Best Practices Implementation Best Practices ImplementationFixed Equipment Reliability2ndAnnual World Refining Technology SummitAbu Dhabi, UAE Abu Dhabi, UAE1-2 November, 2010l d Gregory AlvaradoVice-President and Sr. ConsultantSh kH i htOH Shaker Heights, OHHouston, TXEdmonton, Alberta, CanadaAbu Dhabi, UAEAl khobarKingdom of Saudi Arabia Al-khobar, Kingdom of Saudi Arabia1Overview Introduction The Goal Impact of Culture and Practices Industry Loss Statistics Marsh Report 2010 Life Cycle Management of Equipment & Best Practices Life Cycle Management of Equipment & Best Practices Overview Management Systems Management Leadership and Support Recognizing, Understanding and Managing Uncertainty Sample Metrics for Managing Risks p g g Gap Assessments Best Practices vs ComplianceIntroduction Quote from the Marsh and McLennan Report, The 100 Largest Losses 1972-2001, 20th Edition, February 2003, a publication of Marshs Risk Consulting Practice: a publication of Marshs Risk Consulting Practice:Losses in the refinery industry have continued to increase over the last few years and the causes highlight the aging facilities in this category.A significant number of larger losses (over $10,000,000) have been caused by piping failures or piping leaks, leading to fires and/or explosions. Several large losses due to piping failures were due to corrosion issues or using the wrongg gmetallurgy..IntroductionThe explosion occurred when employees were attempting to isolate a leak on a condensate line between the NGL plant and the refinery. Three crude units were damaged and two reformers were destroyed. The fire was extinguished approximately nine hours after the initial explosion. Five people were killed and 50 others were injured. Initial investigation into the loss indicates a lack of inspection and maintenance of the condensate line. pJune 25, 2000Mina Al-Ahmadi, Kuwait$412,000,000 (2000 dollars) $433,000,000 (2002 dollars) $412,000,000 (2000 dollars) $433,000,000 (2002 dollars)From the Marsh and McLennan Report, The 100 Largest Losses 1972-2001, 20thEdition: February 2003, a publication of Marshs Risk Consulting Practice y , p gThe GoalAchieve and corporate compliance (business, safety, environmental) and ensure reliable use of fixed equipment for finite run times, by understanding, id tif i i di identifying, measuring, and managing risks and eliminating non-value adding activities and costs activities and costs.IntroductionI t iN d d Improvement is NeededThe significant problems we haveThe significant problems we have cannot be solved at the same level of thinking with which we created them.~Albert Einstein Plants are aging Failure rates will increase without effective change See latest Marsh Consulting report2010 g pMarsh Report Observations As risk management techniques grow increasingly complex, and oil, gas, and chemical companies continue to seek new ways to manage total cost of risk continue to seek new ways to manage total cost of risk, it has become even more imperative to have a firm grasp on the nature of operational losses that have historically occurredIndeedwhen planning ahead historically occurred. Indeed, when planning ahead, one step involves looking back to the future. No one who has been in these industries for very long would ever say that will never happen again! James R. Pierce,e e say t at e e appe aga Ja es e ce,Chairman Energy Practice, Marsh Consulting Five year loss totals in the refinery industry have continued to trend upwards over the last few years continued to trend upwards over the last few years. Piping failures or leaks (corrosion or incorrect metallurgy) and start-up and shut-down events continue to be significant causes. gAPI 754 NEW PSM MetricsR l d A il 2010 Released April 2010What Are IM Protective BarriersJames T. Reason, psychologist, 1990Christopher A. Hart, 2003Swiss Cheese Model Hazards are contained by multiple protective barriers. Barriers may have weaknesses or holes. When holes align, the hazard passes through theg , p gbarriers resulting in the potential for harm. Barriers may be physically engineered containment or behavioral controls dependentcontainment or behavioral controls dependent upon people. Holes can be latent, incipient or actively opened, p y pby people.IM PBs in Facility PSM ProgramH WHeinrich1931Accident Pyramid H.W. Heinrich, 1931 Accident PyramidPyramid Safety accidents can be placed on a scale by the level of consequenced d h l Many precursor incidents occurred with lesser consequences for each accident that occurred with greater consequences. h d l d l h Heinrichs model represents a predictive relationship between lower and higher consequence personal safety events.I di h di i id d l di Indicators that are predictive are considered leading indicators used to identify a weakness that can be corrected b fhi h before a higher consequence event occurs. Tier 1 is the most lagging and Tier 4 is the most leading.12Examples of Tier 4 Items Process Safety Action Item Closure - Percentage and/or number of past-due process safety actions. This may include items from incident investigations, hazard evaluations or compliance audits. Training Completed on Schedule - Percentage of process safety required training sessions completed with skills verification. Procedures Current and Accurate - Percent of process safety required operations and maintenance procedures reviewed or revised as scheduled. operations and maintenance procedures reviewed or revised as scheduled. Safety Critical Equipment Inspection - Percent of inspections of safety critical equipment completed on time.This may include pressure vessels, storage tanks, piping systems, pressure relief devices, pumps, instruments, control systems, interlocks and emergency shutdown systems, mitigationcontrol systems, interlocks and emergency shutdown systems, mitigation systems, and emergency response equipment. Safety Critical Equipment Deficiency Management - Response to safety critical inspection findings (e.g. nonfunctional PRDs and SISs). This may include proper approvals for continued safe operations, sufficient interiminclude proper approvals for continued safe operations, sufficient interim safeguards, and timeliness of repairs, replacement, or rerate. Management of Change (MOC) and Pre Start-up Safety Review (PSSR) Compliance - Percent of sampled MOCs and PSSRs that met all requirements and quality standards requirements and quality standards.Examples of Best Practices Implementation and Benefits Improved reliability Implementation and Benefits Fewer leaks Fewer surprises during turnarounds Shorter turnarounds Proactive behavior = Planning, strategies, health, safety and business result From FEED through end of life Elimination of non-value adding activities Effective life-cycle planning and management of equipment q p Predictable outcomes Effective spending Better intentional directives Better intentional directivesif l Life-Cycle Management of Fixedof Fixed EquipmentSample components of ASME PTB-2-2009Guide to Life Cycle Management of Pressure Equipment Integrity Pressure Equipment IntegrityJune 5, 2009Best Practices Under ConstructionThe API Pressure Vessel Inspection Code, 510, is undergoing a massive re write to make it consistentundergoing a massive re-write to make it consistent with the other standards and capture industry best practices, to date.Construction of the following new references is under way: RP 583Corrosion Under Insulation RP 584Integrity Operating Windows RP 585Pressure Equipment Investigation RP 585Pressure Equipment Investigation API 691 RBI of Rotating EquipmentBest Practices Newly ReleasedNewly released documents include:API RP 580 Ri k B d I i2d API RP 580 Risk-Based Inspection, 2ndEdition, November 2009 API RP 576 Inspection of Pressure Relievingp gDevices, 3rdEdition, November 2009 API RP 574 Inspection Practices for Piping Components3rdEditionNovember 2009 Components, 3 Edition, November 2009 API RP 572 Inspection Practices for Pressure Vessels API 570 Piping Inspection Code: In-servicep g pInspection, Rating, Repair, and Alteration of Piping Systems, 3rdEdition, November 2009Inspector CertificationsBasic Basic 510 Pressure Vessel 570 Piping 570 Piping 653 Above Ground Storage Tanks3 f 936 Refractory QUTEInspector Certifications Advanced Supplemental pp 580 RBI 571 Damage Mechanisms 577 Welding & Metallurgy Meaning of supplemental certifications API DB Searchhttp://www.api.org/certifications/ICP/PEI Management SystemsInspectioneering Journal Article SeriesJanuary/February 2010 IssueManagement Leadership and Supportfor PEI, by John ReynoldsManagement Leadership & Support for PEI for PEIInspectioneering Journal Article SeriesJanuary/February 2010 IssueManagement Leadership and Supportfor PEI, by John ReynoldsPEI Program - 101 ElementsInspectioneering Journal Article Series Published Ammonium Salt Corrosion Auditing of PEIM Programs Bad Actor Pumps Brittle Fracture Prevention Electric Resistance Welded (ERW) Pipe and Tubing Exchanger Bundle Classification External Corrosion Prevention Carbon Moly Equipment Cathodic Protection Cast Iron Certification of Inspectors Inspection for Environmental Cracking Gray Zone Equipment Fabrication QA/QC Failure Analysis Chloride Cracking (External) of Stainless Steel Piping and Vessels Contamination of Process Streams (Sudden Inadvertent) Corporate Failure MemoryCo osion Rate and Remaining Life Fatigue Failures Field Surveillance Fitness for Service (FFS) Analysis Flange Bolting Procedures Flange Gasket Selection and QAl S i Corrosion Rate and Remaining Life Calculations (Timely) Corrosion Rate and Process Condition Monitoring Corrosion Under Insulation (CUI) Corrosive Mix Points Flare System Inspection Fraudulent and Counterfeit Materials Furnace Monitoring and Inspection Handling of Pressure Relief DevicesH t T iiS f tS t Critical Check Valves Dummy Leg Corrosion Deadlegs (Inspection of) Dew Point Corrosion Heat Tracing in Safety Systems Hot Spots Hot Tapping and Welding on Equipment-in-Service Hydrostatic Overpressures Hydrotest Water Quality Hydrotest Water Quality Hydrotesting SafetyPEI Program - 101 ElementsInspectioneering Journal Article Series Published Idle and Retired Equipment Incidents Associated with Installation of Pollution Control Equipment Injection Point Inspection NDE Specialists NDE versus Pressure Testing Non-blowout Proof Valve Stems Inspection Recommendation Tracking Inspection Scheduling Inspection Procedures Inspection Staffing Inspection for Inaccessible Locations On-Stream Inspection (OSI) Overdue (Equipment) for Inspection Paint and Coatings QA/QC Participation on Industry Standardization Inspection Record Keeping Systems (Effective) Key and Critical (K/C) Materials Degradation Variables Knowledge Transfer to OperatorsCommittees Performance Testing of NDE Examiners Pipe Plugs Pipe Rack Inspections Piping Inspectionl d S k Knowledge Transfer to Operators Leak and Failure Investigation Reporting Leak and/or Pressure Testing Line of Authority and Management Leadership for Inspection Localized Corrosion (Inspection of) Plugged Vents on Storage Tanks Positive Material Identification (PMI) Post Weld Heat Treatment Pressure Equipment and Inspection Codes / Standards Pressure Equipment Regulatory Activities( p ) Management of Change (MOC) for PEI Issues Materials and Corrosion Engineering Material Degradation Risk Management Pressure Equipment Regulatory Activities Pressure Relief Device Auditing Process Creep Mixed Metallurgy Piping SystemsPEI Program - 101 ElementsInspectioneering Journal Article Series Published Qualified Suppliers and Fabricators Relief Valve Prepopping Repair and Testing ProceduresRi k B d T dd I ti Tank Bottom Inspection Temporary Repairs and Temporary InstallationsThi kM t A d Risk Based Turnaround and Inspection Planning Root Cause Analysis, Failure Investigations, and Solution Development Selection and Placement of Corrosion Thickness Measurement Accuracy and Reproducibility Third Party Owned Equipment Total Cost of Ownership Training of Inspectors Transient Piping LoadsMonitoring Locations (CMLs) Shared Ownership of Pressure Equipment Assets Small Bore Piping (SBP) Inspection Soil-to-Air Interfaces of Buried Piping Transient Piping Loads Tank Roofs (Inspection of) Valve Quality Problems Water Drop Out Points Welding Quality Assurance and Quality Structural Inspections Surface Cleaning for InspectionWelding Quality Assurance and Quality Control Wire Wrapping / Boxing of Flange LeaksManaging Uncertainty IntentionallyAdditional Benefits Inspection Planning & CBA p g$1,200,000$1,400,000Current Inspection CostsCurrent Maintenance CostsTotal CurrentCosts$800,000$1,000,000Total Current CostsRBI Inspection CostsRBI Maintenance CostsRBI TotalTotal Savings$400,000$600,000$0$200,000Unit A Unit B Unit C Unit D Unit E-$400,000-$200,000LERU RBI Cost Benefit Inspection Planning & CBA p gUnit TypeCBI(% Reduced)RBI(% Reduced)Risk Mitigation(% Improvement)431 DIB/Deprop 11 85 74866 Heavy HDS 2 50 48867 SRU 21 93 72231 Gulfiner 22 50 28531 Amine 30 68 38 531 Amine 30 68 388733 SWS 30 83 53137 Crude 4 6 2210B Crude 53 91 38210C Vac 40 68 28865 Kero HDS 9 49 40860 Reformer 35 91 56862 LERU 17 85 68 862 LERU 17 85 68864 Unifiner 10 63 53210A Crude 32 74 42868 FCC 4 66 62869 Sulfuric Alky 16 60 44Inspection Planning3000350040001500200025003000k (Sq. Ft/yr)Ol d050010001500RiskNewOl d0 Green risk profile is with API RBI implemented in this process unit Blue risk profile is with traditional API 570/510 program in place Blue plan yields 1.7sq./year/$$ of risk reduction over 4 years Green strategy yields 2.7sq./year/$$ risk reduction over 4 years Net benefit is ~40% improvement in risk reduction Net benefit is40% improvement in risk reduction ROI >> 10XGap Check Fixed Equipment Reliability Fixed Equipment Reliability Gap Analysis FERMIProcess Best Practices Observations/recommendations Roadmap Strategy Cross-functional team with owner/operator experience and SMEs Trained team members Trained team members Metrics and Priorities Jointly developed, may also use company HSE risk matrixSample FERMIFocus AreasBroad Categories g Data Management Engineering & Inspection Programs Metallurgy g gMaintenance Equipment Planninggy Plant Processes Receiving Inspections Inspection Management Inspection Planning Welding and RepairsBenchmarking Working Practices Procedures Understanding Utilization of best practicesS i d i t d d tti Synergies and interdependent practices, processes and programs Metrics Kudos Good practices recognized Areas of vulnerabilityR d tifi t Recommendations for improvement Benchmarking metricsPractices and Implementation Scoring is based on a rating from 1 to 5 where:1 = No awareness, nor implementation 1 No awareness, nor implementation2 = Awareness, but not implemented or significantly lower caliper vs. refining industry common practice3 = Limited implementation (25%) or modestly lower caliber vs. refining industry common practice refining industry common practice4 = Partial implementation (25-90%) or similar to refining industry common practice5 = Totally implemented and part of routine business, similar to pacesetter refinery practices. The resulting scores are based both on the interview results, as well as, the file review.E hf th bj tt t t l i ht d f Each of the subject area statements are also weighted for relative importance.These weight numbers are used for the benchmarking of one facility versus another.Scoring One of the objectives of an assessment should be to provide a means of measuring the FER (Fixedto provide a means of measuring the FER (Fixed Equipment Reliability) program performance of a facility, initially and over time. The scoring enables an owner to: Compare the facility performance against a top performers performers Measure the change in performance as a result of closing the identified gaps for each FERMI focus area Compare the site to other company sites and to compare against itself at periodic intervalsAssessment Methodology File Re ie File Review The file review is performed after the initial interviews to verify the information obtained through the interview process. E2Gs specialists have reviewed fixed equipment groups andp q p g pprograms from many refineries. The mix of subject matter experts and seasoned facility technical staff are able to not only determine if a particulartechnical staff are able to not only determine if a particular MI procedure is in use, but are also able to determine a relative quality of the written material.For instance: The interview determines that the facility does have a root causeThe interview determines that the facility does have aroot causeculture.Follow up file review finds that the root cause analysis was performed, but the conclusions made were not reached in a logical manner.Generally this means that the obvious, immediate cause was determined to be the root cause was determined to be therootcause.Best Practices Sample ResourcesTo keep up-to-date with industry best practices, visit http://www.api.orgOr better yet, participate and have a voice in their developmentby visiting the API Fall and Spring Refining Meetings and becoming a committee member.gLearn more by visiting sites like:http://www.api.org/http://www.asme.orghttp://www.nace.orghttp://www.hse.gov.uk/http://www.inspectioneering.comhttp://forengineers.orghttp://www.absa.ca/htt // hi h j / li h/ http://www.highpressure.jp/english/www.equityeng.com