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TRANSCRIPT
Optimising Turnarounds to Achieve Asset Integrity
30 October 2012
OIL PETROCHEMICAL AND ENERGY RISKS ASSOCIATION (OPERA)
Conference 2012
Jacobs Consultancy
Steve Mabey
Leading technical and business consultancy:
Jacobs Consultancy – Petroleum, Chemical & Energy
Due Diligence & Valuation Merger, Acquisition & Divestiture Analysis Independent Technical & Market Consulting Asset Management, Reliability, Integrity,
Maintenance & Turnarounds Process Safety Management Environmental Planning, Permitting
& Management
Agenda
Business impact of a Turnaround
Factors influencing effective turnarounds for process plant
Delivering an effective Turnaround
BUSINESS IMPACT OF A
TURNAROUND
What is a Turnaround (TAR)?
A planned and scheduled event for conducting all necessary operational, maintenance, and
improvement tasks required to enable safe, reliable operation at the desired
performance for the next campaign.
Jacobs’ Asset Management Work Process
Deliver across complete Asset Life Cycle − “Strategic” through to “Retirement”
AM Work Process integrated into Engineering Work Process Modules defined for specific activities across phases Driven by ‘Total Lifecycle Cost’ optimization….
Conceptual Definition
(FEED)
Detailed
Design
Construction Start-Up Operation &
Maintenance
Asset Life
Extension
Asset
Retirement
Strategic and
Opportunity
Produce Most Product for the Longest Time at the Lowest Cost.
Turnarounds
Turnarounds have a major impact of downtime
On-Stream Availability = Measure of ‘Production’ (Profit Opportunity)
The turnaround is one of the major contributors to
downtime
But getting the turnaround right, will impact on long-
term reliability
Generic numbers which shall vary by Region, Industry and Company
Lost opportunity from Turnaround
Lost Opportunity for a 15 MMTA refinery >$120Million 1 day of Turnaround = $2-3Million Major incentive to provide resources and management effort
Losses for outages outside turnaround can be far greater
For a typical total oil refinery turnaround:
$US90million Lost Opportunity + $US30million Turnaround Costs
= $US120million Immediate Cost to Business
Different people – Different needs
Head Office Executive’s view: − Is it really necessary? − Will it affect the share price? − Can I use this money else where?
Plant Manager’s view: − I have so many other initiatives. − Will it distract our Operation? − Where will I find the resource? − How will I achieve my targets?
Turnaround Manager’s view: − Will the scope fit the budget? − Can I find a competent contractor? − This is stressful and traumatic!
Need alignment
Key drivers for turnaround success
Key metrics are Safety, shorten Duration & reduce Cost But Quality is fundamental to integrity
Defects introduced or retained, within asset, system or process Greatest impact on integrity, reliability, availability and profitability Issues seen many months / years after completion of the TAR
Quality
Safety Duration Cost
FACTORS INFLUENCING
EFFECTIVE TURNAROUNDS
Factors influencing Turnarounds
Turnaround Success
People
Plant Process
3 factors that influence success:
− People − Plant − Process
Delivering a successful Turnaround requires aligned strategies during Design / Operation / Maintenance
Some example issues influencing 3 factors
People − Technical capability deficit − Contractor resources
Plant − Aging plant management − Corrosion Under Insulation
Process − Integrated Business Strategy
Turnaround Success
People
Plant Process
Technical Capability Issues:
− Operating companies lost / lack technical competency
− High dependency on Contractor workforce
− Ineffective training programs to develop new talent
Result: − Insufficient management of technical /
aging plant issues
Potential Improvements: − Develop competence improvement for technical staff − Targeted use of industry specialist for critical issues
Turnaround Success
People
Plant Process
Contractor Resources
Issues: − Significant resources needed for TAR execution − Short duration events − Skilled contracting resource-pool shrinking − Lack of skills in the market place − “New build” work is more attractive
Result: − Integrity issues missed or introduced
Improvements: − Appropriate contracting strategies − Make events smaller
Turnaround Success
People
Plant Process
Aging Plant Management
Issues: − Many assets exceeded original design life − Metallurgical / corrosion / erosion issues
Result: − Potential hidden failures − Unplanned capital replacements
Improvements: − Understand equipment life − Focus inspection plans on failure mechanisms − Deploy risk based methodologies
Turnaround Success
People
Plant Process
Corrosion Under Insulation (CUI)
Issues: − Major cause of loss of containment − Insufficient scope, planning, time to mitigate
Result: − Missed opportunity to address plant issues during
Turnaround
Improvements: − CUI Management is possible using
structured “risk based” strategies − Conduct pre-shutdown assessments − Adequate planning and funding
Turnaround Success
People
Plant Process
Issues: − Desire for extended cycles − Misaligned business process − Bow wave of asset replacement − Deferred decisions − Increased risk profile
Result: − Short term decision process and inadequate
planning resulting in untimely action Improvements:
− Risk based methodologies to extend cycle times
− Alignment of Business Process − Optimised Investment Decision Support (ODIN)
Business Strategy Turnaround
Success
People
Plant Process
DELIVERING AN
EFFECTIVE TURNAROUND
Effective Turnarounds
Apply a structured Turnaround Management Process Opportunity to improve performance Mitigates for resource and skill shortages Quality & Reliability built into work process Detailed planning is critical to address known
and unknown problems
End Start -36 -12 -24
Months 0 +1.5 +3
Schedule Execute Post Review Planning Strategy
-6
Turnaround Success
People
Plant Process Scope Freeze
Turnaround Timeline: Planning is key
Spend
Influence The time to influence turnaround “efficiency” and “effectiveness” is during the Strategy &
Planning
Turnaround Success
People
Plant Process
End Start -36 -12 -24
Months 0 +1.5 +3
Schedule Execute Post Review Planning Strategy
-6
Our support - Turnarounds Readiness Assessment
Best practice activity to deliver successful events in the industry
Objective: − Assess turnaround preparation − Provides assurance − Identify risks − Mitigation − Enable sharing and transfer of best
practices across the company
Benefits: − Management assurance − Early identification of problems − Unbiased view
0
5
10
15
20
25Strategy Development
Organization & Management
Objectives & Metrics
Data / Document Management
Scope Management
Planning & Scheduling
Operational Planning
Materials & LogisticsQuality, Security & HSE
Contract Strategy
Cost Planning
Resource Planning
Execution Tracking
Emerging work
Handover
Post Event
Turnaround Effectiveness
XXXXXX, Russian Federation Best Practice
Assess improvement areas using a collaborative approach
Jacobs Consultancy’s recent Turnarounds engagements Year Location Activity
2012 Russia Refinery TAR Readiness Assessment and Implementation support
2011 Russia Refinery TAR Critical Path Review
2011 Caribbean Refinery & Power Plant TAR Assessment
2011 KSA Petrochemicals TAR Critical Path Review
2011 KSA Petrochemicals TAR Readiness Assessment
2006 UK Single Unit Readiness Assessment
2011 Russia Refinery TAR Readiness Assessment and Implementation support
2010 Russia Refinery TAR Scope Optimisation
2010 Russia Refinery TAR Readiness Assessment & Critical Path Assessment
2010 Russia Refinery TAR Readiness Assessment and Implementation support
2009 USA Petrochemicals TAR Readiness Assessment
2009 Ukraine Refinery TAR Readiness Assessment and Improvement “Road Map”
2007/08/09/10 Czech Republic Refinery TAR Readiness Assessment, Improvement “Road Map”, Implementation support
Summary
Turnarounds are a major business opportunity − Opportunity to address aging plant issues
Clarity of TAR strategy is critical for success − During event and next campaign
A structured TAR Management Process ensures planning and preparation is achieved
TAR Readiness Assessment identifies issues early
Jacobs Consultancy 226 Tower Bridge Road London, SE1 2UP Tel: +44.7780.835876 Email: [email protected] Web: jacobsconsultancy.com
Steve Mabey Director of Asset Management