluating the different condition monitoring methods on suchparameters soon encounter typical decision-making problems,such as whether to prioritize (weight) requirements, how to gathersufficient data about the methods, and combining qualitative andquantitative data in the total assessment. Different multi-criteriadecision-making methods may be used, some simple (e.g., simplerank) and some more complicated (see e.g. Keeney & Raiffa, 1993).Assessing the different alternatives and estimating costs areaddressed in the next step.

5. Step 3: assessment and decision-making

An overall screening of applicable condition monitoringmethods based on the characteristics defined and analyzed in step2 should enable the decision-maker to discharge the least

Table 3Relevant conditionmonitoringmethods for the safety critical failuremode “leakage”(item number 1 in Table 2).

Conditionmonitoringcategory

Level 1 Level 2 Level 3

Failure mode Failure mechanism Root cause

Leakage Corrosion H2S, CO2, MIC

Analysis U (Thermodynamic)Functional testingInspection U (ECT, UT, tracer) U (ECT, UT, tracer)Performance

monitoringU (Efficiency)

Process monitoring U

Fig. 5. Classification of condition monitoring categories.

Table 4Condition monitoring methods, feasibility and technological maturity (for cate-gories, see Fig. 5). Light grey represents mature technology, dark grey the leastmature.

Activity Generic category

Method Level 1 2 3 4 5

Analysis Thermodynamicsimulation

Failure mode U U

Inspection Eddy currenttesting (ECT)

Failure mode,failuremechanism

U

Inspection Ultrasoundtesting (UT)

Failure mode,failuremechanism

U

Inspection Tracer (injection) Failure mode U U

Inspection Tracer (embedded) Failuremechanism

U U

Processmonitoring

Process measurement Root cause U

Performancemonitoring

Efficiencymeasurement

Failure mode U

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beneficial methods. The main objective of the screening is to selectthe alternatives that neither compromise safety nor productionavailability. The screening should also reduce the number of deci-sion alternatives to minimize the further work load, especiallyrelated to the estimations of costs. Another advantage is that thequalitative screening is less affected by missing or unreliablestatistical data, such as failure rates and failure distributions.

5.1. Qualitative assessment

The qualitative screening of the alternative condition moni-toring methods should be performed by using a questionnaire,shown in Table 7. The questions have been developed based on thecharacteristics in step 2, as well as any possible impact on safetyand availability of the production system. Questions 1e3 representquestions related to safety, questions 4e5 represent productionavailability issues, and question 6 represents both issues. For eachquestion a score (High, Medium or Low) is given.

The questions in Table 7 are linked to the condition monitoringparameters from Table 6 with respect to safety and availability,shown in Table 8. The final screening of methods is based onTable 8, and is performed by combining the conjunctive methodwith the lexicographic ordering method (Andresen, 2000). Thismeans that cut-off levels are determined for each question, so thatamethod cannot be selected if the cut-off level related to a questionis exceeded. Since safety is considered the most importantparameter, question 1 is considered more important to fulfil thanquestion 6.

Decision matrices linking each questionwith each parameter, asshown in Fig. 6, are used for the screening of methods. For example,a score H on CM par1 (high degree of operator skills required)combined with an answer H to question 1 (serious hazards existrelated to the method) gives 3 in the decision matrix, which is

unacceptable. A condition monitoring method achieving a score of1 in the decision matrix should be given 1st priority, and a methodwith a score of 2 should be given 2nd priority. If an alternative isassigned 2nd priority on a question, it cannot be assigned a 1stpriority on later questions. Similar matrices can be developed forthe remaining questions and parameters.

After having screened all methods on all questions, theremaining 1st priority method(s) should be selected for furtherdetailed assessments and estimations of costs. If only 2nd priorityalternatives remain or all alternatives are ruled out, the screeningprocess should be reconsidered to determine if the screeningprocess has been too rigid or if no feasible method really exists.

5.2. Quantitative assessment of costs

In general, implementation of a condition monitoring methodshould reduce the operation and maintenance costs of the equip-ment without compromising safety. Investment or capital costsincur as a result of the decision to purchase and implement avail-able condition monitoring technology, or to develop or adapt newtechnology. Therefore, a viable condition monitoring methodshould reduce more costs in the long run than its initial investmentcosts.

To be able to calculate the costs related to implementation ofa condition monitoring method over the equipment’s life cycle, it isnecessary to identify the constituent cost elements at a feasiblelevel (IEC, 2004). Fig. 7 provides a general overview of importantcost elements that need to be taken into consideration.

All elements in Fig. 7 may not be applicable for all types ofmethods and equipment, and have to be adjusted to the situation athand. Therefore, an initial screening should be performed for thecondition monitoring method and the equipment to select therelevant cost elements and narrow the more detailed cost analysis

Table 5Condition monitoring parameters for screening of methods (CM means condition monitoring).

Condition monitoringparameter

Description Evaluation method

CM par1 Degree of operator skills required Relative comparison of the applicable methodsCM par2 Degree of human interaction for operating

the CM methodRelative comparison of the applicable methods

CM par3 Probability that the failure is not detectedby the CM method, 1� PoD

Good detection probability or PoD¼ 0.9, givesthe score low (L)Medium detection probability or PoD¼ 0.7 givesthe score medium (M)Bad detection probability or PoD¼ 0.2 gives thescore high (H)

CM par4 Degree of intrusiveness Relative comparison of the applicable methods(Low (L) e medium (M) e high (H)).

CM par5 P� F interval compared to maintenancemobilization time.

I ¼ P � F interval=maintenance mobilisation timewhere I gives the threshold and L is the worst score:0� I< 0.9 gives low (L)0.9� I� 1.1 gives medium (M)I> 1.1 gives high (H)

CM par6 Length of condition monitoring interval Continuous gives low (L)Periodic (days) gives medium (M)Periodic (months) gives high (H)

Table 6Example of a mapping template for condition monitoring (CM) methods applicable for bundles.

CM category CM method CM par1 CM par2 CM par3 CM par4 CM par5 CM par6

Analysis Thermodynamic simulation H L M L M LInspection Eddy current testing (ECT) M H M H M HInspection Ultrasound testing (UT) M H L H H HInspection Tracer (injection) H M M M M HInspection Tracer (embedded) H M M M M HProcess monitoring Process measurement L L H L L LPerformance monitoring Efficiency measurement L L H L L L

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to the most important contributing costs. Regarding a heatexchanger, Table 6 can be used as a basis for an assessment of therelevant cost elements to include in the LCC.

Utilization of condition monitoring requires investments inequipment and software, competence, and resources to performthe condition monitoring tasks and condition-based repairs. InFig. 7, these costs, or capital or investment costs CC may includeresearch and development costs (R&D) and production andinstallation costs. Further, R&D costs may represent conceptdevelopment and engineering design, documentation, and soft-ware. If the condition monitoring method is fully mature andavailable for purchasing (see Table 4), R&D might not be necessaryfor implementation and some or all of these costs can be eliminatedfrom the model.

The cost elements of concept development and engineeringdesign may include feasibility study, development of requirementsand specifications, development of prototype, test and evaluation,and external certification. The need for documentation is depen-dent on complexity and the requirements to the condition moni-toring method. Costs that belong to documentation are designdocumentation, production documentations, and operationmanuals. Software costs may include development of diagnosissystems or purchase of existing systems.

Production and installation cost comprises purchase of condi-tion monitoring technology that require “produce on order” fromthe vendor. These costs may be calculated based on the costelements; manufacturing and quality control cost; the latter con-sisting of production and commissioning control costs, includingtesting. The support costs consist of spare parts and inventories, aswell as service, transport, and training. Software is also a relevantcost element here.

The ownership cost CO includes operations, maintenance, andlogistic support for the condition monitoring method and theequipment for which the method will be used. The benefits ofimproved condition monitoring should appear in this part of the

equipment’s life cycle. Operations cost comprises personnel cost,infrastructure, equipment/tools, energy costs, and any use of chem-icals. Maintenance costs include costs related to corrective andpreventive maintenance. Costs of condition monitoring are consid-ered part of the equipment’s preventive maintenance costs. Imple-mentation of (improved) condition monitoring may change theamount of corrective and preventive maintenance needed, and assuch, the maintenance interval. Regarding a heat exchanger,improved condition monitoring should lead to less corrective main-tenance and an opportunity for better planning of preventive main-tenance; thus reducing the maintenance costs. Logistics supportcomprises costs related to support, service and training duringoperation. These costs may be calculated based on the cost elements,such as inventory cost, transport cost, personnel costs, user supportdocumentation, software updates, databases, and data mining.

The costs of decommissioning CD are related to personnel,equipment, decommissioning operation, transport, disposal(includes salvage value), and documentation.

When all cost elements have been identified and calculated, thelife cycle costs can be calculated as follows:

LCC ¼ CC þ CO þ CD (1)

5.2.1. Costs of ownership-improved availabilityThe benefits of implementing condition monitoring should be

considered in relation to the LCC costs. In general, the benefits maybe represented in terms of avoided costs compared to the LCC costs.A screening of the benefits related to safety and availability isperformed in step 2, but if no decision alternative is obvious or thedecision-maker needs more detailed information about the bene-fits, avoided costs should be estimated.

In general, the condition monitoring method x should beimplemented if

CC;x þ CO;x þ CD;x < CO þ CD (2)

where CC,x is the investment costs for method x, CO,x is theownership costs for the equipment with method x implemented,CD,x is decommissioning costs with method x implemented,whereas COþ CD are costs for the equipment without method ximplemented.

Preventive and corrective maintenance costs are part of theownership costs with and without condition monitoring method ximplemented. The corrective maintenance costs CCM include costelements, such as personnel cost (man hours), and costs of spareparts and tools required to perform the task. Similarly to correctivemaintenance costs, preventive maintenance costs CPM consist ofpersonnel cost (man hours) for one preventive task, and costs ofspare parts and tools required to perform the task.

Preventive and corrective maintenance costs may be calculatedin different ways, depending on the maintenance strategies. Since

Table 8The relationship between the condition monitoring (CM) parameters and the questions focussing on safety and availability.

Number Question CM parameter Screening criteria

1 To what extent do hazards related tothe CM method exist?

Degree of operator skills required. Screening of CM methods where operator has insufficientskills to cope with the hazards.

2 To what extent do hazards related tooperating the CM method exist?

Degree of human interaction foroperating the CM method.

Screening of CM methods where human interaction is hazardous.

3 To what extent do hazards related tounexpected failure of the system exist?

Probability that the failure is notdetected by the CM method.

Screening of CM methods where low detection probabilityare hazardous for the unexpected failure.

4 To what extent is the planned downtimeof the CM method production critical?

Degree of intrusiveness. Screening of CM methods where intrusiveness causesproduction critical downtime.

5 To what extent is detection of a potentialfailure production critical?

P� F interval compared tomaintenance mobilization time.

Screening of CM methods with too short P� F intervalcompared to mobilization time.

6 How fast is the failure progression? Length of the CM interval. Screening of CM methods with too long periodic intervalcompared to failure progression.

Table 7Questionnaire (CM means condition monitoring).

Question Answer

High Medium Low

1 To what extent do hazardsrelated to the CM method exist?

2 To what extent do hazards relatedto operating the CM method exist?

3 To what extent do hazards relatedto unexpected failure of the system exist?

4 To what extent is the planned downtimeof the CM method production critical?

5 To what extent is detection of potentialfailure production critical?

6 How fast is the failure progression?

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condition monitoring may influence the maintenance interval, itmay be feasible to assess how the maintenance costs are affectedwhen method x is implemented. In general, many methods havebeen proposed for optimization of maintenance costs, focussing onminimizing costs and maximizing the maintenance interval, seee.g. Jardine and Tsang (2006). If, for example, the current mainte-nance policy for a bundle in a heat exchanger is age-based repair/replacement, where it is assumed that the component is restored toan “as good as new” condition, the preventive and correctivemaintenance costs per interval s can be optimized by:

CAðsÞ ¼ CPM$RðsÞ þ CCM$FðsÞ (3)

where R(s) represents the reliability function or the probability ofno failure in the interval, and F(s) is the probability of failure in theinterval (1� R(s)).

Often, failure data may not be available which means that it isnot straightforward to use Eq. (3). If generic failure data can beretrieved from a reliability database (such as OREDA (2009) forequipment in the oil and gas industry, including heat exchangers),the operating conditions and the design of the equipment at hand

may not be similar. There are many different types of heatexchangers in the oil and gas industry, and using a constant failurerate from a database may lead to overestimation of failures in theearly life phase and underestimation in the last life phase.

A critical failure mode for the bundle in a heat exchanger isleakage (Table 2). The main root causes to a leakage are normallycorrosion, fretting, or fatigue, causes that are not random, but occurmainly due to ageing. Thus, for a bundle in a heat exchanger, it maybe more applicable to use the Weibull distribution:

RðsÞ ¼ e�ðlsÞa (4)

where l is the scale parameter and a is the shape parameter. TheWeibull distribution has an increasing (a> 1), decreasing (a< 1) orconstant failure rate (a¼ 1), which may be revealed, e.g., by usinga TTT-plot (Rausand & Høyland, 2004). When a¼ 1 the Weilbulldistribution equals the exponential distribution and the scaleparameter equals a constant failure rate.

The parameters in a Weibull distribution may be estimated byusingMaximum Likelihood procedures (Rausand &Høyland, 2004).However, in many cases there is not sufficient data, and expertjudgements need to be used. Judging from the root causes to bundleleakage in Table 2, it may be assumed that using an increasingfailure rate is applicable for a bundle. There exist severalapproaches to expert judgement, such as the Bayesian method(Hauptmanns, 2011) and fuzzy logic (Yuhua & Datao, 2005). Øienand Hokstad (1998) provide guidance on how to establish quanti-tative estimates from experts when there is a lack of statistical data.A more direct approach to establishing the shape parameter issuggested by Vatn (2007):

Fig. 7. Cost breakdown structure.

Fig. 6. Matrix, relating a condition monitoring parameter to a question, where a scoreof 3 is the cut-off level and the alternative is ruled out.

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a¼ 4: There is a systematic reporting of one and only oneparticular failure cause or mechanismwhich is related to ageing,for example, wear, corrosion, fatigue etc.a¼ 3: There is a systematic reporting of different failure causesor mechanisms which all are related to ageing, for example,wear, corrosion, fatigue etc.a¼ 2: There is a reporting of a mixture of failure causes, ofwhich some are related to ageing.a¼ 1.5: Failure mechanisms can hardly be related to ageing.

Downtime costs are associated with corrective and preventivemaintenance costs. Changes in downtime costs due to imple-mentation of condition monitoring method x and improved avail-ability is, according to IEC (2004), a common factor to use for trade-offs related to LCC and evaluation of options. The improvement inavailability A depends on the method’s PoD, probability of causingfalse alarm (PoF), whether the method is intrusive, measurescontinuously, is automatic or manual, and so on.

The costs of downtime can be calculated based on the failure ratefor the different failure modes, the expected downtime per failuremode, and the costs of lost production. If data about failure rates andlife distributions are not available and reliable enough to performdetailed calculations (cf. Eq. (3)), the ownership costs should focuson production losses and use expert judgements to assess likelyimpacts by implementing the condition monitoring method.

A condition monitoring method for a heat exchanger may notdetect the emerging failure (P� F interval). This may be due to theinspection interval being too long compared to the P� F interval orthe quality of the method being too low. The probability ofdetecting an emerging failure may be denoted PI (for one inspec-tion). According to (Vatn, 2007), if there is no data, PI¼ 0.9 may beconsidered good detection probability, PI¼ 0.7 is medium detectionprobability, and PI¼ 0.2 is bad detection probability. The PoD maybe considered as a measure of the reliability of NII, and is veryimportant (Wintle, Moore, Henry, Smalley, & Amphlett, 2006).

It may be assumed that the higher PoD of a method, the lowerunavailability (U¼ 1� A) and corrective maintenance, due toa higher chance of discovering potential degradation. The sameargument goes for P� F efficiency. A high P� F efficiency (athreshold of High in CM par5) of a condition monitoring methodincreases the time available for planning preventive maintenance.The impact of PoD and P� F efficiency on the unavailability andassociated costs may be calculated as follows:

E�CU;xðtÞ

� ¼ CDT$�1� �

AxðtÞ$PI;x$ex��

(5)

where E(CU,x(t)) represents the expected downtime costs in a timeinterval with length twithmethod x implemented, CDT is the cost ofdowntime, Ax(t) is expected availability (based on failure data and/or expert judgements), PI,x represents PoD, and ex is P� F efficiencyfor method x. PI,x and ex can be considered as weighting factors.

We may assume that the capital costs occur in the base year(i¼ 0), and hence, only ownership costs and decommissioningcosts should be discounted over the equipment’s lifetime, since thevalue of money changes over time. The Net Present Value (NPV) offuture cost flows is found from (Fabrycky & Blanchard, 1991):

NPV ¼Xn

i¼1

ci$ð1þ dÞ�i (6)

where d is the discount rate, ci denotes the nominal cash flow inyear i, and n is the number of years considered.

The total equipment (heat exchanger) costs of condition moni-toring method x over the lifetime L¼ n are:

CTOT;x ¼ CC;x þXn

i¼1

�CO;x þ CD;x

�i$ð1þ dÞ�i (7)

The total equipment (heat exchanger) costs without imple-mented method x over the lifetime L¼ n are:

CTOT ¼Xn

i¼1

ðCO þ CDÞi$ð1þ dÞ�i (8)

5.2.2. Costs of ownership-improved safetyDepending on the type of equipment, costs related to risks of

occupational injuries and process accidents may be relevant toconsider and include in the ownership costs. If a condition moni-toring method may lead to improved probability of detectingdegradation, and the equipment has the potential to causehazardous consequences in case of failure, a reduction in riskimplies a benefit by implementing that method. Risk costs are oftennot included in LCC because they may imply estimates of a price onhuman lives, which is challenging (Vatn, 1998).

According to Rausand and Høyland (2004), the occurrences ofaccidents or events of a type j, Aj, may in most cases be modelled asa homogeneous Poisson process (HPP). The number of times event joccur, Nj(t), in a time interval of length t is a stochastic process withfrequency, lj, and probability:

Pr�NjðtÞ ¼ n

� ¼�ljt

�n

n!e�ljt (9)

Since the expected number of events in the time interval oflength t is:

E�NjðtÞ

� ¼XN

n¼0

n$Pr�NjðtÞ ¼ n

� ¼ ljt (10)

Then the expected costs related to events of type Aj in the timeinterval of length t are:

E�CjðtÞ

� ¼XN

n¼0

n$Pr�NjðtÞ ¼ n

�$Cj ¼ Cjljt (11)

where Cj denotes the cost of event type Aj. For a heat exchangera serious event may be a hydrocarbon leak.

To be able to compare various condition monitoring methodswe introduce the notation lj(x) for the occurrence frequency ofevent type jwith method x, and Cj(x) for the cost of an event of typeAj with method x. The impact of condition monitoring method x onthe costs of the risk, DCRISKðxÞ, e.g., related to hydrocarbon leaks(event A1) can then be calculated as:

DCRISKðxÞ ¼Xn

i¼0

ðC1ðxÞ$Dl1ðxÞÞ$ð1þ dÞ�i (12)

where Dl1(x) represents the change in the occurrence frequency ofhydrocarbon leaks due to implementation of method x.

A challenge with calculating the risk costs when implementingnew and/or improved condition monitoring methods is the abilityand the uncertainty related to quantifying its impact on the acci-dent frequency. Especially for new technology, there is usually no orvery limited experience available. In most cases, expert judgementshave to be used. Still, if cost calculations are not possible to performregarding the risk, we claim that a qualitative evaluation of riskimpact is better than no evaluation.

Another issue is that discounting of risk costs implies an ethicalissue about what discount rate to apply. In addition, one faces the

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problem of accidents of a specific type with very high consequencecosts, but with very low occurrence frequency. Such accidents mayalmost disappear as a cost contributor in LCC, even though theymay cause a serious financial challenge to the company if theyoccur (Utne, 2009).

6. Discussion and conclusions

This article presents a structured approach which supportsdecision-makers, such as operators and contractors, in selectingconditionmonitoringmethods for production equipment. The overallobjectives of the approach are to improve safety and enhance avail-ability inproductionplants. A shell-and-tubeheat exchangerhasbeenused to exemplify the approach throughout the article. Even thoughthe focus is on static equipment, the approach should be feasible fora wide range of production equipment where use of conditionmonitoring couldbe implemented to improve safetyand reduce costs.

The approach consists of three steps: (i) selection and analysis ofcritical equipment, (ii) analysis and mapping of condition moni-toringmethods, and (iii) assessment and decision-making. The firststep may be part of maintenance planning and reliability-centredmaintenance (RCM). This means that in many cases informationabout critical failure modes for equipment in a production plant isalready available. Step 3 consists of qualitative screening andquantitative cost estimations.

The approach is highly flexible; if data available is scarce and ifrisks are considered low, it is possible to narrow down the quan-titative estimations, use expert judgements, and mainly focus onthe costs of implementing the condition monitoring methods. Thisflexibility enables the decision-maker to use the approach indifferent ways, depending on the situation at hand.

The proposed approach can be utilized both in the operationalphase and in the design phase of production equipment. It isnecessary to consider operational aspects as early as possible in thedesign phase in order to optimize the operational costs that dependon design solutions. Normally, there is a limited amount of dataavailable in the design phase, which may make the quantitativecost analyses more challenging than the qualitative evaluations andranking of condition monitoring methods. A solution could be toconsider the qualitative evaluations and ranking against theinvestment costs for the condition monitoring methods.

Uncertainty elements must be assessed and managed whenpractising the approach, and sensitivity analyses are recommended.

Acknowledgements

The article has been written as part of work within the Centrefor Integrated Operations in the Petroleum Industry (IO Centre).The authors are grateful for the support and feedback received frommembers of the IO Centre and the constructive comments from thejournal reviewers during the preparation of this article.

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