Best Practices Implementation

Fixed Equipment Reliability

2nd Annual
World Refining Technology Summit
Abu Dhabi, UAE
1-2 November, 2010
Gregory Alvarado
l
d
Vice-President and Sr. Consultant
Shaker
Sh
k Heights,
H i ht OH
Houston, TX
Edmonton, Alberta, Canada
Abu Dhabi, UAE
Al khobar Kingdom of Saudi Arabia
Al-khobar,

Overview
Introduction
The Goal
Impact of Culture and Practices
Industry Loss Statistics Marsh Report 2010
Life Cycle Management of Equipment & Best Practices
Overview
Management Systems
Management Leadership and Support
Recognizing, Understanding and Managing Uncertainty
Sample
p Metrics for Managing
g g Risks
Gap Assessments Best Practices vs Compliance

Introduction
Quote from the Marsh and McLennan Report, The 100
Largest Losses 1972-2001, 20th Edition, February 2003,
a publication of Marshs Risk Consulting Practice:
Losses in the refinery industry have continued to
increase over the last few years and the causes highlight
the aging facilities in this category. A significant number
of larger losses (over $10,000,000) have been caused
by piping failures or piping leaks, leading to fires and/or
explosions. Several large losses due to piping failures
g the wrong
g
were due to corrosion issues or using
metallurgy..

Introduction
The explosion occurred when employees were attempting
to isolate a leak on a condensate line between the NGL
plant and the refinery. Three crude units were damaged
and two reformers were destroyed. The fire was
extinguished approximately nine hours after the initial
explosion. Five people were killed and 50 others were
injured. Initial investigation into the loss indicates a lack
of inspection
p
and maintenance of the condensate line.
June 25, 2000
Mina Al-Ahmadi, Kuwait
$412,000,000 (2000 dollars)

$433,000,000 (2002 dollars)

From the Marsh and McLennan Report, The 100 Largest Losses 1972-2001, 20th
Edition: February
y 2003,, a publication
p
of Marshs Risk Consulting
g Practice

The Goal

Achieve and corporate compliance

(business, safety, environmental) and
ensure reliable use of fixed equipment
for finite run times, by understanding,
id tif i
identifying,
measuring,
i
and
d managing
i
risks and eliminating non-value adding
activities and costs.
costs

Introduction
I
Improvement
t is
i Needed
N d d
The
The significant problems we have
cannot be solved at the same level of thinking
with which we created them.
~Albert Einstein
Plants are aging
Failure rates will increase without effective change
See latest Marsh Consulting
g report
p 2010

Marsh Report Observations

As risk management techniques grow increasingly
complex, and oil, gas, and chemical companies
continue to seek new ways to manage total cost of risk,
risk
it has become even more imperative to have a firm
grasp on the nature of operational losses that have
historically occurred.
occurred Indeed,
Indeed when planning ahead,
ahead
one step involves looking back to the future. No one
who has been in these industries for very long would
ever
e
e say that
t at will never
e e happen
appe again!
aga
James
Ja
es R. Pierce,
e ce,
Chairman Energy Practice, Marsh Consulting

Five year loss totals in the refinery industry have

continued to trend upwards over the last few years.
years
Piping failures or leaks (corrosion or incorrect
metallurgy) and start-up and shut-down events
g
causes.
continue to be significant

API 754 NEW PSM Metrics

R l
Released
dA
April
il 2010

What Are IM Protective Barriers

James T. Reason, psychologist, 1990

Christopher A. Hart, 2003

Swiss Cheese Model

Hazards are contained by multiple protective
barriers.
Barriers may have weaknesses or holes.
g , the hazard passes
p
through
g the
When holes align,
barriers resulting in the potential for harm.
Barriers may be physically engineered
containment or behavioral controls dependent
upon people.
p
or actively
y opened
p
Holes can be latent,, incipient
by people.

IM PBs in Facility PSM Program

H W Heinrich
H.W.
Heinrich, 1931 Accident Pyramid

Pyramid
Safety accidents can be placed on a scale by the level
of consequence
Many precursor incidents
d
occurred
d with
h lesser
l
consequences for each accident that occurred with
greater consequences.
Heinrichs
h model
d l represents a predictive
d
relationship
l
h
between lower and higher consequence personal safety
events.
Indicators
I di
that
h are predictive
di i
are considered
id
d leading
l di
indicators
used to identify a weakness that can be corrected
b f
before
a higher
hi h consequence event occurs.
Tier 1 is the most lagging and Tier 4 is the most
leading.

12

Examples of Tier 4 Items

Process Safety Action Item Closure - Percentage and/or number of pastdue process safety actions. This may include items from incident
investigations, hazard evaluations or compliance audits.
Training Completed on Schedule - Percentage of process safety required
training sessions completed with skills verification.
Procedures Current and Accurate - Percent of process safety required
operations and maintenance procedures reviewed or revised as scheduled.
Safety Critical Equipment Inspection - Percent of inspections of safety
critical equipment completed on time. This may include pressure vessels,
storage tanks, piping systems, pressure relief devices, pumps, instruments,
control systems, interlocks and emergency shutdown systems, mitigation
systems, and emergency response equipment.
Safety Critical Equipment Deficiency Management - Response to safety
critical inspection findings (e.g. nonfunctional PRDs and SISs). This may
include proper approvals for continued safe operations, sufficient interim
safeguards, and timeliness of repairs, replacement, or rerate.
Management of Change (MOC) and Pre Start-up Safety Review
(PSSR) Compliance - Percent of sampled MOCs and PSSRs that met all
requirements and quality standards.
standards

Examples of Best Practices

Implementation and Benefits

Improved reliability
Fewer leaks
Fewer surprises during turnarounds
Shorter turnarounds
Proactive behavior =
Planning, strategies, health, safety and business result
From FEED through end of life
Elimination of non-value adding activities
Effective life-cycle planning and management of
equipment
q p
Predictable outcomes
Effective spending
Better intentional directives

Life-Cycle
if
l
Management
of Fixed
Equipment
Sample components of ASME PTB-2-2009
Guide to Life Cycle Management of
Pressure Equipment Integrity
June 5, 2009

Best Practices Under Construction

The API Pressure Vessel Inspection Code, 510, is
undergoing a massive re-write
re write to make it consistent
with the other standards and capture industry best
practices, to date.
Construction of the following new references is
under way:

RP 583

Corrosion Under Insulation

RP 584

Integrity Operating Windows

RP 585

Pressure Equipment Investigation

API 691

RBI of Rotating Equipment

Best Practices Newly Released

Newly released documents include:

API RP 580 Risk-Based

Ri k B
d Inspection,
I
i
2ndd
Edition, November 2009

API RP 576 Inspection

p
of Pressure Relieving
g
Devices, 3rd Edition, November 2009

API RP 574 Inspection Practices for Piping

Components 3rd Edition,
Components,
Edition November 2009

API RP 572 Inspection Practices for Pressure Vessels

API 570 Piping

p g Inspection
p
Code: In-service
Inspection, Rating, Repair, and Alteration of Piping
Systems, 3rd Edition, November 2009

Inspector Certifications
Basic
510 Pressure Vessel
570 Piping
653 Above Ground Storage Tanks
936
3 Refractory
f
QUTE

Inspector Certifications
Advanced Supplemental
pp
580 RBI
571 Damage Mechanisms
577 Welding & Metallurgy
Meaning of supplemental certifications

API DB Search

http://www.api.org/certifications/ICP/

PEI Management Systems

Inspectioneering Journal Article Series

January/February 2010 Issue
Management Leadership and Support
for PEI, by John Reynolds

Management Leadership & Support

for PEI

Inspectioneering Journal Article Series

January/February 2010 Issue
Management Leadership and Support
for PEI, by John Reynolds

PEI Program - 101 Elements

Inspectioneering Journal Article Series Published

Ammonium Salt Corrosion

Auditing of PEIM Programs
Bad Actor Pumps
Brittle Fracture Prevention

Carbon Moly Equipment

Cathodic Protection
Cast Iron
Certification of Inspectors
Chloride Cracking (External) of Stainless
Steel Piping and Vessels
Contamination of Process Streams (Sudden
Inadvertent)
Corporate Failure Memory
Co osion Rate and Remaining Life
Corrosion
Calculations (Timely)
Corrosion Rate and Process Condition
Monitoring
Corrosion Under Insulation (CUI)
Corrosive Mix Points
Critical Check Valves

Dummy Leg Corrosion

Deadlegs (Inspection of)
Dew Point Corrosion

Electric Resistance Welded (ERW) Pipe and

Tubing
Exchanger Bundle Classification
External Corrosion Prevention
Inspection for Environmental Cracking
Gray Zone Equipment

Fabrication QA/QC
Failure Analysis
Fatigue Failures
Field Surveillance
Fitness for Service (FFS) Analysis
Flange Bolting Procedures
Flange Gasket Selection and QA
Flare
l
System
S
Inspection
i
Fraudulent and Counterfeit Materials
Furnace Monitoring and Inspection

Handling of Pressure Relief Devices

H tT
Heat
Tracing
i
in
i Safety
S f t Systems
S t
Hot Spots
Hot Tapping and Welding on Equipment-inService
Hydrostatic Overpressures
Hydrotest Water Quality
Hydrotesting Safety

PEI Program - 101 Elements

Inspectioneering Journal Article Series Published

Idle and Retired Equipment

Incidents Associated with Installation of
Pollution Control Equipment
Injection Point Inspection
Inspection Recommendation Tracking
Inspection Scheduling
Inspection Procedures
Inspection Staffing
Inspection for Inaccessible Locations
Inspection Record Keeping Systems
(Effective)
Key and Critical (K/C) Materials
Degradation Variables
Knowledge Transfer to Operators
Leak and Failure Investigation Reporting
Leak and/or Pressure Testing
Line of Authority and Management
Leadership for Inspection
Localized Corrosion (
(Inspection
p
of)
)
Management of Change (MOC) for PEI
Issues
Materials and Corrosion Engineering
Material Degradation Risk Management
Mixed Metallurgy Piping Systems

NDE Specialists
NDE versus Pressure Testing
Non-blowout Proof Valve Stems
On-Stream Inspection (OSI)
Overdue (Equipment) for Inspection
Paint and Coatings QA/QC
Participation on Industry Standardization
Committees
Performance Testing of NDE Examiners
Pipe Plugs
Pipe Rack Inspections
Piping Inspection
Plugged
l
d Vents on S
Storage Tanks
k
Positive Material Identification (PMI)
Post Weld Heat Treatment
Pressure Equipment and Inspection Codes /
Standards
Pressure Equipment Regulatory Activities
Pressure Relief Device Auditing
Process Creep

PEI Program - 101 Elements

Inspectioneering Journal Article Series Published

Qualified Suppliers and Fabricators

Relief Valve Prepopping
Repair and Testing Procedures
Ri k B
Risk
Based
d Turnaround
T
d and
d Inspection
I
ti
Planning
Root Cause Analysis, Failure Investigations,
and Solution Development
Selection and Placement of Corrosion
Monitoring Locations (CMLs)
Shared Ownership of Pressure Equipment
Assets
Small Bore Piping (SBP) Inspection
Soil-to-Air Interfaces of Buried Piping
Structural Inspections
Surface Cleaning for Inspection

Tank Bottom Inspection

Temporary Repairs and Temporary
Installations
Thi k
Thickness
M
Measurementt A
Accuracy and
d
Reproducibility
Third Party Owned Equipment
Total Cost of Ownership
Training of Inspectors
Transient Piping Loads
Tank Roofs (Inspection of)
Valve Quality Problems
Water Drop Out Points
Welding Quality Assurance and Quality
Control
Wire Wrapping / Boxing of Flange Leaks

Managing Uncertainty Intentionally

Additional Benefits
Inspection
p
Planning
g & CBA

$1,400,000
Current Inspection Costs
Current Maintenance Costs

$1,200,000

Total Current Costs

RBI Inspection Costs

$1,000,000

RBI Maintenance Costs

RBI Total
Total Savings

$800,000

$600,000

$400,000

$200,000

$0
Unit A
-$200,000

-$400,000

Unit B

Unit C

Unit D

Unit E

LERU RBI Cost Benefit

Inspection
p
Planning
g & CBA

Unit

Type

CBI
(% Reduced)

RBI
(% Reduced)

Risk Mitigation
(% Improvement)

431

DIB/Deprop

11

85

74

866

Heavy HDS

50

48

867

SRU

21

93

72

231

Gulfiner

22

50

28

531

Amine

30

68

38

8733

SWS

30

83

53

137

Crude

210B

Crude

53

91

38

210C

Vac

40

68

28

865

Kero HDS

49

40

860

Reformer

35

91

56

862

LERU

17

85

68

864

Unifiner

10

63

53

210A

Crude

32

74

42

868

FCC

66

62

869

Sulfuric Alky

16

60

44

Inspection Planning
4000
3500

Riskk (Sq. Ft/yr)

3000
2500
2000
1500
1000
500
0

Old
New

Green risk profile is with API RBI implemented in this process unit
Blue risk profile is with traditional API 570/510 program in place
Blue plan yields 1.7sq./year/$$ of risk reduction over 4 years
Green strategy yields 2.7sq./year/$$ risk reduction over 4 years
Net benefit is ~40%
40% improvement in risk reduction
ROI >> 10X

Gap Check
Fixed Equipment Reliability
Gap Analysis
FERMI Process

Best Practices
Observations/recommendations
Roadmap Strategy
Cross-functional team with owner/operator
experience and SMEs
Trained team members
Metrics and Priorities Jointly developed, may
also use company HSE risk matrix

Sample FERMI Focus Areas

Broad Categories
g
Data Management

Inspection Programs

g
g&
Engineering
Maintenance

Metallurgy
gy

Equipment Planning
Inspection Management
Inspection Planning

Plant Processes
Receiving Inspections
Welding and Repairs

Benchmarking

Working Practices
Procedures
Understanding
Utilization of best practices
S
Synergies
i and
d interdependent
i t d
d t practices,
ti
processes
and programs
Metrics
Kudos Good practices recognized
Areas of vulnerability
R
Recommendations
d ti
ffor improvement
i
t
Benchmarking metrics

Practices and Implementation

Scoring is based on a rating from 1 to 5 where:
1 = No awareness, nor implementation
2 = Awareness, but not implemented or significantly lower caliper vs.
refining industry common practice
3 = Limited implementation (25%) or modestly lower caliber vs.
refining industry common practice
4 = Partial implementation (25-90%) or similar to refining industry
common practice
5 = Totally implemented and part of routine business, similar to
pacesetter refinery practices.

The resulting scores are based both on the interview results, as

well as, the file review.
Each
E h off th
the subject
bj t area statements
t t
t are also
l weighted
i ht d for
f
relative importance. These weight numbers are used for the
benchmarking of one facility versus another.

Scoring
One of the objectives of an assessment should be
to provide a means of measuring the FER (Fixed
Equipment Reliability) program performance of a
facility, initially and over time.
The scoring enables an owner to:
Compare the facility performance against a top
performers
Measure the change in performance as a result of
closing the identified gaps for each FERMI focus area
Compare the site to other company sites and to
compare against itself at periodic intervals

Assessment Methodology
File Review
Re ie
The file review is performed after the initial interviews to
verify the information obtained through the interview
process.
p
have reviewed fixed equipment
q p
g
groups
p and
E2Gs specialists
programs from many refineries.
The mix of subject matter experts and seasoned facility
technical staff are able to not only determine if a particular
MI procedure is in use, but are also able to determine a
relative quality of the written material. For instance:
The interview determines that the facility does have a root
root cause
cause
culture. Follow up file review finds that the root cause analysis was
performed, but the conclusions made were not reached in a logical
manner. Generally this means that the obvious, immediate cause
was determined to be the root
root cause
cause.

Best Practices Sample Resources

To keep up-to-date with industry best practices, visit
http://www.api.org
Or better yet, participate and have a voice in their development
by visiting the API Fall and Spring Refining Meetings and
becoming
g a committee member.
Learn more by visiting sites like:
http://www.api.org/
http://www.asme.org
http://www.nace.org
http://www.hse.gov.uk/
http://www.inspectioneering.com
http://forengineers.org
http://www.absa.ca/
htt //
http://www.highpressure.jp/english/
hi h
j /
li h/

www.equityeng.com