JULY-SEPT 2015 'RZQVWUHDP3URMHFW …petrominonline.com/pub/hcasia/mags/ha070915.pdf · JULY-SEPT 2015 ... 2 HYDROCARBON ASIA, julY-Sept 2015 Visit our website at: 6 REPORTS PV GAS

Serving Asia and the Middle East since 1990

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http://www.safan.com JULY-SEPT 2015 MCI (P) 113/07/2015 • PPS 1064/10/2013 (025508) • ISSN 0217-1112 • Published by AP Energy Business Publications Pte Ltd 19 Kim Keat Road, #04-06 Fu Tsu Building, Singapore 328804. Printed by KHL Printing Co Pte Ltd

India is Net Exporter .... pg 10HT/HP Process Vessels Pitting Repairs .... pg 34Catalyst Feature .... pg 38

Downstream Project Management

25th Anniversary of PVGAS

Dinh Co Gas Processing Plant

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2 HYDROCARBON ASIA, julY-Sept 2015 Visit our website at: http://www.safan.com

6

REPORTSPV GAS Focuses On Developing Vietnam LPG Market PetroVietnam Gas Joint Stock Corporation (PV GAS) is not only the largest Liquefied Petroleum Gas (LPG) supplier in Vietnam but also the dominant player in Vietnam gas market. In 2014, the demand for LPG in Vietnam is about 1.3 million tons and is expected to grow at a rate of 4 - 6% per year in the coming years.

Dung Quat Refinery - The Way Ahead

India a Net ExporterDespite being a net importer of crude oil, India has become a net exporter of petroleum products by investing in refineries designed for export, particularly in Gujarat. Essar Oil and RIL export naphtha, motor gasoline, and gasoil to the international market, particularly to Singapore, Saudi Arabia, the United Arab Emirates , and the Nether lands. Rel iance Industries has also targeted U.S. markets and leased storage space in New York harbour in 2008. However, the government encourages the companies to focus on supplying domestic markets before selling abroad.

Bottom Line Improvements: The Role of First Line Supervision

Platts JKM™ for September-Delivered LNG Jumped 8.3%

Dynamic Scheduling and Risk Management for Turnarounds

Safety on Their Minds

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HYDROCARBON ASIA, julY-Sept 2015 3

We also publish

JULY-SEPT 2015 VOL.25 NO.3

REGULAR FOCUS

Editorial 4

Calendar of Events 50

Advertisers Index 52

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Official Publication for : Reliability, Asset Management & Safety

(RAMS) Conference • Pressure Vessel and Heat Exchange Engineering

Technology Asia Convention • Corrosion Management in Refineries and

Process Plants • FLNG Technology and Unconventional Gas Asia Summit

• Deepwater Technology and Offshore Support Vessel Asia C&E • Onshore Technology Asia C&E

• Jack Up and Semi Submersible Technology Asia Summit • Corrosion

Management, Welding and Composites Technology Asia Convention

The Downstream Grapevine

TECHNOLOGYHT/HP Process Vessels Pitting RepairsCorrosion has been the scourge of the oil and gas industry for a long time. This article illustrates remedies for pitting corrosion.

ZSM-5 Zeolites with Different SARs as RFCC AdditivesThree ZSM-5 zeolites with different SiO2/Al2O3 ratios (SARs) of 33, 266, and 487 were characterized and examined as fluid catalytic cracking catalyst additives for residue oil cracking. The catalytic performances of the ZSM-5 additives were evaluated by ultra-stable Y-zeolite (USY)-based fluid catalytic cracking catalysts in a fixed fluid bed unit. As observed, the cracking of primary olefins was considerably inhibited by increasing the SAR of the ZSM-5 zeolite, thus avoiding substantial loss of gasoline paraffins. The use of ZSM-5 with higher SARs (266 and 487) led to an enhancement in the octane number with minimal loss of gasoline. This enhancement was mainly attributed to the moderate aromatization and isomerization reactivity of the ZSM-5 additives that mainly originated from their relatively small pores and suitable acidic properties with higher SARs.

Fans and Blowers for the Petrochemical Industry

34

46

28

38


Publisher/Executive Editor Eddie Raj

Group Editor Vishnu PillaiTel: 6222 3422 ext: 209email: [email protected]

Advertising Co-ordinatorMary Tel: 6222 3422 ext: 206 email: [email protected]

Subscription/Cirulation JaquilynTel: 6222 3422 ext: 201 email: [email protected]

Conference Co-ordinator Zaman Tel: 6222 3422 ext: 204email: [email protected]

Graphic ArtistChua Ai HwaTel: 6222 3422 ext: 211email: [email protected]

Technical consulTanTs

HARRY VAN DIJK Business Development Manager Shell Global Solutions - Singapore

ediTorial advisory Board

DR. FEREIDUN FESHARAKIPresident FACT Inc.

ENRICO SISMONDOManaging Director - SingaporeMUSE Stancil

TAN CHEE HONGRegional ManagerCustomer SalesUniversal Oil Products Asia Pacific Pte Ltd

PAUL KENNEDYVice PresidentOperationsKBC Advanced Technology Pte Ltd

DAVID TURNERVice President Business DevelopmentKBC Advanced Technology Pte Ltd

TONY ANDERSON Senior Consultant

D. P. MISRAPresidentIndian Institute of Chemical Engineers & MemberBoard of Governors of Engineering Council of India

DAVID ONG Managing Director Excel Marco Industrial Systems Pte Ltd

corresPondenTs

Australia/PNGBrian Wickins

Dhaka, BangladeshGhazi Mahmud lqbal

Beijing, ChinaLi PeizhongWang Yong

Delhi, IndiaSiddharth Raghavan

New ZealandWarner Saville

PakistanDr Salman Saif Ghouri

Editorial Desk

HA

Are We in the Clear…

The last year or so has not been great for the oi and gas sector – stumbling oil pieces, price revivals that expire immaturely, diminish-

ing returns and layoffs have the entire in-dustry edging towards the panic button. However, I believe that the downstream sector has not been ravaged to the point the upstream sector has.

In fact, if it were not for the fact that most big refiners have their fingers in the upstream pie as well, there would actu-ally be optimism in the downstream sec-tor. I’m not the only one seeing things through this filter.

According to Douglas-Westwood, downstream operator budgets will tight-en, but downstream maintenance spend will still see a rise.

Between 2015 and 2019, global down-stream asset maintenance spend is ex-pected to total $322bn, an increase of 12% when compared to the previous five-year period. In 2014, expenditure totaled $63bn for the world’s global downstream asset population of approximately 13,000 facilities, DW expect this to increase to $71bn by 2019. Despite a minor drop in 2015, resulting from industry-wide price deflation of equipment and services and budget tightening, an ageing existing as-set population as well as a number of new installations drive the overall growth.

By sector, Asset Services accounts for the majority of expenditure, 72%, with Asset Integrity accounting for the remain-ing 28%. North America and Asia domi-nate global expenditure, accounting for 35% and 28% of spend over the forecast period respectively. US downstream facil-ities are also expected to see a revival as a result of the recent shale boom.

DW analyses the demand for mainte-nance in two key equipment and serv-ice lines: downstream asset services and downstream asset integrity services, and across four facility types: refineries, petrochemical plants, gas processing and LNG.

In a keynote he presented at the 3rd

Downstream Business, Engineering & Technology Conference in Kuala Lumpur, Malaysia on 15th September, Mr. Abdul Malik Tahir, Managing Director of Energy and Strategy Consulting, commented on how falling oil prices will help improve downstream profit margins as feedstock is cheaper. He also intimated that it is natural that many projects which are dis-cussed and explored to not actually pro-ceed as in-depth feasibility studies show up cracks. Due to the complex nature of downstream infrastructure and the com-paratively (to the upstream) low profit margins many stringent factors have to be met in order to turn a profit; hence dispar-ity between planned projects and execut-ed projects. Thus the disparity is normal and not an indicator.

All in, there is hope then. It may not be the heady days of the mid-noughties but it’s not all doom and gloom. Unfortunately, the downstream sector’s margins are his-torically slim, so there is always caution, especially in the face of a possible nosedive in consumer demand due to economic forc-es. In the words of the British government, we just have to keep calm and carry on.

It would be totally remiss of me to not touch on the upcoming 40th Anniversary of Petrovietnam. The gas-rich country has been slowly but surely been building its portfolio, both in the upstream and down-stream. In conjunction, Petrovietnam will host the Petrovietnam Conference & Ex-hibition 2015 for the purpose and on the occasion of 40 year anniversary of Petro-vietnam, with the theme, “Petrovietnam 40 Years Integration & Development”. The show this time around will be a showcase of Petrovietnam achievements over the last 40 years and its future growth showcase for the next 10 years. It will an enriching ex-perience revisiting down the memory lane and looking forward towards the future of what will be in store for the Vietnam oil and gas industry as whole. I look forward to all our readers supporting one of our re-gional leaders, Petrovietnam.

Group Editor


CompanyFocus

REPORT

PV GAS Focuses On Developing Vietnam LPG Market

LPG was introduced into Vietnam since early 90s of the 20th century, mostly for residential uses with ini-

tial import of only 50,000 tons per year. Since PV GAS put Dinh Co Gas Processing Plant into opera-tion, LPG production has boosted the surging demand for LPG in the local market to 1.3 million tons in 2014 with expected growth rate of 4 - 6% per annual.

Apart from the domestic sourc-es, PV GAS has been planning LPG import to meet the country’s demand. Importing LPG by pres-surized LPG carrier had been the only way of bring LPG into the country until PV GAS introduced the initiative to use LPG vessels as floating storage unit (FSU), mak-ing full use of the vessels alongside LPG transportation purpose. In order to avoid costly expenses for long-term charter FSU, improve the infrastructure of Vietnam gas industry as well as meet long-term demand for refrigerated LPG, PV GAS has invested in building a refrigerated LPG terminal with ca-pacity of 60,000 tons. The terminal which came into operation since 2013 on the shore of Thi Vai river is the first and so far the only re-frigerated LPG storage in Vietnam.

PV GAS has intensely devel-oped a nationwide LPG distribu-tion network, fulfilled its commit-

ments with customers regarding the products’ quality and deliv-ery time, and reinforced the cred-ibility of a leading LPG supplier in Vietnam. Playing its role as the market driver, the company has established flexible sale poli-cies in order to guarantee safety and stability in LPG trading ac-tivities. PV GAS currently holds

70% of the domestic LPG mar-ket share and this percentage will continue to increase thanks to the new domestic LPG production. Expecting the steady increasing demand for LPG in Vietnam, PV GAS has been deploying new LPG manufacturing projects, such as Ca Mau Gas Processing

Plant and Nam Con Son 2 Gas Processing Plant (expected to be in operation in 2017 and 2020 re-spectively). Ca Mau Gas Process-ing Plant has planned to produce about 200,000 tons per year, and its production would increase to 420,000 tons per year in the pe-riod of 2020 - 2030. Nam Con Son 2 Gas Processing Plant is project-ed to increase production from 300,000 tons per year to 500,000 tons per year by 2030. In the near future, apart from LPG from Dinh Co, PV GAS will bring an addi-tional amount of about 700,000 tons of domestic LPG to the mar-ket through these above new projects, maintaining its role as the top LPG supplier in Vietnam.

Advantages with facilities, hu-man resources, LPG sources and business partners have helped PV GAS maintain its position as the leading producer and trader in LPG and the sole importer in Viet-nam with ability to import refrig-erated LPG from abroad.

Not only focusing on develop-ing the domestic market, PV GAS is actively expanding its activities to the international LPG market. The company has regularly ex-ported LPG to Cambodia, Malay-sia, Bangladesh, and Philippines, etc., and became a credible and capable trader in the international LPG market.

CompanyFocus

HA

PetroVietnam Gas Joint Stock Corporation (PV GAS) is not only the largest Liquefied Petroleum Gas (LPG) supplier in Vietnam but also the dominant player in Vietnam gas market. In 2014, the demand for LPG in Vietnam is about 1.3 million tons and is expected to grow at a rate of 4 - 6% per year in the coming years.


CompanyFocus

REPORT

Dung Quat Refinery - The Way Ahead

Dung Quat Refinery, as the first refinery in Vietnam produc-ing up to 30% of liquid en-ergy product consumption in

Vietnam, plays a very important role.

After experiencing obstacles for more than a decade, the refinery was built nearby Dung Quat and Viet Thanh Bays in Quang Ngai Province. The EPC contract was signed in June 2005, ground breaking implemented five months later and mechanical work completed in December 2008. After 44 months from signing the EPC contract, on 22 February 2009, first stream product came out. The refinery was put into commercial operation on May 30th, 2010.

Main units of Dung Quat Refinery were designed to process either 100% Bach Ho crude, a light sweet and par-affinic crude exploited in the southern East Sea of Vietnam, or a mixture 85% Bach Ho and 15% Dubai crude with incorporated capacity being 148 KBD. However, the other remaining units were built for processing 100% Bach Ho only; all types of crude processed in the refinery are light and sweet and most of them are paraffinic grades.

The Refinery's products are Mogas RON 92, RON 95, Diesel, FO, LPG complied with Euro II specifications, Kerosene/Jet Fuel, Polypropylene, Sulfur, and recently Ethanol, in which Mogas and Diesel are primary prod-ucts, about 125 KBD.

The main process units:• Atmospheric Crude Distillation

Unit;• Residue Catalyst Cracking Unit

with Two-Stage Regeneration (R2R Technology) and LCO Hydrotreater Unit licensed by AXENS;

• Full Range Naphtha Hydrotreater, C5-C6 Isomerization (PENEX-DIH), Naphtha Reforming (CCR Platform-ing) Units licensed by UOP;

• Sulfur Recovery licensed by SINI;• The other treating units licensed

by MERICHEM;• Polypropylene Unit licensed by

MITSUI.

Current OperationAfter overcoming a difficult period

of time littered with many operational issues and mechanical problems, the operation of the refinery has become more stable and reliable. On 15 April 2014 refinery achieved Operational Excellence Awards for 600+ days of safe, reliable, and efficient continu-ously operation at 100% capacity from UOP and AXENS.

In line with maintaining stable op-erations, optimizing the refinery has been implemented both in operation and management:• All chemicals and catalysts reviewed

for alternatives• Software packages applied for yield

optimization and crude oil selection• Test runs implemented to increase

refinery throughput, and 110% refinery capacity has been verified with a minor modification, allow-ing the refinery to increase output in favourable conditions

• IT has been totally embedded into the refinery management system

• The quality management systems ISO 9001 certificated in 2011 has fulfilled customer needs and regu-latory requirements. The refinery has applied the environmental management systems ISO 14001, the occupational health and safety management systems OHSAS 18001 and the laboratory management systems ISO/IEC 17025.

ChallengesEmissions standards for engines

(Euro III, IV, and V) will be applied in Vietnam according to the planned roadmap while the original products of Dung Quat Refinery were designed to meet the specifications of Euro II only. This requires Dung Quat Refinery to modify configuration and technology in order to meet new

specifications for petroleum products when environmental requirements become more stringent.

Light and sweet crude sources are declining and are more expensive than sour crudes. Current capacity is below optimum capacity for other complexe;s in addition the ratio of pet-rochemical products to energy prod-ucts is also low (only polypropylene).

Local competition may become more competitive as new refineries and petrochemical complexes such as Nghi Son Refinery, Victory project, Vung Ro Refinery, Nam Van Phong project are coming up. Furthermore Dung Quat Refinery has also faced competition from international markets due to free trade agreements.

AdvantagesAs the first refinery in Vietnam,

Dung Quat Refinery has owned avail-able infrastructure facilities such as a deep water port and a favorable transport system, well-trained per-sonnel, and close relationship with companies which have distribution systems nationwide.

SolutionsTo overcome the above-mentioned

challenges, expansion & upgrading project by 2021, development and integration with petrochemical com-plexes should be carried out as soon as possible. Detailed as follows:• Revamp existing refinery to increase

capacity from 148 to 192 KBD• Install some new units to process

sour crudes mainly from Russia (FSU/CIS) and Middle East. Product specifications comply with Euro V standards

• Add some chemical plants to pro-duce new chemical products such as Linear-Alkyl-Benzene, Co-polymer, Mix Xylenes, MTBE, …

• Integrate with petrochemical com-plexes of Blue Whale Gas Field project

CompanyFocus

HA


Regional Feature

REPORT

India a Net Exporter

I ndia was the fourth-largest energy consumer in the world after China, the United States, and Russia in 2011,

and its need for energy supply continues to climb as a result of the country’s dynamic economic growth and modernization over

the past several years. India’s economy has grown at an aver-age annual rate of approximately 7% since 2000, and it proved relatively resilient following the 2008 global financial crisis.

The latest slowdown in growth of emerging market countries and higher inflation levels, combined with domestic supply and infrastructure constraints, have reduced India’s annual inflation-adjusted gross do-mestic product (GDP) growth from a high of 10.3% in 2010 to 4.4% in 2013, according to the International Monetary Fund (IMF). India was the third-largest economy in the world in 2013, as measured on a purchasing power parity basis. Risks to economic growth in India include high debt levels, infrastructure deficiencies, de-lays in structural reforms, and political polarization between the country’s two largest politi-cal parties, the Indian National Congress and the Bharatiya Janata Party (BJP).

The BJP, elected as the ma-jority party in May 2014 to

Regional Feature

Despite being a net importer of crude oil, India has become a net exporter of petroleum products by investing in refineries designed for export, par-ticularly in Gujarat. Essar Oil and RIL export naphtha, motor gasoline, and gasoil to the international market, particularly to Singapore, Saudi Arabia, the United Arab Emirates, and the Netherlands. Reliance Industries has also targeted U.S. markets and leased storage space in New York harbour in 2008. However, the government encourages the companies to focus on supplying domestic markets before selling abroad.


govern India in the following five years, faces challenges to meet the country’s growing energy demand by securing affordable energy supplies and attracting investment for infra-structure development. Highly regulated fuel prices for con-sumers, fuel subsidies that are shouldered by the government and state-owned upstream companies, and inconsistent energy sector reform currently hinder energy project invest-ment. Some parts of the energy sector, chiefly coal production, remain relatively closed to pri-vate and foreign investment, while others such as electric power, petroleum and other liquids, and natural gas have regulated price structures that discourage private investment.

Despite having large coal reserves and a healthy growth in natural gas production over the past two decades, India is increasingly dependent on imported fossil fuels. In 2013, India’s former petroleum and natural gas minister, Veerappa Moily, announced that his ministry would work on an ac-tion plan to make India energy independent by 2030 through increased fossil fuel produc-tion, development of resources such as coalbed methane and shale gas, foreign acquisitions by domestic Indian companies of upstream hydrocarbon re-serves, reduced subsidies on motor fuels, and oil and natural gas pricing reforms. The cur-rent petroleum and natural gas minister, Dharmendra Pradhan, who took office in late May 2014,

reiterated the goal of making India self-sufficient in energy resources. India is also looking to further develop and harness its various renewable energy sources. These actions would ef-fectively increase India’s energy supply and create more efficiency in energy consumption. India already began implementing oil and gas pricing reforms over the past two years to foster sustain-able investment and help lower subsidy costs.

OilIndia’s government started

encouraging energy companies to invest in refineries at the end of the 1990s, and the investment helped the country become a net exporter of petroleum products in 2001. In particular, the govern-ment eliminated customs duties on crude imports, lowering the cost of fuel supply for refiners. These reforms made domestic production of petroleum prod-ucts more economic for Indian companies. In its 11th Five Year Plan (2007-2012), India’s gov-ernment set the goal of making India a global exporting hub of refined products.

However, India still imports kerosene and liquefied pe-troleum gas (LPG) products for domestic use, and some export-oriented refineries be-gan reorienting production for domestic use in 2009 to help ease shortages of motor gaso-line, gasoil, kerosene, and LPG. These products make up 73% of India’s petroleum product consumption, according to FGE. In particular, many rural areas

of India use LPG and kerosene along with traditional biomass as cooking fuels (see Biomass and Waste below). The govern-ment is encouraging a shift from kerosene used in cooking fuel in rural areas to LPG, a cleaner and less-expensive fuel. Liquid fuels have competed with natural gas in the past few years as the power and fertilizer industries are using natural gas as a sub-stitute for some naphtha and fuel oil supply. Diesel remains the most-consumed oil product, accounting for 42% of petroleum product consumption in 2013.

The refining industry is an im-portant part of India’s economy, and the private sector owns about 38% of total capacity. At the end of 2013, India had 4.35 million bbl/d of refining capacity, making it the second-largest refiner in Asia after China, according to FGE. The two largest refineries by crude capacity, located in the Jamnagar complex in Gujarat, are world-class export facilities and are owned by Reliance Industries. The Jamnagar refineries account for 29% of India’s current capac-ity. These refineries are close to crude oil-producing regions in the Middle East, which allows them to take advantage of lower transportation costs.

India projects an increase of the country’s refining capacity to 6.3 million bbl/d by 2017 based on its current five-year plan to meet rising domestic demand and export markets, although this projection hinges on all proposed projects becom-


Regional Feature

ing operational. Some refinery projects have faced delays in the past few years, and there is now greater competition within Asia from countries such as China that has built large refineries able to process more complex crude oil types. Two refineries, Paradip in Odisha and Cud-dalore in the southern state of Tamil Nadu, are scheduled to be operational by 2015, adding 420,000 bbl/d of capacity. Also, refiners have plans to upgrade several existing refineries to produce higher-quality auto fuels to comply with more strin-gent specifications for vehicle fuel standards. India plans to

adopt the equivalent of Euro IV fuel efficiency standards on a nationwide basis by 2015 and Euro V standards on passenger cars by 2016. Refineries have proposed several expansions to existing facilities and a few new refineries by 2020, although the timeline of these projects depends on economic recovery and fuel sales in both domestic and export markets.

India has increased its total net oil imports from 42% of demand in 1990 to an estimated 71% of demand in 2012. India’s demand for crude oil and petro-leum products is projected to

continue rising, barring a seri-ous global economic recession. Oil import dependence will continue to climb if India fails to achieve production growth equal to demand growth.

The Indian Ocean histori-cally has been a major transit route, bringing crude oil from suppliers in the Persian Gulf and Africa to markets in Asia. Tanker sea lanes pass near Indian waters between major chokepoints such as the Strait of Malacca and the Strait of Hormuz (see the World Oil Transit Chokepoints report). The majority of Indian oil ports are located on the country’s western side to receive ship-ments of crude oil that passes through these routes.

India’s crude oil imports reached nearly 3.9 million bbl/d in 2013, according to Global Trade Atlas. Saudi Arabia is India’s largest oil supplier, with a 20% share of crude oil imports. In total, approximately 62% of India’s imported crude oil came from Middle East countries. The second-biggest source of imports is the Western Hemi-sphere (19%), with the majority of that crude oil coming from Venezuela. Africa contributed 16% of India’s crude oil im-ports. Supply disruptions in several countries, including Iran, Libya, Sudan, and Nigeria, in tandem with India’s growing dependence on imported crude oil, have compelled India to diversify its crude oil import slate. Iran accounted for 5.5% of India’s crude imports in


2013, down from 8.3% in 2011-12 as a result of the U.S. and European sanctions imposed on Iranian oil exports. Also, Indian refiners are trying to reduce crude oil import costs by purchasing less expensive crude oil. Prices of Middle Eastern crude oil grades in the past year have been high relative to prices of oil from the West-ern Hemisphere, prompting Indian companies to im-port more crude oil from Latin America, primarily from Ven-ezuela, Colombia, and Mexico.

Despi te be ing a net importer of crude oil, India has become a net ex-porter of petroleum products by investing in refineries designed for export, particularly in Gu-jarat. Essar Oil and RIL export naphtha, motor gasoline, and gasoil to the international market, particularly to Singapore, Saudi Arabia, the United Arab Emirates, and the Netherlands. Reliance Industries has also targeted U.S. markets and leased storage space in New York harbour in 2008. However, the government encourages the companies to focus on supplying domestic markets before selling abroad.

Natural GasNatural gas mainly serves as a

substitute for coal for electricity generation and as an alternative

for LPG and other petroleum products in the fertilizer and other sectors. The country was self-sufficient in natural gas until 2004, when it began to import liquefied natural gas (LNG) from Qatar. Because it has not been able to create sufficient natural gas infra-structure on a national level or produce adequate domestic natural gas to meet domestic demand, India increasingly relies on imported LNG. India was the world’s fourth-largest LNG importer in 2013, follow-ing Japan, South Korea, and China, and consumed almost 6% of the global market, according

to data from IHS Energy. Indian companies hold both long-term

supply contracts and more expensive spot LNG contracts.

Natural gas con-sumption has grown at an annual rate of 8% from 2000 and 2012, although supply disruptions starting in 2011 re-sulted in declin-ing consumption. Natural gas con-sumption in India was tied closely to domestic produc-tion until imports became available in 2004. In 2012, India consumed 2.1 tril-lion cubic feet (Tcf) of natural gas. LNG imports accounted for about 29% of 2012 demand, and LNG is expected

to account for an increasing portion of demand at least in the next several years as In-dian energy firms attempt to reverse the country’s recent domestic production declines. Increasing LNG imports will depend on the pace of expan-sion in regasification terminal capacity and pipeline infra-structure connecting gas to markets that currently lack access. The country’s pricing system is undergoing revision to unlock regulated prices that are well below the import price levels. Raising gas prices would provide oil and gas firms with economic incentives for


Regional Feature

upstream development, espe-cially in deepwater plays and technically challenging fields, and would allow LNG import-ers to compete more effectively for gas consumers in a higher-priced environment.

The majority of natural gas demand in 2012 came from the power sector (33%), the fertilizer industry (28%), and the replace-ment of LPG for cooking oil and other uses in the residential sec-tor (15%), according to India’s MOPNG. The government has labelled these as priority sectors for domestic programs, which ensures that they receive larger shares of any new gas supply before other consumers. The fertilizer sector, which is highly price-sensitive, has been able to maintain low fuel costs by using natural gas. The recent unex-pected natural gas production declines since 2011 have forced electric generators to seek fuel alternatives, primarily coal. The government is promoting the use of natural gas in the residential

sector as an alternative to LPG as a cooking fuel.

LNGLiquefied natural gas (LNG)

has become an important part of India’s energy portfolio since

the country began importing it from Qatar in 2004. In 2013, India was the world’s fourth-largest LNG importer, import-ing 638 Bcf, or 6%, of global trade, according to data from IHS Energy. Petronet, a joint venture between GAIL, ONGC, IOC, and several foreign firms, is the major importer of LNG supplies to India. Petronet owns two existing LNG ter-minals, Dahej (480 Bcf/y) and Kochi (120 Bcf/y). Shell (74% share) and Total (26% share) jointly own the Hazira terminal (240 Bcf/y), which operates as a merchant facility, importing only short-term and spot car-goes at present. India’s total regasification capacity now stands at 936 Bcf, and terminal owners have proposed capac-

ity expansions at all existing terminals. Expansion under construction at Dahej will in-crease the terminal’s capacity to 720 Bcf by 2016.

Indian companies are investing in new regasifi-cation facilities to meet the country’s rising natural gas demand. India was the world’s fourth-largest liquefied natural gas im-porter in 2013

Unexpected production de-clines in India’s KG-D6 gas field mean the country must rely on higher LNG imports. Average imported LNG prices have increased to three times the price of domestically pro-duced natural gas because they are not subject to the govern-ment setting prices through the Administered Price Mecha-nism (see Sector Organization). Indian producers such as RIL have asked the government to raise the wellhead price for gas (the wholesale price at the point of production) as a way of justifying investment into deepwater projects. If the proposed gas pricing reform is implemented, there will be greater investment incentives for domestic gas development that could increase competition for LNG imports.

Indian companies have invest-ed in increasing the country’s LNG regasification capacity in recent years to meet rising demand. In early 2013, GAIL, NTPC, and several other small-er players restarted the Dabhol


project, originally proposed by now-defunct Enron, which includes a regasification ter-minal to fuel three gas-fired power stations. Dabhol LNG also ships natural gas to south-ern India through the new pipeline to Bengaluru. GAIL is installing a breakwater facility to double Dabhol’s capacity by 2017. Petronet’s LNG terminal at Kochi was commissioned in late 2013. However, the terminal is experiencing low utilization because of delays in the approval and construc-tion of a proposed pipeline to Mangalore and other parts of southern India, according to PFC Energy. The eastern side of India lacks pipeline infrastructure and gas sup-ply following declines in the KG basin; thus companies are quickly planning terminals to come online in the next few years . IOC proposed the Ennore project in Tamil Nadu in southeastern India. Other proposed projects are located along India’s eastern coast include three floating terminal projects at Kakinada and one at Gangavaram. Sev-eral proposed regasification projects along the western coast include GSPC’s Mundra terminal in Gujarat, expected to be built by 2016.

Qatar ’s RasGas is India’s sole long-term supplier of natural gas, with two contracts for a total of 360 Bcf. In 2013, Qatar was the source of 84% of India’s total LNG imports, according to IHS Energy. India has been an active importer of

spot cargoes following inter-ruptions in the KG-D6 field pro-duction after 2010 and began receiving LNG cargoes from a variety of exporting countries. Nigeria, Egypt, and Yemen have become India’s largest short-term LNG suppliers.

Indian LNG importers ac-t ively sought supply from various new LNG sources and signed several short- and long-term purchase agreements in the past few years. India signed agreements to receive supply from Australia’s Gor-gon LNG terminal and several U.S. terminals (Sabine Pass, Cove Point, and Main Pass) and from the portfol io of various global LNG suppliers such as BG, GDF Suez, Gas Natural Fenosa, and Gazprom. As Indian companies become more active in pursuing over-seas upstream oil and gas plays, OIL has invested in gas projects in Canada (Pacific Northwest LNG) and an off-shore gas project in Mozam-bique (jointly with ONGC) to secure LNG imports for India.

ReferencesAsia PulseAssociated PressBBCBusiness StandardCensus of IndiaCIA World FactbookEconomist Intelligence UnitEnergy EconomistFACTS Global EnergyFinancial TimesGas Authority of India Lim-ited (GAIL)Global Insight

IHS EnergyIndia Oil Corporation (IOC)Indian Chamber of CommerceIndian Ministry of Coal and MinesIndian Ministry of New and Renewable EnergyIndian Ministry of Petroleum and Natural GasInternational Energy Agency (IEA)Lloyd's List IntelligenceNuclear AssociationNuclear Power Corporation of IndiaOil and Gas JournalOil India LimitedPetroleum EconomistPetroleum Intelligence WeeklyPFC EnergyPIRAPlatts EnergyReliance Industries Ltd.ReutersThe HinduTimes of IndiaU.S. Energy Information Ad-ministrationWorld Gas Intelligence HA

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Project Management

Feature

Bottom Line Improvements: The Role of First Line Supervision

I n times of slow growth, the pressure on managers to reduce costs and focus their efforts on productiv-

ity is particularly high. During periods of slow growth rate or of turbulent times - as we experience now with China trying to stabilize its currency and prevent the onset of an eco-nomic downturn - companies must take all possible steps to ensure that their processes and staff are operating at the highest level of productivity. In the context of capital intensive industries, the role of the First Line Supervisor in achieving Operational Excellence is of vi-tal importance and yet is often overlooked and undermined by a lack of investment of the part of companies.

In this paper, the issues sur-rounding First Line Supervision will be discussed. Beginning with the expectations and per-ception of FLSs, the paper will highlight some common mis-takes made by Managers and Supervisors alike, before outlin-ing steps managers can take to ensure that FLSs contribute to real efficiency gains, translating into bottom line profit.

A Pivotal RoleThe position of FLS within

any organization is pivotal. Not only is he expected to translate management deci-sions into practical actions and then implement them, but also to organize work for his team, set objectives and then follow up to ensure plans are achieved. Operating at a level between management and the execution workforce, an FLS needs to be a team leader and motivator, technically skilled and competent, as well as a good communicator. It is one of the most demanding day to day positions at a plant, and yet frequently, FLSs are usually the most ill-equipped to assume their responsibilities.

There are multiple reasons for this. First, most FLSs are promoted up “from the ranks,” having shown technical exper-tise, or by length of service, sometimes by having show-ing leadership potential. As a result, in their new position, they are required to manage colleagues with whom they pre-viously worked and ensure that the work they do is completed well and on time. Second, they

are asked to do a huge volume of tasks and are often not sure which tasks form part of their remit. Third, they are rarely provided with the right tools or the training to do their jobs, so they simply do not know how to manage a team of people, how to ensure productivity levels are maintained or improved or how to use systems to follow up and ensure no lost time. Caused by a lack of investment on the part of managers to properly train and develop their FLSs, the perception of what the role entails varies widely from the point of view of the FLS himself and managers.

Varying PerceptionIn the context of Maintenance

organization, during the initial assessment, our project team typically conducts a survey whose objective is to establish what the perception of the FLS and the Manager was concern-ing the percentage of time spent doing a number of key tasks, such as conducting feedback, follow up and confrontation. As you can see in Figure 1 - which represents a typical example - there is a marked difference between what Supervisors do,

REPORT

Project Management

Feature


what they think they do and what they would like to do. If we look at the Observed row for example, only 6% of an FLS’s time is spent on active supervi-sion, interacting with his team in the field, but he perceived that time to be around 22%, while recognizing he would like it to be around 28%. If we consider administration, the perception of the FLS is closer to reality, and yet still not accurate, while time spent coaching would again ideally increase, but does not occur in practice.

This difference between what a FLS wants to do, what he thinks he should do and what he actually does stems from the lack of a clear defi-nition and understanding of what his roles and responsi-bilities are. During the same survey, supervisory behav-ior was measured during a number of tasks, ranging from

Making Assignments, Giving Directions and Follow Up to Providing Feedback and Re-porting. The results showed that active behavior was not demonstrated at all when it came to providing feedback – regardless of whether that feedback was positive or nega-tive. When questioned as to why that was, the FLSs under-stood that providing feedback was absolutely necessary, but they did not consider it to be part of their job, someone else had to do it.

The same survey then meas-ured the tools available includ-ing Schedule Control, Variance Management, Review Meet-ings, Operating Reports and Perfect Day. Again, when it comes to having the right tools available, the survey showed that FLSs are rarely equipped to carry out their tasks. The ability to “Walk the Floor”

for example, checking if tasks have been completed on time and if not, why not, was rarely demonstrated. Likewise the ability to handle and conduct meetings and operating re-ports was low. Without these tools, it will be extremely dif-ficult for FLSs to demonstrate the right behavior.

The Perfect DayThe empowerment of the

supervisor's role during the execution of the work involved in supervis ing third par-

t ies i s a b ig step forward i n v a l u i n g the skills and knowledge of the supervisor. M a n a g e m e n t tools tailored to individual s u p e r v i s o r y needs followed by training as well as skills deve lopment and shop floor coaching com-pleted the set of solutions. In

order to respond positively to a series of process and system enhancement opportunities, the concept of 'active supervision' needs to be introduced and suc-cessfully implemented.

By showing presence on the shop floor, active supervision is a means of making sure that work is being done at the


Project Management

Feature

right time, in the best way by applying strictly-set safety rules through planned actions and with an adequate short interval follow-up. Applied correctly, active supervision is the key to reacting quickly to avoid or rectify problems, to measure progress and to realise a set work plan within a given timeframe.

When it comes to exhibit-ing the right level of interac-tion with their crew or with contractors’ crew, FLSs must understand what a “Perfect Day” should look like and how to go about getting the right performance from their team. Many only interact with their crews at the morning meeting where the day’s work is as-signed and sometimes at the end of the day. They have no genuine perception of whether the work was accomplished or not, was executed at maximum efficiency or of any impedi-ments the crew encountered.

As a result, training will need to be provided to help them understand the actions required of them. This will be-gin with first interaction with their respective crews after the day’s work has been assigned to ensure work has begun as planned and no major issue is foreseen. At least two other contacts or interactions in the field are also necessary before lunch time to ensure progress and re-assign the teams if needs

be and by mid-afternoon, to provide feedback to the sched-uler and to prepare for the next day schedule and the end of day review with Production.

Their interaction with the crew(s) during these rounds should be geared towards making certain the work has started as planned, permits are in-hand, parts / materials are onsite. It allows the FLS to clear barriers and obstacles. During these rounds the FLS also needs to check to see if the work is progressing according to the expectations of the daily schedule, i.e., a four hour job is not taking six or eight hours. If there is variance, he will understand the root cause and will be able to feed-back to the planner, so the methods or standards could be updated for the next time similar work is to be completed. If the crew is aware the FLS will be stopping at the job three or more times a day, they will tend to progress the job as planned, and contact / report the FLS immediately if they encounter any difficulties.

Performance ManagementOnce an FLS has been prop-

erly trained and is making progress with his daily re-sponsibilities, further training should be provided to enhance his managerial skills. A com-bination of internal and external training could be provided according to in-house capabili-ties and be selected according

to the role the individual will likely play in the company go-ing forward.

Then, Managers should agree Key Performance Indicators with FLSs which define their goals and where work needs to be done. The FLS in turn should be shown how to agree KPIs with his team and to dis-cuss barriers to success with workers on a regular basis. For example, if the lack of a work permit was prevented a scaffolder from erecting scaf-folding on time, listening to the scaffolder and understanding the reasons for the work permit delay is fundamental to the smooth functioning of the team and to maintenance systems. Staff should be encouraged to communicate their knowledge as to the reasons for delays and issues so they can be ad-dressed swiftly.

Operational ExcellenceWhen it comes to the impor-

tance of an FLS on Operational Excellence (OE) initiatives, en-suring that FLSs have the right tools to do their jobs is critical. Roles and responsibilities need to be clarified, tools and proc-esses made available and train-ing and coaching conducted so that the FLS can ensure that all work is carried out on time and according to plan. This includes ensuring that robust Maintenance processes which cover Planning, Scheduling, Supervision and Reliability


are in place, and that each step is clearly explained and a definition of RACI provided.

In our experience, companies that com-mit to investing in t h e i r F L S s r e a p valuable rewards. First, the increased capacity of the FLS to manage his team will contribute to the ef-ficiency of the execu-tion workforce – both internal and external – which results in increased produc-tivity and reduced inefficiencies. As a typical example of what we observe in the chemical industry, the implementation of the above changes to FLS ca-pability resulted in a reduction of non-value added time of 45 minutes at the start of the day, while also bringing the Average Start Time forward. Working together with his team, the particular FLS responsible had successfully removed barriers which were delaying work per-mits, slowing down the arrival of workers onsite and increased motivation due to transparent decision making.

If we look at how these changes can translate into bot-tom line gains, the average jobs completed per day increased from just about 3 to over 4. The direct effect of such changes on

maintenance cost is visible: here the reduction of circa 20-25%

of the day-to-day maintenance costs is noticeable after the first year of the implementation of the FLS in his new role, with adequate tools and training.

In conclusion, the importance of FLS capability to the success of site teams should not be underestimated. While com-mitting to investing in training and managerial development may seem expensive at the start, the savings made as a result are worth more than the origi-nal outlay. Teams will remain motivated and repair durations will be reduced and quality of work will be improved, with less re-do. As a mindset, Pro-ductivity, Quality and Safety go together, improving the safety of employees and ultimately,

HA



all contributing to bottom line improvement.

This publication thanks Philip Morel, Managing Partner Asia, T.A. Cook Consultants for providing this article, which was pre-sented at the Downstream Business, Engineering & Technology Conference in Kuala Lumpur, Malaysia on 15th September, 2015.


Demand -Supply

REPORT

Platts JKM™ for September-Delivered LNG Jumped 8.3%

Prices of spot liquefied natural gas (LNG) to northeast Asia averaged $8.007 per million British

thermal units (/MMBtu) for September, according to latest Platts Japan/Korea Marker (Platts JKM™) data for month-ahead delivery.

The figure reflects the daily

JKM assessment published by Platts, a leading global en-ergy, petrochemicals and met-als information provider and a premier source of benchmark price references, between July 16 and August 14, expressed as a monthly average.

At $8.007/MMBtu, the Sep-

tember monthly average price had reached its highest level since February 2015, when prices had averaged $9.911/MMBtu. Prices were largely

supported by portfolio suppli-ers and traders still looking to optimize deliveries across the Atlantic and Asia Pacific basins, or backfill short positions for delivery in September.

The marker had also posted its

largest month-over-month gain of the year so far, rising 8.3% from August -- which had aver-aged $7.395/MMBtu -- as prices rallied from $7.825/MMBtu to $8.20/MMBtu by mid-month, on the back of this firmer buy-ing interest.

The bulk of spot deals were

concluded between portfolio sellers and traders, with most looking to supply cargoes into numerous ongoing buy tenders in India and the Middle East.

“Emerging demand in the

Atlantic basin provided some

support to the JKM, while the narrow arbitrage between the JKM and UK onshore National Balancing Point NBP futures meant that suppliers remained keen to optimize their positions in both basins,” said Stephanie Wilson, managing editor of Asia LNG at Platts. “However, demand from end-users in northeast Asia remained very slow and sentiment took a bear-ish turn once shorts were filled, more supply was announced and Brent crude oil values dipped again.”

Prices trended down from the $8.20/MMBtu peak to $8.00/MMBtu by the close of the trading month as a result. This stimulated further demand from Indian importers, result-ing in a spate of deals around the $8/MMBtu mark in the last trading week.

Demand - Supply


This is the seventh consecu-tive month that JKM prices have been range bound between $7-8/MMBtu since declining from the $9-10/MMBtu level seen over January and February delivery.

Year over year, the JKM for September-delivery was down 25.2%, the slowest decline of 2015 so far, with Septem-ber 2015 average prices at $10.702/MMBtu.

Meanwhile, the price of pos-sible competing fuel thermal coal also decreased 18.0% year over year, while fuel oil was also down 52.2% from the same month in 2014. HA



HydrocarbonAsia thanks Platts for this report. The Platts JKM™ is an assessment of LNG prices for spot cargoes delivered to Japan and South Korea, based on the most recent trades and/or bids and offers from buyers and sellers in the open market prevailing at the close of the trading day. The monthly JKM as-sessments are month-ahead delivered prices and are an average of the daily JKM price assessments reported by Platts.


Demand -Supply

REPORT

Dynamic Scheduling and Risk Management for Turnarounds

When asked about the quality of their sched-ules, many turnaround managers complain

that their schedules are not reli-able enough, are incomplete and do not properly capture the ever-developing circumstances of the execution of a turnaround.

Alternatively, they state that the document is far too compli-cated, overly layered with activi-ties and tasks and thus becomes somewhat redundant in terms of usage, as it is just too big to maintain with any confidence. Either way, the schedule fails in its role as the key driver to actively manage and control the full event.

This article lays out the reasons why most schedules fail and a number of steps Turnaround and Project Managers can take to build a successful schedule which in turn can deliver a smooth and punctual turnaround.

Static Scheduling FlawsOne of the key reasons that

schedules are undervalued is that they are used only as a static schedule and so cannot reflect the developing and dynamic nature of a live turnaround. In simple terms, the schedule reflects the initial plan but not the actual delivery.

Consequently, the further into the execution you go, the more the schedule becomes redundant. It could be a question of the chicken and the egg - where either a re-stricted amount of detail or far too much detail mean that the document is badly constructed. Equally, it could be a self-fulfilling prophecy, where the TA manager has never used a schedule to ac-tively manage the event and so continues not to, whatever the quality of the document.

If Turnaround (TA) Leaders are prepared to embrace a structured, controlled and comprehensive approach to building, utilising and managing a schedule, the dynamic methodology can make a significant difference to the suc-cess of their turnarounds.

Preconditions for Dynamic Scheduling

Schedule quality is paramount for dynamic scheduling to be successful. It is essential that scheduling principles, standards and quality need to be defined in a concept well in advance of actually creating the schedule.

The Schedule Concept is es-sentially an agreement between all stakeholders that defines the way in which the schedule will be developed, managed and utilized. Decisions about the

schedule structure, levels of detail required, management of risk and schedule uncertainty, level of integration as well as roles and responsibilities of key stakehold-ers need to have been identified, defined and agreed by all major stakeholders. That could include TA Management, Operations/Process, Engineering, End-Users (Contractors), Lead Planners and Lead Schedulers. Note that the schedule is not typically geared to perform as a financial control document. It should be regarded as an activity/time/resource control tool.

Leadership must ensure that the organisation is capable and resourced to develop the “front-end”. Too often, resources are not released or engaged, planning is left too late and subsequent sched-ule quality suffers massively. In addition, schedule structure and execution organization structure will need to be aligned to enable meaningful progress reporting and associated daily decision making. In simple terms, roles/responsibilities and reporting processes need to be assigned and agreed. Schedule creation and development should be in line with the principles laid out in the concept. Frequent reviews to ensure that the schedule will be developed on time and in line with pre-defined quality stand-Project

Management Feature


HA

ards are crucial. Typical quality issues such as too many layers of detail of task per activity (planning breakdown simply copy/pasted into schedule); orphaned activities (i.e., activities with no predeces-sor or successor); actions with no allocated resources; and a high quantity of constraints such as fixed dates, lags, leads and lack of standardized milestones are likely to lead to a schedule that cannot be used for daily decision making during turnaround execution.

Additionally, ensuring that schedules are fully integrated by including all event activities such as all Operations tasks and all capital projects will dramatically improve the chances of it surviv-ing execution. For example, by detailing the phased shutdown process, optimal utilization can be achieved by allocating resources as early as possible to each stage of the shutdown/start-up processes, and any delay implications can be recognized and taken account of immediately.

Dynamic Execution and Optimization

Optimizing the schedule is an iterative process that involves various aspects. The critical path, resources, network and simultane-ous operations must all be taken into account if the schedule is to be fully optimized. Considering that risks are always present and that the risks may change as time moves on, it is crucial that they are also realistically and regularly evaluated to establish their most likely impact on the schedule completion date.

Sticking to a deterministic end date that has been dictated purely

by the critical path and excludes a realistic understanding of risks involved can result in the sched-ule portraying an unrealistic and unachievable project end date.

Finally, the schedule owner and execution contractors must ensure there is a continuous update of reliable live progress information into the schedule during execution. Status reporting, reviewing and prioritizing updates accordingly and then communicating them to the execution team is vital so that the inevitable obstacles or changes can be accommodated and do not cause unnecessary delays or breaks. Minimising any surprises – whether big or small, knowing of them in good time and being able to take a decision earlier rather than later, is one of the keys to delivering the TA successfully.

Disciplined ReportingThis involves ensuring that a

workable and very well disci-plined daily routine is established in terms of reporting progress, updating the schedule, adjusting/agreeing priorities and communi-cation through a series of planned daily turnaround meetings is in place. Without a rigorous daily time discipline for reporting and updating, agreeing and com-municating, all the hard work in developing the schedule will have been a waste of effort.

As long as all stakeholders stick to the concept, from design and development of the schedule to a well thought through daily re-porting and updating regime, the schedule should be more usable, reliable and a true reflection of what is actually happening out in the field. That means that it can

be used with confidence to drive the execution activity and make decisions, rather than just as a secondary reporting tool.

A Principled ApproachDynamic scheduling doesn’t

have to be difficult; it is simply the application of a principled ap-proach to schedule development and management. Its foundation relies upon a deliberate mind-set within TA management that the schedule will be the daily key driver during execution. For that to happen, TA management has to have confidence in the design and implementation of the “Schedul-ing Concept”. If managers and schedulers are willing to challenge the status quo and commit to a scheduling methodology that is clearly defined from the outset and allows for improved schedule flexibility during execution, the chances of achieving a successful turnaround are infinitely higher.

Finally, the implementation of lessons learned involving the schedule utilisation will improve the chances of a well-planned, well laid-out, useable, reportable, flex-ible and therefore dynamic sched-ule for the next TA. Failure to learn from the last TA is the easiest way to ensure a repeat performance of all that was wrong next time round.

This publication thanks Mr. Dirk Traeger, CEO, T/ANGO Turnaround Management Group for providing this arti-cle, which was presented at the Downstream Business, Engi-neering & Technology Confer-ence in Kuala Lumpur, Malaysia on 15th September, 2015.


ProcessSafety

Safety on Their Minds

Universit i Teknologi PETRONAS recently signed a Memoran-dum of Understanding

(MoU) with Center for Chemical Process Safety (CCPS). The col-laboration will cover a variety of

activities, including technology transfer and sharing through short courses and certificate programs, cooperation on in-dustrial contract research, joint-hosting of scientific forums and conferences, and other projects of mutual interest in relation to the areas of process safety.

The collaboration will cover various academic and research activities, which include tech-nology transfer and sharing through short courses and certificate programmes, joint services on industrial contract research, joint event hosting for scientific forums and con-ferences and other activities or areas of mutual interest for both parties.

The MoU was signed by UTP Vice Chancellor, Datuk Ir (Dr) Abdul Rahim Hashim and CCPS Asia Pacific Regional Manager, Mr Umesh Dhake on behalf of the two organi-sations.

"The university, through its Centre of Advanced Process Safety (CAPS), is proud to have this opportunity to collaborate with CCPS, the top Process Safety Centre recognised by industries worldwide. The signing of this MoU is another important milestone for UTP as it will become one of the very few selected universities in the world to have such collabora-tion with CCPS,” said Datuk Abdul Rahim.

“This MoU is a responsible collaboration between UTP and CCPS to enhance stakeholder’s process safety knowledge. It provides a way forward to bring The American Institute of Chemical Engineers (AI-

ChE), CCPS initiatives and programmes at a university level in Malaysia. The MoU also provides us a mechanism to develop new projects at regional level. On behalf of CCPS, I would like to assure

our commitment and fullest cooperation to UTP for such initiatives,” said Umesh Dhake.

In announcing the coopera-tion, Shakeel Kadri, Executive

REPORT

ProcessSafety


Director of CCPS, said, “This MoU between UTP and CCPS will enhance collaboration with stakeholders and improve process safety knowledge

across many industries. The collaboration will bring the American Institute of Chemical Engineers’ and CCPS’s ini-tiatives and programs to the

university level in Malaysia, and provides a mechanism to develop new process safety initiatives in the Asia Pacific region.”

About Universiti Teknologi PETRONAS

Universiti Teknologi PET-RONAS (UTP) was estab-lished in 1997 and has grown to be one of the most promi-nent private universities in Malaysia. UTP offers wide range of industry-relevant engineering and technology programmes at undergradu-ate and postgraduate levels.

UTP has produced more than 10,000 graduates and currently has an enrolment of over 6,000 undergradu-ates and 1,200 postgradu-ates from more than 50 countries around the world. UTP complements its en-gineering and technology programmes with quality education in the areas of management and humani-ties, with the aim of produc-ing well-rounded graduates with excellent leadership qualities and communica-tion abilities.

UTP is the only private university in Malaysia to be rated a 4-star institution by Quacquarelli Symonds (QS), with a maximum five-star rat-ing in five areas out of eight, namely employability, inter-nationalisation, innovation, facilities and access.

UTP also maintains its rank-ing in the top 200 for the 2015 QS World University Ranking by subject for Chemical Engi-neering, with the additional of three new subjects including Electrical & Electronic Engi-neering, Mechanical Engineer-ing and Computer Science & Information Systems have positioned themselves in the world ranking.

UTP is the only private university in Malaysia to be ranked in the top 200 for the 2014 QS Asia University Rank-ings and ranked at 335 for the QS World University Rankings under Engineering and Tech-nology Faculty.

UTP continues to provide distinctive educational op-portunities to its students with the rating of Tier 5 (Excellent) University for SETARA (Rat-ing System for the Malaysian Higher Education Institu-tions) and achieved Tier 5 for D-SETARA (Discipline-Based Rating System) in engineering.

UTP also places strong emphasis on Research and Development as it strives to achieve the status of an inter-nationally renowned Research University. The university conducts extensive research

activities in collaboration with PETRONAS and other institutions and industries locally and abroad focusing on nine niche areas which are Enhanced Oil Recovery, Carbon Dioxide Manage-ment, Deepwater Technol-ogy, Nanotechnology, Green Technology, Biomedical Technology, Hybrid Energy Systems, Intelligent Cities and Sustainable Resources. This is evident when UTP was awarded a 5-star rating by Malaysian Research As-sessment Instrument for its research, development and commercialisation ef-forts recently.

In October 2014, UTP’s Centre of Excellence (COE), Centre for Intelligent Signal and Imaging Research was recognised by the Ministry of Education as the National Higher Institution COE fo-cusing on biomedical image analysis with neuro chemi-cal imaging as its research niche area.

Besides CISIR, UTP Cen-tre of Innovative Nanos-tructures and Nanodevices, was also recognised as a national COE by Science, Technology and Innovation Ministry in 2011.


ProcessSafety

CCPS is a not-for-prof-it, corporate membership organization within AI-ChE that identifies and addresses process safety needs within the chemical, pharmaceutical, and pe-troleum industries. CCPS brings together manufactur-ers, government agencies, consultants, academia and insurers to lead the way in improving industrial proc-ess safety.

CCPS member companies, working in project subcom-mittees, define and develop useful, time-tested guide-lines that have practical application within industry. The project topics run the gamut of areas important to manufacturers and range from human factor issues to qualitative and quantita-tive risk analysis to security vulnerability to inherently safer design. With over 100 publications to date, CCPS remains at the forefront of issues relevant to industry.

UTP established the Centre of Advanced Process Safety in July 2014, to extend the univer-sity’s pursuit of process safety knowledge and expertise. CAPS is now developing strategic partnership with industries, government bodies, regulators and international institutions to align its program with the industrial needs of the region. Additionally, Malaysia’s Dept. of Occupational Safety and Health has appointed CAPS to help

revise and improve of the coun-try’s 1996 Control of Industrial Major Accident Hazards regula-tions, by incorporating process safety management elements.

The centre, headed by Prof Dr Azmi Mohd Shariff, began research in process safety in 2003. Since then, a number of postgraduate students had graduated in the areas of risk assessment, inherent safety, fire hazard analysis, toxicity and process safety management.

A number of journals and conference papers have been published in similar areas. CAPS has completed a number of in-dustrial projects and conducted a series of short courses in the areas of Quantitative Risk As-sessment and Electrical Safety and Operability Review.

CAPS was appointed by the De-partment of Occupational Safety and Health Malaysia to conduct a Regulatory Impact Assessment on the revision and improvement of Control of Industrial Major Ac-

cident Hazards (CIMAH) regula-tions 1996 by including process safety management elements.

CAPS is currently working

together with the Chemical En-gineering Department of UTP to offer MSc in Process Safety pro-gramme in early 2016. Strategic linkages and partnership have been established with industries, government bodies, regulators and international institutions to align this programme with the industrial needs.

Meanwhile, CCPS was formed by The American Institute of Chemical Engineers (AIChE) in 1985, with the vision to bring the best process safety knowl-edge and practices to industry, academia, the government and the public around the world through collective wisdom, tools, training and expertise.

Since 1984, CCPS has helped industry develop tools to keep workplaces and communities safer, even as technology and


businesses have become more complex. CCPS continues to ad-dress the most important process safety needs and encourage an overall culture of process safety. Over 100 members now partici-pate in CCPS, including most of the world’s leading chemical, pe-troleum, pharmaceutical and re-lated manufacturing companies.

CCPS brings together manu-facturers, government agencies, consultants, academia and insur-ers to lead the way in improving industrial process safety. CCPS’ extensive body of work marks the progress made in these ar-eas and it continues to expand a catalog of over 100 books and products, build on a legacy of 21

successful international confer-ences and cultivate the Safety in Chemical Engineering Education (SAChE) university curriculum programme. With over 100 pub-lications to date, CCPS remains at the forefront of issues relevant to industry.

The first activity that UTP and CCPS will carry out jointly is their co-organizing of the 2015 Global Summit on Process Safety. The summit will be the first global process safety conference conducted in Malaysia and the second in Asia Pacific region, and will be held November 3–5, 2015, at the Hotel Istana in Kuala Lumpur, Malaysia. As the co-host of the summit, it will position UTP HA

in process safety area and create opportunity for strategic linkages and partnership with industries, government bodies, regulators and international institutions. UTP was offered by CCPS when CAPS team visited them in New York last year for a discussion on potential collaboration in Process Safety. During the meeting, Mr. Scott Berger and his team have of-fered UTP to be a partner to organ-ize the 2nd CCPS Global Summit in Kuala Lumpur. CCPS sees that UTP has the required capability to co-organize the conference as UTP is a well-known academic institution in this region that has a high interest in process safety supported by a big O&G national company, PETRONAS.

CAPS has established R&D capability in 3 main areas: 1. Risk Management espe-

cially in hazard identifica-tion tools, consequence analysis for fire, explosion and toxicity, etc.

2. Technical Process Safety with the focus on the devel-opment of PSM prototype & tools, hazardous proper-ties, etc.

3. Design Integrity such as Inherently Safer Design, Mitigation system, etc.

Strategies:• Provide opportunities for

the pursuit of knowledge and expertise through advancement of Process Safety for the betterment of industry and mankind

• Collaborate through strate-gic alliance with renowned institutions to enhance in-dustrial workforce compe-tencies related to managing hazardous processes

• Build close partnership with industries to inculcate safety culture and provide innova-tions and solutions for loss prevention

• Cooperate with relevant national authorities and institutions to increase Proc-ess Safety knowledge and awareness amongst public

Approaches:• S t re n g t h e n e d u c a t i o n

through undergraduate, post graduate and short courses to cultivate process safety culture

• Lead research in advanced risk and safety management for loss prevention

• Develop state-of-arts facili-ties for research and consul-tancy

• Support major industries in managing process safety through consultancy services

• Support government agen-cies in development of standards, procedures, etc on

process safety in Malaysia• Organize conference, semi-

nars and public lecture for sharing knowledge to the public and professionals in process safety

Way Forward:CAPS has developed a

comprehensive Road Map with the vision to become a HI-COE and industrial part-ner of choice in Process Safety by 2025.

Some of the major activi-ties are:- Development of MSc in

Process Safety and certifica-tion programs which plan to be offered in early next year.

- Collaborations with in-dustries and institutions: MKOPSC, CCPS, DOSH, NIOSH, IChemE

- Establishment of Consor-tium Membership to sup-port industries in the area of process safety.


Downstream News

SOUTHEAST ASIA

INDONESIA

Pertamina Plans To Spend $25bn to Upgrade Refineries

Pertamina is reportedly plan-ning to upgrade its four oil re-fineries in Indonesia with an

investment of $25bn, to meet increasing demand for crude oil refinery. As part of the project, the company will upgrade re-fineries in Cilacap, Central Java; Balikpapan, East Kali-mantan; Balongan, West Java; and Dumai, Riau. Pertamina processing director Rachmad Hardadi was quoted by Tempo.co as saying that the upgrades are scheduled to be carried out until 2021.

The company intends to un-dertake the project in collabora-tion with strategic partners, and will be the majority stakeholder. Earlier, Japanese firm JX Nip-

pon Oil and Energy and Saudi Aramco have expressed interest to participate in the project. The Balikpapan refinery upgrade is planned to be carried out in part-nership with Japan's JX Nippon Oil and a deal will be finalized in November, reported Jakarta Post. The project is expected to increase the refinery's produc-tion capacity to 360,000 barrels per day from the current 260,000 barrels per day.

Pertamina operates six refin-eries in Indonesia as well as in Kasim in West Papua and Plaju in South Sumatra.

MALAYSIA

Amec Foster Wheeler Award-ed Feasibility Study for Refinery

Amec Foster Wheeler an-nounced the award of a con-tract by SKS Corporation Sdn Bhd, together with Petromin Corporation of Saudi Arabia, another Asian partner and Oce-nia PTE Ltd of Japan, to supply consultancy services for a pro-posed new refinery and pet-

The Downstream Grapevine

REPORT

Downstream News


rochemical complex in Kedah state, Malaysia.

The value of the consultancy contract, which will be delivered during 2015 by an Amec Foster Wheeler team in Reading and Kuala Lumpur, has not been announced.

Under the contract, Amec Fos-ter Wheeler will undertake a de-tailed feasibility study to define the configuration of the complex, develop the infrastructure re-quirements, establish a project implementation plan and pro-

duce a cost estimate to help op-timise the project and establish a clear plan to take the project forward.

The proposed development supports SKS’s aim to boost in-vestment into the Malaysian economy and develop the region as a world class supplier of refin-ery and petrochemical products to South East Asia.

Roberto Penno, Amec Fos-ter Wheeler’s Group President for Asia, Middle East, Africa & Southern Europe, said: “I am de-

lighted that a combination of our local team in Kuala Lumpur sup-ported by our refinery Centre of Excellence in Reading, is deliver-ing a major feasibility study for this exciting, world-scale petro-chemical project in Malaysia.”

SINGAPORE


Downstream News

ExxonMobil to Produce Flag-ship Mobil 1 Synthetic Engine Oil in Singapore

ExxonMobil is expanding its operations in Jurong to produce synthetic lubricants, including Mobil 1TM, the company’s flag-ship synthetic engine oil. The expansion will further strength-en the company’s manufactur-ing capabilities and ability to meet the growing demand for ExxonMobil synthetic products in the Asia Pacific region.

When completed in the second half of 2017, the facility will be the only plant in the Asia Pacific producing Mobil 1, the world’s leading synthetic motor oil. The facility will be one of six locations where Mobil 1 is produced.

“Mobil 1 is ExxonMobil’s most advanced synthetic engine oil,” said Bennett Hansen, Asia-Pacific lubricant sales director at Exxon-Mobil. “Adding Singapore to our network of Mobil 1 manufactur-ing facilities will ensure custom-ers’ needs are met well into the future. The new Singapore facility will employ innovative manufac-turing technologies, demonstrat-ing the company’s commitment to bringing premium products and technology to the market.”

The lubricant plant, strategical-ly located next to ExxonMobil’s manufacturing site in Jurong, adds to the company’s increas-ing lubricants and specialties production capabilities in Singa-pore. The company, which has operated in Singapore for more than a century, has continued to

Thai Oil Wins Thailand TOP Company Awards 2015

In August Thai Oil Public Company Limited’s Mr. Santi Wasanasiri, Vice President – Innovation and Sustainability was presented with “Thailand Top Company Awards 2015 –Top Innovative Company towards Sustainable Develop-ment Award” from His Excel-lency Professor Dr. Kasem Wat-tanachai, Privy Counsellor. The award is presented to an or-ganization that has significantly innovated in terms of sales and business structure with excel-lent business skil ls to help leverage international competi-tiveness of Thai businesses. The ceremony was held at Bencha-siri Grand Ballroom, Bangkok Marriott Hotel Sukhumvit.

VIETNAM

High Tech Pressure Ves-sels Produced for Nghi Son Refinery

Doosan Vina ’s Chemica l Processing Equipment (CPE) shop has made another eight shipments to Vietnam’s second petro chemical refinery which is now under construction in Vietnam’s Northern Province of Thanh Hoa with a total of 169 high tech pressure vessels that weigh of 5,438 tons.

grow its integrated refining and petrochemicals manufacturing site. The new production facility is in addition to the company’s recently announced grease man-ufacturing investment.

“ExxonMobil’s new synthetic lubricants plant will create yet another competitive advantage for the company and it will com-plement the existing lubricant additives industry here,” said Damian Chan, Singapore Eco-nomic Development Board’s ex-ecutive director for energy and chemicals, “This investment re-flects the industry’s push toward higher value-added manufactur-ing operations to meet growing middle-class demand for more sophisticated products in Asia.”

Gan Seow Kee, ExxonMobil Asia Pacific chairman and managing director, said: “The decision illustrates ExxonMo-bil’s continued confidence in Singapore and the Asia-Pacif-ic economy.

“Both the synthetic lubricants and grease investments under-score the company's ongoing commitment to disciplined long-term investments that improve our competitiveness and bring value to the country.”

THAILAND


The NSRP project was signed on March 21, 2014 for total 169 pressure vessels, towers and heat exchangers that will be installed to help this plant to produce 200,000 barrels of crude oil per day once it’s put into operation in 2017.

In the items sent to Nghi Son Refinery Project, the largest tank was 5.7m in diameter, 50m long and weighed over 205 tons.

It is the CPE’s biggest domestic project so far.

THE ORIENT

CHINA

China's Higher Refinery Runs May Boost Diesel Exports to Record

China’s diesel exports may surge to a record in the com-ing months as refinery out-put increases while domestic demand growth for the fuel slows.

The nation’s diesel ship-ments might have risen to a record last month, topping the previous high in June of 670,000 tons, and may climb to 1 million tons a month in

the fourth quarter, according to ICIS China, a Shanghai-based commodity researcher. China is scheduled to release August diesel export data next week.

Refiners processed 44.34 million metric tons of crude in August, up 6.5 percent from a year earlier, data from the Be-

ijing-based National Bureau of Statistics showed Sunday. That’s about 10.48 million barrels a day and 1.8 percent higher than July as produc-tion increased to satisfy grow-ing demand for gasoline.

Slowing industrial produc-tion and investment growth in the world’s second-largest oil consumer are curbing de-mand for diesel, which is used in the construction and transportation sectors. Indus-trial output rose 6.1 percent in August from a year earlier, missing an estimate of 6.5 per-cent. Fixed-asset investment, excluding rural households, climbed 10.9 percent in the first eight months, the least since 2000.

Diesel accounts for more than a third of China’s oil con-sumption, and the so-called apparent demand for the fuel slumped to about 3.47 million barrels a day in July, the least since August 2014, according to data compiled by Bloomb-erg. Meanwhile, gasoline de-mand was near a record 2.73 million barrels a day in the same month, up 17 percent from a year earlier.

China’s gasoline demand is forecast to grow around 10 percent this year while diesel use may climb 0.7 percent, Vienna-based consultant JBC Energy GmbH said in a re-port Monday.

“China faces one of the


Downstream News

worst situations in terms of demand mismatch in Asia,” researcher Energy Aspects said in report this month. “Its domestic gasoline demand is soaring, but its refineries cannot produce enough gaso-line without spewing out large quantities of unwanted diesel.”

Bloomberg

JAPAN

Shell to Sell Japan Refiner Stake to Idemitsu

Royal Dutch Shell has agreed to sell a 33.24 percent stake in Japanese refiner Showa Shell Sekiyu to Idemitsu Kosan for about ¥169 billion

The deal is scheduled to be completed in 2016. The Dutch firm will retain a 1.8 percent holding in Showa Shell .

“The sale is consistent with Shell’s strategy to concentrate its downstream footprint on a smaller number of assets and markets where it can be most competitive,” John Abbott, Shell’s downstream director, said in a statement. “Idemit-su is an established and suc-cessful company and is well positioned to take up Shell’s shareholding.”

SOUTH ASIA

INDIA

India's IOC to Commission All Units at Paradip Refinery by End-Sept-Chair

Indian Oil Corp, the coun-try's biggest refiner, will com-mission all units at its 300,000

barrel-per-day (bpd) Paradip refinery by the end of Septem-ber, the company's chairman said on Thursday.

T h e c o m p a n y b e g a n processing crude at the $5.2 billion refinery in eastern India in April and has been c o m m i s s i o n i n g u n i t s i n p h a s e s .

"By the end of September, all units will be in place and we will be producing prod-ucts regularly," IOC Chair-man B. Ashok told reporters in New Delhi.


THE PACIFIC

AUSTRALIA

INPEX Updates Production Schedule, Raises Capacity

INPEX announced that it has updated the expected production start-up schedule and raised the anticipated production capac-ity of the Ichthys LNG Project, which it is currently developing as Operator alongside its project partners. Production, which was initially expected to start toward the end of December 2016, is now expected to start in the third quarter of 2017 (July-September 2017). Meanwhile, INPEX will raise the annual LNG produc-tion capacity by approximately 6% to 8.9 MTPA from the initially planned 8.4 MTPA.

Since January 2012, when IN-PEX announced its final invest-ment decision on the Ichthys LNG Project, the company has worked on developing the project

in various locations around the world. While the project’s overall development was approximately 74% complete as of June 2015, IN-PEX updated the production start schedule based on the findings of a detailed review of the project’s development schedule. The com-pany will continue to diligently proceed with development work while prioritizing safety.

It is expected that the revised production start-up schedule and other factors will increase the project’s investment. How-ever, the increase is expected to be limited to approximately 10%.

INPEX anticipates that the an-nual LNG production capacity will increase by approximately 6% to 8.9 MTPA from the initially planned 8.4 MTPA. This increase in production capacity is based on the company’s recent technical evaluation of the latest technolog-ical information pertaining to the entire LNG production system.

In addition, the updated sched-ule reflects the expectation of a shortened time frame between

the start of production and the point where stable production is reached.

“The Ichthys LNG Project is a world-class project with an ex-pected operational life of at least 40 years. All the LNG initially planned to be produced from the project has been sold. Of this, about 70% of the LNG is set to be supplied to Japan, and this is expected to further contribute to the long-term, stable supply of energy to the country and im-prove Japan’s energy procure-ment risk management,” said IN-PEX CORPORATION President & CEO Toshiaki Kitamura.

“The project is also expected to make a significant contribu-tion to the social and economic development of Australia, one of the world’s foremost producers of energy. INPEX will guide the Ichthys LNG Project to success, working closely with its project partners, local communities, Australia’s federal government as well as the governments of Western Australia and the North-ern Territory, other project stake-holders and the wider Australian public to seek their continued understanding and support.”

The impact of the production start schedule update, if any, on the consolidated financial results for the year ending March 31, 2016 is expected to be minimal. The company plans to cover the costs of the project through its own funds as well as external loans (project financing, etc.) as originally scheduled. HA

34 HYDROCARBON ASIA, julY-Sept 2015 Visit our website at: http://www.safan.comCorrosion

technology

HT/HP Process Vessels Pitting Repairs

The costs of corrosion can be colossal, especially where safety critical equip-ment is concerned. When looking at the expenses associated with corrosion,

particularly in the oil, gas and petrochemical industries, direct and hidden costs should be considered. The former includes equipment and part replacement whereas the latter accounts for downtime, delays, litigation and other un-planned overheads.

The most damaging form of corrosion is localised corrosion. It occurs when the steel substrate is immersed in a liquid in the presence of chemical pol-lutants and/or galvanic cells. Unlike uniform corrosion where all parts of the metal surface corrode at a uniform rate, local-ised corrosion does not proceed uniformly and is focused at sites where corrosion proceeds much more rapidly, dependent upon the environment. Crevice and pitting corrosion (Figure 1) represent the main types of localised corrosion. In uniform corrosion Anodic and Cathodic sites across the surface of the steel substrate develop and are constantly changing polarity with respect to each other, result-ing in an even oxidation over the entire surface.

In pitting corrosion an anode develops and maintains its electrical potential with respect

to the surrounding metal. Consequently due to the large Cathode to Anode ratio, corrosion progresses rapidly forming a pit. Pitting corro-sion is especially prevalent in steels that have the ability to passivate - especially in stagnant conditions where the formation of a protective film is hindered by the presence of chloride ions. Pitting is understandably considered to be more dangerous than uniform corrosion damage because it is more difficult to detect, predict and design against. When identified, pitting damage has always been cumbersome to repair.

Pitting can be prevented and controlled by us-ing corrosion inhibitors, cathodic protection, and

Corrosion

Corrosion has been the scourge of the oil and gas industry for a long time. This article illustrates remedies for pitting corrosion.


protective coatings. Evidently and for a variety of reasons these protective systems have been known to fail. Once pitting occurs a solution is then required, which should be able to satisfy three basic needs:

(1) Quick repair, (2) Ease of application, (3) Rapid return to service.

Additionally, the main-tenance solution would ideally withstand service conditions for a consider-able amount of time.

Pitting Repairs - WeldingLocalised corrosion in the

form of deep pits can be weld repaired to restore the original profile; however, sufficient expertise and special tools are required. If either is lacking, repairs can do more harm than good with risks of distortion, weld cracks, stress corrosion and Health and Safety risks as-sociated with hot work.

Welding repairs carried out on metal substrates over 30mm thick must also involve post weld heat treatment (PWHT). PWHT, in some instances, may result in the loss of weld metal strength and toughness. The mechanical properties of the weld-joint may deteriorate as the vessel is repaired repeatedly. At times, PWHT takes approximately 40 hours to complete, therefore can be very costly, especially offshore. Furthermore, by welding over a metallic sub-strate, metal is being applied onto metal again. The original problem is not removed unless the metallic substrate is coated with an organic protective material.

Alternative to WeldingAnother viable alternative to repair pitting

corrosion is the use of cold applied epoxy ma-

terials. These 100% solids paste grade materials have been on the market since the 1960s and have been continuously improved to withstand greater temperature and pressure levels as well as various in-service conditions. Based on posi-tive qualification testing data, they have been successfully applied in the field in the past two decades. For instance, an amine reboiler vessel

at a gas terminal in the UK suffered corrosion with heavy pitting, which was discovered in 2011 (Figure 2). The operator required the ves-sel to be back in service as soon as possible and was looking for an alternative solution to hot work.

A paste grade epoxy material was chosen to fill the pits and the wall was protected with a modified epoxy novolac coating afterwards (Figure 3). Both the coating and paste grade material were designed to achieve full curing in high-temperature immersion service, mini-mising downtime.

The reboiler was opened up for inspection in July 2015. No further pitting damage or

36 HYDROCARBON ASIA, julY-Sept 2015 Visit our website at: http://www.safan.comCorrosion

corrosion were identified (Figure 4). Minor localised repairs were completed on the coating and the reboiler was returned to service.

Cold Applied Repairs - Application Methodology

In order to ensure fitness for serv-ice of pit filling epoxy paste grade materials, the application should be carried out in strict accordance with manufacturer ’s requirements. The contracting company must ensure that the surface is prepared cor-rectly, the repair material is mixed and applied properly and that it is allowed to cure in accordance with

manufacturer’s instructions. A typical pit filling procedure is summarised as follows.

1. All work must be carried out in accordance with the manufacturer’s instructions.

2. The vessel substrate must be dry and contami-nant-free.

3. Sharp edges or irregular protrusions should be ground down to a smooth contour with a radius of not less than 0.1 inch (3 mm). All surfaces must then be grit blasted using an angular abrasive to Swedish Standard SA 2 ½ (near white metal

finish) with a minimum profile of 3 mils (75 microns).

4. Paste grade epoxy material is mixed at a correct ratio.

5. The material is applied onto the substrate until original wall thickness is restored.

6. Material is allowed to solidify at ambient tem-peratures before achieving full cure in service.

Historically, one drawback of using epoxy ma-terials for pitting repairs was the amine bloom film, which would appear on the surface during


Enquiry Number 07/09-01HA

cure. Bloom manifests in a form of sticky deposits and affects overcoatability and intercoat adhesion. It must be removed by first washing with a hot detergent solution followed by a fresh water wash and then frost blasting prior to the application of a protective coating atop the pitting repair, leading to extended application time and labour costs.

The latest innovation in raw materials has brought on non-bloom technology, where frost blasting of the applied material prior to the applica-tion of protective lining is not required. This feature was incorporated into the reformulated version of the Belzona 1511 (Super HT-Metal), which has been on the market since 2001. In addition to incorpo-rating non-bloom technology, further evaluation revealed the following enhanced features:

• Frost blasting of the Belzona 1511 is no longer required when a protective lining is being ap-plied atop with a 24-hour overcoat window, thus reducing application costs.

• Application is also simplified with mixing and application possible at temperatures as low as 10°C (50°F).

• Rubbery domains used in the Belzona 1523 and Belzona 1593 linings have also been incorpo-rated in the polymer matrix of Belzona 1511, improving adhesion, flexibility and tough-ness.Tensile shear adhesion (ASTM D1002) has increased by 46% regardless of the cure temperature. Pull off adhesion has increased by 34% (ASTM D4541/ ISO 4624).

Continuous advancements in raw materials make it possible for coating and composite manu-facturers to produce systems that are better value and easier to apply, at the same time minimising the risks typically associated with hot work. This way indirect costs of corrosion, including downtime, delays, litigation and other unplanned overheads, can be significantly reduced.

References1) American Petroleum Institute. Pressure Vessel

Inspection Code: In-Service Inspection, Rating,

Repair and Alteration. API 510. Tenth edition, May 2014.

2) GUPTE, S. V. 2004. Inspection and Welding Re-pairs of Pressure Vessels. [Online]. [Accessed on 13 July 2015]. Available from: http://www.ndt.net/article/v09n07/rajesh/rajesh.htm

3) Partridge, I., Wintle, J., Speck, J. 2005. Pressure Vessel Corrosion Damage Assessment. [Online]. [Accessed on 13 July 2015]. Available from: http://www.twi-global.com/technical-knowledge/published-papers/pressure-vessel-corrosion-damage-assessment-november-2005/

4) Ferguson, K. R. 1991. Vessel Corrosion Repair-1 Weld Overlay Chosen for Corrosion Repair at Texas CO2 Plant. [Online]. [Accessed on 12 July 2015]. Available from: http://www.ogj.com/ar-ticles/print/volume-89/issue-48/in-this-issue/gas-processing/vessel-corrosion-repair-1-weld-overlay-chosen-for-corrosion-repair-at-texas-co2-plant.html

5) Gysbers, A. C. 2014. Avoiding 5 Common Pitfalls of Pressure Vessel Thickness Monitoring. [Online]. [Accessed on 12 July 2015] Available from: https://www.equityeng.com/sites/default/files/IJ.pdf

This publication thanks Marina Silva, Belzona Polymerics Ltd for providing this article for publication.




CatalystFeature

technology

ZSM-5 Zeolites with Different SARs as RFCC Additives

Fluid catalytic cracking is a key oil-con-version process in refineries, whereby the heavy oil is converted into valuable gaso-line, light olefins, and other products in the

presence of zeolitic catalysts. Primary cracking of heavy oil produces large quantities of olefins, and most of the generated olefins, usually C5+ olefins, undergo secondary cracking owing to their high reactivity when adsorbed onto acidic catalysts at elevated temperatures. To improve the quality of gasoline, i.e., by achieving high octane numbers, or enhance the yield of light olefins, ZSM-5 zeolites have been widely used as FCC catalyst additives since the 1980s.

By changing the crystal size, the SiO2/Al2O3 ratio (SAR), and the dosage of ZSM-5 zeolite, a high degree of flexibility to meet the require-ments of refineries can be achieved toward the FCC process. For instance, Kuehler studied the cracking performance of additives containing ZSM-5 with different SARs. The results showed that using ZSM-5 with a SAR of 40 afforded a higher octane number, but simultaneously led to a substantial loss in gasoline. In contrast, high gasoline yields were maintained when ZSM-5 with higher SARs (550 and 850) were

used. Buchanan et al. investigated the effects of SAR on the selectivity of hexene/octene crack-ing. The authors proposed that the effects on reaction selectivity were mainly related to dif-fusional blockage especially by non-framework alumina, and that the density of acid sites was not important in determining the selectivity of the catalysts. Arandes et al. demonstrated that using ZSM-5 zeolite as an FCC catalyst addi-tive for residue cracking was effective toward increasing the contents of C3- and C4-olefins in the liquid petroleum gas (LPG) and C5- and C6-olefins in gasoline because of the predominant occurrence of cracking reactions by β-scission over hydrogen transfer reactions. Gao et al. in-vestigated the influence of ZSM-5 zeolite particle size on the yield of propylene. The authors found that a higher amount of propylene and a higher quality of gasoline could be obtained when small ZSM-5 particles were used as additives. Reddy et al. examined the cracking of heptane over ZSM-5 featuring different morphologies and particle sizes. ZSM-5 nanosheets showed slightly lower catalytic activities than particulate ZSM-5, and the distribution of the hydrocarbon products was independent of the morphology of the ZSM-5 zeolites.

CatalystFeature

Three ZSM-5 zeolites with different SiO2/Al2O3 ratios (SARs) of 33, 266, and 487 were characterized and examined as fluid catalytic cracking catalyst additives for residue oil cracking. The catalytic performances of the ZSM-5 additives were evaluated by ultra-stable Y-zeolite (USY)-based fluid catalytic cracking catalysts in a fixed fluid bed unit. As observed, the cracking of primary olefins was considerably inhibited by increasing the SAR of the ZSM-5 zeolite, thus avoiding substantial loss of gasoline paraffins. The use of ZSM-5 with higher SARs (266 and 487) led to an enhancement in the octane number with minimal loss of gasoline. This enhancement was mainly attributed to the moderate aromatization and isomerization reactivity of the ZSM-5 additives that mainly originated from their relatively small pores and suitable acidic properties with higher SARs.


Despite this significant progress, a definite con-clusion on the influence of SAR of ZSM-5 zeolites on the gasoline quality (i.e., octane number) in the cracking of residue oil has yet to be reached. Furthermore, using suitable ZSM-5 additives to improve the octane number of gasoline without incurring significant losses of gasoline or mini-mizing the production of LPG is essential, and is particularly important for FCC-operated refineries with limited gas handling capacity.

In this work, three proton-type ZSM-5 zeolites with different SARs were selected as catalyst addi-tives for residue cracking under FCC conditions. The acidity of the zeolites was characterized by pyri-dine adsorption-based infrared (IR) spectroscopy (Py-IR) and ammonia temperature-programmed desorption (NH3-TPD). The cracking of residue oil over the hybrid catalysts consisting of USY-based catalysts and ZSM-5 additives was performed in a fixed fluid bed reactor. The effects of SAR on the product distribution and the octane number of gasoline were investigated in detail.

Experimental

Preparation of catalystsThree proton-type ZSM-5 zeolites with different

SARs were purchased from Nankai Catalyst Plant, and directly used without any treatments. The SARs of the three types of zeolites, determined by inductively coupled plasma optical emission spectrometry (ICP–OES; Perkin Elmer, Optima 5300DV), are 33, 266, and 487, respectively, and are denoted as ZSM-5-l, ZSM-5-m, and ZSM-5-h in the SAR order from low to high. The ZSM-5 additives were prepared as follows: The slurry comprising ZSM-5 (25 wt%), kaolin matrix (65 wt%), and alumina binder (10 wt%) with a liquid-to-solid mass ratio of 5 was thoroughly mixed and spray-dried to form microspheres with a

typical particle size of 70 μm. The additives were identified as Z-l, Z-m, and Z-h, correspondingly. Commercial USY-based FCC catalyst LEO-1000 (denoted as USY), supplied by PetroChina Ltd., was employed as the base catalyst to evaluate the effect of SAR on the catalytic cracking perform-ance. The hybrid catalysts, containing 2.5 wt% ZSM-5 zeolite, were obtained by physical mixing of the USY-based catalyst and respective ZSM-5 additive, and are denoted as USY/Z-l, USY/Z-m, and USY/Z-h, respectively.

Sample characterization X-ray diffraction (XRD) data were collected at

ambient temperature in the 2θ range of 5°–80° with a step of 0.02° on a Rigaku D/max diffrac-tometer with Cu Kα radiation and equipped with a graphite monochromator. The crystal morphology was studied by scanning electron microscopy (SEM; Hitachi S4800). IR spectra of the zeolites following adsorption of pyridine (Py-IR) were recorded on a Bruker TENSOR27. NH3-TPD was performed on a Micromeritics AUTOCHEM II 2920.

Catalytic cracking tests The cracking of residue oil was performed at

500 °C for 60 s on a laboratory-designed fixed fluid bed unit. The hybrid catalysts were deactivated at 800 °C for 10 h in the presence of steam prior to the test. The catalyst loading and feedstock input were 200 and 50 g, respectively. The gase-ous and liquid effluents were determined by gas chromatography (HP 6890). The paraffins (P), olefins (O), naphthenes (N), and aromatics (A) contents (PONA analysis) of cracked gasoline were analyzed by gas chromatography (Varian CP-3380). The amount of coke deposited on the catalyst was assessed by burning the sample in a carbon analyzer (DF 190). The properties of the residue oil are listed in Table 1.


CatalystFeature

Results and Discussion

Zeolite characterizationFigure 1 shows the XRD patterns of the ZSM-5

zeolites with SARs of 33, 266, and 487 (ZSM-5-l, ZSM-5-m, and ZSM-5-h, respectively). All patterns were in good agreement with the orthorhombic phase of ZSM-5 zeolite. The relative crystallinity values of ZSM-5-l, ZSM-5-m, and ZSM-5-h were 91, 88, and 90 wt%, respectively, relative to the standard zeolite ZSM-5 reference.

Figure 2 shows the SEM images of the three ZSM-5 samples at different magnifications. The morphology of ZSM-5-m differed consid-erably from that of ZSM-5-l and ZSM-5-h. In contrast to the spherical features of the ZSM-5-m crystals, ZSM-5-h zeolite crystals, with a regular morphology, were primarily oriented along the b-axis [10–12]. Though the size of the crystals in ZSM-5-l varied, the morphology of the ZSM-5-l crystals was comparable with that of ZSM-5-h crystals.

Figure 3 displays the Py-IR spectra of the ZSM-5 zeolites. The peaks at 1452 and 1542 cm−1 were ascribed to pyridine attached to Lewis and Brönsted acid sites respec-tively. With increasing SARs,

the density of both the Brönsted acid sites and Lewis acid sites declined markedly as observed in Fig. 3 and Table 2. ZSM-5-l, which featured a


low SAR, displayed a higher content of Brönsted acid sites when compared with the other zeolite samples. Accordingly, it is expected that reac-tions, such as olefin cracking, that are catalyzed by Brönsted acid sites will occur predominantly.

Figure 4 shows the NH3-TPD profiles of the ZSM-5 zeolites with varying SARs. The ZSM-5 zeolites displayed two prominent desorption peaks at 232 and 442 °C, which were assigned to weak acid sites and strong acid sites, respectively [15]. An increase in SAR resulted in a marked decrease in the density of both acid sites, con-sistent with the Py-IR analysis of the zeolites.

Catalytic cracking testsThe fixed fluid bed data for residue crack-

ing are given in Table 3. Under the given conditions, the USY-based catalyst achieved a gasoline yield of 49.60% and a LPG (sum of C3s and C4s) yield of 16.52%. Hybrid catalyst USY/Z-l achieved a significantly higher LPG yield (up to 22.44%) and a considerably lower C5

+ gasoline yield of 42.76%. With increasing SARs, LPG yields decreased gradually (19.98% for USY/Z-m and 19.10% for USY/Z-h), and the loss of gasoline was considerably inhib-ited, achieving 44.10% and 46.40% yields for USY/Z-m and USY/Z-h, respectively.

Furthermore, the introduction of ZSM-5 addi-tives attenuated the conversion level of feedstock because the pores of ZSM-5 were only 5–6 Å wide, insufficiently large for big molecules to enter. Compared with the USY-based catalyst, a slight decrease in the conversion degree of residue oil was detected in the presence of the hybrid catalysts. Moreover, the introduction of ZSM-5 additives had little influence on the for-mation of dry gas and coke, although relatively high gas and coke selectivity were observed over hybrid catalyst USY/Z-l.

It is widely recognized that the olefins in gasoline have a much higher reactivity when compared with the paraffins generated over acidic ZSM-5 catalysts. Upon adsorption onto the acid sites of ZSM-5, especially on Brönsted acid sites, the olefins initially interact with the acid sites to form the intermediate products, carbenium ions. These intermediate products react subsequently to yield smaller olefin mol-ecules, including propylene and butenes, via a β-session mechanism. Consequently, the crack-ing of gasoline olefins declines with decreasing densities of Brönsted acid sites (increase in


CatalystFeature

SAR), and more gasoline olefins are saturated by hydrogen atoms via intermolecular hydrogen transfer reactions. Hence, we may deduce that the significant changes in the catalytic properties of the three hybrid catalysts are mainly related to the change in the acidity of the ZSM-5 additives due to the change in the SAR.

Other factors, such as the particle size and morphology of ZSM-5 zeolite, may also in-fluence the selectivity of the catalysts. It was previously reported that compared with the FCC catalyst containing typical ZSM-5 zeolite (average particle size of 5.48 μm), the catalyst containing small particles (average particle size of 1.99 μm) could lead to increases in the LPG and propylene yields by 0.41% and 0.08%, respec-tively. By studying the effects of the morphology and the particle size of ZSM-5 on the catalytic performance for heptane, Baba and co-workers found that ZSM-5 nanosheets showed a slightly lower catalytic activity than particulate ZSM-5 (17.6% vs. 17.8%), and the distribution of the hydrocarbon products was independent of the morphology of ZSM-5. According to these lit-erature results, we can conclude that differences in the particle size and morphology of ZSM-5 zeolites can also influence the selectivity of the catalysts to a certain extent, however, such differences would not entirely account for the significant changes in the catalytic performance of the hybrid catalysts.

To further understand the effect of SAR of the ZSM-5 zeolites on the selectivity of the hybrid catalysts, the SAR dependency of ∆Cns/Cns(USY) (n = 3, 4) of the hybrid catalysts is shown in Fig. 5. The high ∆C3s/C3s(USY) values suggested that ZSM-5 zeolite had a higher C3s selectivity rela-tive to C4s, and the highest ∆C3s/C3s(USY) value of 50% was attained over the hybrid catalyst USY/Z-l. The ∆Cns/Cns(USY) values decreased with increasing SARs. The cracking of gasoline occurring in the pores of ZSM-5 zeolite was acid-catalyzed, accordingly, the decline in ∆Cns/Cns(USY) was mainly due to a decrease in the


acid density of the ZSM-5 zeolites. The sharper decline in ∆C3s/C3s(USY) with increasing SARs, relative to ∆C4s/C4s(USY), may result from a decrease in the extent of cracking of C6 olefins that is believed to have a higher C3s selectivity over C4s, and declines more drastically when compared with gasoline olefins with higher carbon numbers. Additionally, other factors, such as the difference in the morphology of ZSM-5 crystals, may contribute to the change in ∆Cns/Cns(USY) because the morphology of ZSM-5 crystals has been reported to influence product selectivity.

Previously, Madon proposed that ZSM-5 zeo-lites could catalyze both normal and branched olefin cracking to give propylene, butenes, 2-methyl 1-butene, and 2-methyl 2-butene. In the present work, the following interesting phenomenon was noted: besides these light olefins, the yields of isobutane and isopentane increased markedly in the presence of ZSM-5 zeolite catalysts. The highest yields of isobutane and isopentane were obtained in the presence of hybrid catalyst USY/Z-l as shown in Table 3 and Fig. 6. According to the related literature reports, the cracking of normal octene over Brönsted acid sites mainly involves the interme-diate formation of carbenium C8

+. As shown in Scheme 1, carbenium C8

+ can undergo β-scission (cleavage of C–C bond at the β-position to the positively charged atom) to form smaller olefins and a smaller carbenium (not shown in Scheme 1), or react with other paraffin molecules via intermolecular hydrogen transfer. The smaller carbenium may further release a hydrogen cation to form another olefin, or react with paraffin in close proximity. Because of the narrow pore and low acid density of ZSM-5 zeolites, the carbenium C8+ reacts to predominantly form smaller olefins, including propylene, butenes, and pentylenes. As the shift of the double bond in the olefins occurs easily at elevated tempera-tures, large amounts of isobutene and isopentene are obtained during the cracking reactions. When these olefins are subsequently adsorbed onto

the USY-based catalyst with a high density of acid sites, they are saturated by hydrogen atoms through intermolecular hydrogen transfer to form isobutane and isopentane.

The results of the PONA analysis and the oc-tane number of cracked gasoline are shown in Table 4. The presence of ZSM-5 additives had pronounced effects on the gasoline composition, especially paraffins and aromatics. The reduc-tion of paraffins appears to be inconsistent with the fact that the reactivity of olefins over ZSM-5 zeolites is much higher than that of paraffins. To rationalize this finding, it is necessary to understand the interaction mechanism between the USY-based catalyst and ZSM-5 additives. Primary cracking of the feeds produces large quantities of gasoline olefins, which would be saturated via intermolecular hydrogen transfer over the USY-based catalyst. Upon introduction of ZSM-5 additives with low SAR (i.e., 33), the gasoline olefins with a high reactivity could be easily converted into light olefins, thus conse-quently leading to reduced yields of gasoline paraffins. With increasing SARs, the cracking of gasoline olefins over ZSM-5 additives declines, and more olefins are preserved and then satu-rated by hydrogen atoms over the USY-based catalyst. Furthermore, the extent of cracking of gasoline aromatics over the hybrid catalysts is relatively low, which could lead to increased concentrations of aromatics. The aromatization of hydrocarbon molecules over the hybrid catalysts may also contribute to the increase in the aromat-ics concentration. As a result, the motor octane number (MON) values of gasoline, which are mainly determined by the aromatics concentra-tion, increased upon introduction of the ZSM-5 additives. These values decreased gradually with increasing SARs (Table 4).

Notably, the research octane number (RON), which is one of the most important indexes of gasoline, could be improved upon introduction of the ZSM-5 additives (Table 4). The use of ZSM-5 additives increased the RON value of


CatalystFeature

gasoline from 88.6 (over the USY-based cata-lyst) to 91.1 (USY/Z-l), 91.7 (USY/Z-m), and 90.2 (USY/Z-h). However, as mentioned before, a substantial loss in gasoline was observed in the presence of hybrid catalyst USY/Z-l. In contrast, the loss of gasoline was considerably in-hibited by increasing the SAR to 266 or 487. These results suggest that changing the SAR of ZSM-5 zeolites enables the formation of efficient hybrid FCC catalysts, which can improve the octane number of gasoline without substantial loss of gasoline. In our study, the enhancement in the RON value of gasoline was mainly attributed to the moderate aromatization and isomeriza-tion reactivity of the ZSM-5 additives that are mainly attributed to the relatively small pores and suitable acidic properties of the ZSM-5 zeolites with higher SARs.

ConclusionThe cracking of residue oil was investigated

over hybrid catalysts comprising USY-based catalysts and ZSM-5 additives. The product distributions over the hybrid catalysts were rationalized in terms of the acid properties and olefin cracking reactions involved. The cracking of primary olefins over the hybrid catalysts was considerably inhibited by increasing the SAR of the ZSM-5 zeolite that inhibited substantial loss of gasoline paraffins. The introduction of ZSM-5 additives led to increased yields of olefinic gases as well as higher yields of isobutane and isopentane, which may be attributed to the combined effects of ZSM-5 additives and USY-based catalysts. MON values, which are mainly influenced by the concentration of gasoline aromatics, increased with increasing densities of acid sites on ZSM-5 zeolites. The variations of the gasoline paraffins and aromatics both accounted for the enhancement of the RON values. Using ZSM-5 zeolites with higher SARs of 266 and 487

resulted in octane enhancement with minimal loss of gasoline. The current findings provide

insight into the development of more efficient FCC catalyst additives for octane enhancement with minimal loss of gasoline.

References [1] Argauer R J, Landolt G R. US 3 702 886. 1972[2] Csicsery S M. Zeolites, 1984, 4:202[3] Corma A. Stud Surf Sci Catal, 1989, 49:49[4] Degnan T F, Chitnis G K, Schipper P H. Mi-

croporous Mesoporous Mater, 2000, 35-36:245[5] Buchanan J S, Olson D H, Schramm S E. Appl

Catal A, 2001, 220:223[6] Gao X H, Tang Z C, Zhang H T, Ji D, Lu G X,

Wang Z F, Tan Z G. J Mol Catal A, 2010, 325: 36

[7] Kuehler C W. Fluid Cracking Catalysts (Chemi-cal Industries 74). CRC Press, 1998. 31

[8] Arandes J M, Torre I, Azkoiti M J, Erena J, Olazar M, Bilbao J. Energy Fuels, 2009, 23:4215

[9] Reddy J K, Motokura K, Koyama T, Miyaji A, Baba T. J Catal, 2012, 289:53

[10] Cundy C S, Henty M S, Plaisted R J. Zeolites, 1995, 15:342

[11] Liu C Y, Gu W Y, Kong D J, Guo H C. Micro-porous Mesoporous Mater, 2014, 183:30

[12] Liu C Y, Kong D J, Guo H C. Microporous Mesoporous Mater, 2014, 193:61

[13] Weitkamp J, Lothar P. Catalysis and zeolites: fundamentals and applications. New York:



Springer, 1999. 224[14] Zhou J H, Zhao Y, Song J F, AiSHA N L H, Hu

J, Chen L X, Guo H C. Chin J Catal, 2008, 29:665[15] Zhang P Q, Xu J G, Wang X S, Guo H C, Chin

J Catal, 2005, 26:216[16] Buchanan J S, Santiesteban J G, Haag W O. J

Catal, 1996, 158:279[17] Buchanan J S. Catal Today, 2000, 55:207[18] Buchanan J S. Appl Catal, 1991, 74: 83[19] Shan Z C, Wang H, Meng X J, Liu S Y, Wang

L, Wang C Y, Li F, Lewis J P, Xiao F S. Chem Commun, 2011, 47:1048

[20] Yang G J, Wei Y X, Xu S T, Chen J R, Li J Z, Liu Z M, Yu J H, Xu R R. J Phys Chem C, 2013, 117:8214

[21] Madon R J. J Catal, 1991, 129:275

This work was supported by the National Basic Research Program of China (973 program, 2011CB808703) and the National Natural Science Foundation of China (91122029, 21320102001).

This publication thanks Jayden Yin, Over-seas Marketing Director, Rezel Catalytic Technologies for providing this article, which was presented at the Downstream Business, Engineering & Technology Con-ference in Kuala Lumpur, Malaysia on 15th September, 2015.

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