G Alvarado Fixed Equipment

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Fixed EquipmentReliability Standards,Practices & Industry

Activities

Gregory AlvaradoVice-President and Sr. Consultant



Presenter – Greg Alvarado

VP and Sr. Consultant – The Equity Engineering Group, Inc.

30 Years Global Experience Fixed Equipment Reliability

23 Year Voting Member API ISC – 510, 570, etc.

Original Member of RP 580, both editions

Original Member RP 581, both editions

NACE Refining and Chemical Committees Member 12 years

First Chair NACE sub-committee on AE

API RP 580/581 Instructor for 12 years

Founder and Chief Editor of the Inspectioneering Journal

Invited Participant in 2003 Rand Study on Critical

Infrastructure for US Refining Industry



Main Points

•

Industry Goals - Reliability• Losses continue to happen

• Are we learning from the past?

• Various programs should provide “layers” of

protection

Focused information from various sourcesIndustry standards

Industry certifications

Management Systems

Management Leadership

PracticesManaging uncertainty, the role of inspection

Metrics and Gap Analyses



Introduction

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 failuresor piping leaks, leading to fires and/or explosions.

Several large losses due to piping failures were

due to corrosion issues or using the wrong

metallurgy…..

4



Introduction

The 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.

June 25, 2000Mina Al-Ahmadi, Kuwait$412,000,000 (2000 dollars) $433,000,000 (2002dollars)

From the Marsh and McLennan Report, The 100 Largest Losses 1972-2001, 20th

Edition: February 2003, a publication of Marsh’s Risk Consulting Practice 5



“The Goal”

Achieve regulatory and corporatecompliance (business, safety,

environmental), and ensurereliable use of fixed equipment forfinite run times, by understanding,

identifying, measuring, and

managing risks and eliminatingnon-value adding activities and

costs.



Improvement is Needed

“The 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 Report© 2010



Marsh Report Observations

• …As risk management techniques grow increasingly complex, and oil, gas, and chemical companies continue to seek new ways to managetotal cost of risk, it has become even moreimperative to have a firm grasp on the nature of operational losses that have historically occurred.

Indeed, when planning ahead, one step involveslooking back to the future. No one who has been inthese industries for very long would ever say “that will never happen again!” James R. Pierce,Chairman Energy Practice, Marsh Consulting

• Five year loss totals in the refinery industry havecontinued to trend upwards over the last fewyears. Piping failures or leaks (corrosion orincorrect metallurgy) and start-up and shut-downevents continue to be significant causes.



API 754 – NEW PSM Metrics

Released April 2010



What Are IM ProtectiveBarriers?



Swiss Cheese Model

• Hazards are contained by multipleprotective barriers.

• Barriers may have weaknesses or “holes”.

• When holes align, the hazard passes

through the barriers resulting in thepotential for harm.

• Barriers may be physically engineeredcontainment or behavioral controlsdependent upon people.

• Holes can be latent, incipient or activelyopened by people.



IM PBs in Facility PSMProgram



Examples of Tier 4 Items

• Process Safety Action Item Closure - Percentage and/or number

of past-due process safety actions. This may include items fromincident investigations, hazard evaluations or compliance audits.

• Training Completed on Schedule - Percentage of process safetyrequired training sessions completed with skills verification.

• Procedures Current and Accurate - Percent of process safetyrequired operations and maintenance procedures reviewed orrevised as scheduled.

• Safety Critical Equipment Inspection - Percent of inspections of safety critical equipment completed on time. This may includepressure vessels, storage tanks, piping systems, pressure relief devices, pumps, instruments, control systems, interlocks andemergency shutdown systems, mitigation systems, and emergencyresponse equipment.

• Safety Critical Equipment Deficiency Management - Responseto safety critical inspection findings (e.g. nonfunctional PRDs andSISs). This may include proper approvals for continued safeoperations, sufficient interim safeguards, and timeliness of repairs,replacement, or rerate.

• Management of Change (MOC) and Pre Start-up SafetyReview (PSSR) Compliance - Percent of sampled MOCs andPSSRs that met all requirements and quality standards.



• Improved reliability

• Fewer leaks

• Fewer surprises during turnarounds

• Shorter turnarounds• Proactive behavior = Planning, strategies,

health, safety and business result – From FEEDthrough end of life

• Elimination of non-value adding activities

• Effective life-cycle planning and management of equipment

• Predictable outcomes

• Effective spending

• Better intentional directives

Examples of Best PracticesImplementation & Benefits



Construction CodeASME VIII-1, VIII-2, I, B31.3, B31.1

Commissioning(Baseline Inspection)

In-Service Inspection(Establish Inspection Interval)

Prescriptive (API 510/570/653,NBIC)

Risk-Based (API 580/581,PCC3)

InspectionResults

Fitness-For-Service

API 579/ASME FFS-1

Run/Rerate ReplaceRepair

ASME PCC2

Continue Service T e c h n o l o g y

I n t e g r a t i o n

AnticipatedDamage

Specify Design Conditions and IdentifyDamage Mechanisms (API 571,

WRC 488, WRC 489, WRC 490),Select Materials of Construction

Identify Damage Mechanisms(API 571, WRC 488, WRC 489, WRC 490)

UnanticipatedDamage

Life CycleManagement

of FixedEquipment

Sample components of ASME PTB-2-2009Guide to Life Cycle Management of Pressure

Equipment Integrity

June 5, 2009



Best Practices UnderConstruction

The API Pressure Vessel Inspection Code,510, is undergoing a massive re-write tomake it consistent with the other standardsand capture industry best practices to date.

Construction of the following new referencesis under way:

• RP 583 Corrosion Under Insulation

• RP 584 Integrity Operating Windows• RP 585 Pressure Equipment Investigation

• API 691 RBI of Rotating Equipment



Newly released documents include:

• API RP 580 Risk-Based Inspection, 2nd Edition,November 2009

• API RP 576 Inspection of Pressure RelievingDevices, 3rd Edition November 2009

• API RP 574 Inspection Practices for PipingComponents, 3rd Edition, November 2009

• API RP 572 Inspection Practices for Pressure

Vessels

• API 570 Piping Inspection Code: In-serviceInspection, Rating, Repair, and Alteration of Piping Systems, 3rd Edition, November 2009

Best Practices NewlyReleased



Inspector Certifications

Basic

• 510 Pressure Vessel

• 570 Piping

• 653 Above Ground Storage Tanks

• 936 Refractory

• QUTE



Inspector Certifications

• Advanced Supplemental

– 580 RBI

– 571 Damage Mechanisms

– 577 Welding & Metallurgy

– Meaning of supplemental certifications

• API DB Searchhttp://www.api.org/certifications/ICP/



PEI Management Systems

Inspectioneering® Journal Article SeriesJanuary/February 2010 Issue

Management Leadership and Support for PEI, by John Reynolds



Management Leadership & Support for PEI

Inspectioneering® Journal Article SeriesJanuary/February 2010 Issue

Management Leadership and Support

for PEI, by John Reynolds



PEI Program - 101 ElementsInspectioneering® Journal Article Series Published

• Ammonium Salt Corrosion

• Auditing of PEIM Programs

• Bad Actor Pumps

• Brittle Fracture Prevention

• Carbon – ½ Moly Equipment

• Cathodic Protection

• Cast Iron

• Certification of Inspectors

• Chloride Cracking (External) of Stainless Steel Piping and Vessels

• Contamination of Process Streams(Sudden Inadvertent)

• Corporate Failure Memory

• Corrosion Rate and Remaining LifeCalculations (Timely)

• Corrosion Rate and ProcessCondition Monitoring

• Corrosion Under Insulation (CUI)

• Corrosive Mix Points

• Critical Check Valves

• Dummy Leg Corrosion

• Deadlegs (Inspection of)

• Dew Point Corrosion

• Electric Resistance Welded (ERW) Pipe

and Tubing• Exchanger Bundle Classification

• External Corrosion Prevention

• Inspection for Environmental Cracking

• Gray Zone Equipment

• Fabrication QA/QC

• Failure Analysis

• Fatigue Failures• Field Surveillance

• Fitness for Service (FFS) Analysis

• Flange Bolting Procedures

• Flange Gasket Selection and QA

• Flare System Inspection

• Fraudulent and Counterfeit Materials

• Furnace Monitoring and Inspection

• Handling of Pressure Relief Devices

• Heat Tracing in Safety Systems

• Hot Spots

• Hot Tapping and Welding on Equipment-in-Service

• Hydrostatic Overpressures

• Hydrotest Water Quality

• Hydrotesting Safety



• Idle and Retired Equipment

• Incidents Associated with Installation of Pollution Control Equipment

• Injection Point Inspection

• Inspection Recommendation Tracking

• Inspection Scheduling

• Inspection Procedures

• Inspection Staffing

• Inspection for Inaccessible Locations

• Inspection Record Keeping Systems(Effective)

• Key and Critical (K/C) MaterialsDegradation Variables

• Knowledge Transfer to Operators

• Leak and Failure Investigation Reporting

• Leak and/or Pressure Testing

•

Line of Authority and ManagementLeadership for Inspection

• Localized Corrosion (Inspection of)

• Management of Change (MOC) for PEIIssues

• Materials and Corrosion Engineering

• Material Degradation Risk Management

• Mixed Metallurgy Piping Systems

• NDE Specialists

• NDE versus Pressure Testing

• Non-blowout Proof Valve Stems

•

• On-Stream Inspection (OSI)

• Overdue (Equipment) for Inspection

•

• Paint and Coatings QA/QC

• Participation on Industry

Standardization Committees

• Performance Testing of NDEExaminers

• Pipe Plugs

• Pipe Rack Inspections

• Piping Inspection

• Plugged Vents on Storage Tanks

• Positive Material Identification (PMI)

• Post Weld Heat Treatment• Pressure Equipment and Inspection

Codes / Standards

• Pressure Equipment RegulatoryActivities

• Pressure Relief Device Auditing

• Process Creep




• Qualified Suppliers and Fabricators

• Relief Valve Prepopping

• Repair and Testing Procedures

• Risk Based Turnaround and InspectionPlanning

• Root Cause Analysis, FailureInvestigations, and SolutionDevelopment

• Selection and Placement of CorrosionMonitoring Locations (CML’s)

• Shared Ownership of PressureEquipment Assets

• Small Bore Piping (SBP) Inspection

• Soil-to-Air Interfaces of Buried Piping

•

Structural Inspections• Surface Cleaning for Inspection

• Tank Bottom Inspection

• Temporary Repairs and TemporaryInstallations

• Thickness Measurement Accuracy andReproducibility

• Third Party Owned Equipment

• Total Cost of Ownership

• Training of Inspectors

• Transient Piping Loads

• Tank Roofs (Inspection of)

• Valve Quality Problems

• Water Drop Out Points

• Welding Quality Assurance and QualityControl

• Wire Wrapping / Boxing of Flange Leaks




Managing UncertaintyIntentionally



Additional BenefitsInspection Planning & CBA

-$400,000

-$200,000

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

Unit A Unit B Unit C Unit D Unit E

Current Inspection Costs

Current Maintenance Costs

Total Current Costs

RBI Inspection Costs

RBI Maintenance Costs

RBI Total

Total Savings



LERU RBI Cost BenefitInspection Planning & CBA

Unit TypeCBI

(% Reduced)RBI

(% Reduced)Risk Mitigation

(% Improvement)

431 DIB/Deprop 11 85 74

866 Heavy HDS 2 50 48

867 SRU 21 93 72

231 Gulfiner 22 50 28

531 Amine 30 68 388733 SWS 30 83 53

137 Crude 4 6 2

210B Crude 53 91 38

210C Vac 40 68 28

865 Kero HDS 9 49 40

860 Reformer 35 91 56

862 LERU 17 85 68

864 Unifiner 10 63 53

210A Crude 32 74 42

868 FCC 4 66 62

869 Sulfuric Alky 16 60 44



Inspection Planning

0 2 D A

2 0 1 T

0 2 F A

2 2 9

0 2 D A

2 1 3 T

0 1 E A

1 0 5 F

s s

0 2 E A

2 3 4 s s

0 2 F A

2 1 4

0 2 F D

2 0 2

0 2 E A

2 0 2 A

s s

0 2 E A

2 3 2 s

s

0 1 E A

1 0 5 E

s s

0 1 E A

1 1 2 A

/ E i h d

r

0 2 F A

2 1 3

0 2 E A

2 4 0 A

s s

0 2 D A

2 1 0 B

New

0

500

1000

1500

2000

2500

3000

3500

4000

R i s k ( S q .

F t / y r )

• 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 1.7’sq./year/$$ of risk reduction over 4 years

• Green strategy yields 2.7’sq./year/$$ risk reduction over 4 years

• Net benefit is ~40% improvement in risk reduction

• ROI >> 10X



Gap CheckFixed Equipment Reliability

• Gap Analysis

– FERMI™ Process

• Best Practices

• Observations/recommendations• Roadmap – Strategy

• Cross-functional team with owner/operatorexperience and SME’s

• Trained team members

• Metrics and Priorities – Jointly developed,may also use company HSE risk matrix



Sample FERMI™ Focus Areas

Broad Categories

• Data Management

• Engineering &

Maintenance• Equipment

Planning

• Inspection

Management• Inspection

Planning

• InspectionPrograms

• Metallurgy• Plant Processes

• ReceivingInspections

• Welding andRepairs



Benchmarking

• Working Practices• Procedures

• Understanding

• Utilization of best practices

• Synergies & interdependent practices,processes & programs

• Metrics

• Kudos – Good practices recognized

• Areas of vulnerability• Recommendations for improvement

• Benchmarking metrics



Practices & Implementation

• Scoring is based on a rating from 1 to 5 where:1 = No awareness, nor implementation

2 = Awareness, but not implemented or significantly lowercaliper vs. refining industry common practice

3 = Limited implementation (25%) or modestly lower calibervs. refining industry common practice

4 = Partial implementation (25-90%) or similar to refiningindustry common practice

5 = Totally implemented and part of routine business, similarto pacesetter refinery practices.

• The resulting scores are based both on the

interview results, as well as, the file review.• Each of the subject area statements are also

weighted for relative importance. These weightnumbers are used for the benchmarking of onefacility versus another.



Scoring

• One of the objectives of an assessmentshould be to provide a means of measuringthe FER (Fixed Equipment Reliability)program performance of a facility, initiallyand over time.

• The scoring enables an owner to:

– Compare the facility performance against atop performers

– Measure the change in performance as a

result of closing the identified gaps for eachFERMI focus area

– Compare the site to other company sites andto compare against itself at periodic intervals



Assessment Methodology –File Review

• The file review is performed after the initialinterviews to verify the information obtained throughthe interview process.

• E2G’s specialists have reviewed fixed equipmentgroups and programs from many refineries.

• The mix of subject matter experts and seasonedfacility technical staff are able to not only determineif a particular MI procedure is in use, but are alsoable to determine a relative quality of the writtenmaterial. For instance:

– The interview determines that the facility does have a “root cause” culture. Follow up file review finds that theroot cause analysis was performed, but the conclusionsmade were not reached in a logical manner. Generallythis means that the “obvious, immediate” cause wasdetermined to be the “root” cause.



To keep up-to-date with industry best practices, visit

http://www.api.org

Or better yet, participate and have a “voice” in their

development by visiting the API Fall and Spring Refining

Meetings and becoming a committee member.

Learn more by visiting sites like:

http://www.api.org/

http://www.asme.org

http://www.nace.org

http://www.hse.gov.uk/

http://www.inspectioneering.com

http://forengineers.org

http://www.absa.ca/

http://www.highpressure.jp/english/

Best Practices SampleResources



Greg Alvarado

281-537-8848

www.equityeng.com

Documents

G Alvarado Fixed Equipment