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Maintaining Productivity
Yields Through
Instrumentation Analysis
Instrumentation repair, maintenance, or
replacement is a key essential of any project
or plant operation analysis. Whether you are
measuring existing energy consumption norms in
gas pipelines, scoping a maintenance turnaround,
or defining criteria design and conditions, all
procedures and resulting analysis are measured
to safety and maximize your capital return.
Through an Instrument Failure Analysis, FAST
sponsored by:
engineers determine the root cause of your
failed gauge – whether it is a WIKA product or
not – and recommend a solution to help prevent
further breakdowns. Equipment inspections,
by company regulation or government
mandate, are built in measures to assure your
productivity.
3
The pursuit of
‘zero leaks’ 6 Compressor
Optimization 16 Compressor
Optimization 23 Analysis yields
turnaround
Part 1 Part 2 benchmarks
for allowance,
contingency
More than half your
engineers are retiring... SM
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by Christopher E. Smith
U
S President Barack Obama signed the Pipeline Safety, Regulatory
Certainty, and Job Creation Act of 2011 into law Jan. 3, reauthorizing
the Department of Transportation’s existing pipeline safety programs
through 2015 while also placing new requirements on both pipeline
operators and regulators.
On the operators’ side of the ledger, the law increases maximum penalties for
individual violations to $200,000 from $100,000 and for a series of violations to
$2 million from $1 million. It also requires gas transmission pipeline operators
to report within 18 months any pipeline segments with insufficient maximum
allowable operating pressure (MAOP) records, to report incidents pushing
operating pressure beyond MAOP within 5 days of their occurrence, and to
consider seismic activity when evaluating pipeline threats.
DOT requirements
Among the requirements placed on DOT regulators, meanwhile, was maintaining
a map of high-consequence areas (HCAs) on the National Pipeline Mapping
System (NPMS) and to develop an NPMS awareness program within a year. It also
requires DOT within 18 months to both develop guidance for operators to share
system-specific information with emergency responders and establish time limits
on leak and accident notifications to both emergency responders and other state
and local officials.
The law also requires DOT’s Pipeline and Hazardous Materials Safety
Administration to issue new pipeline safety standards requiring operators to
install automatic or remote-controlled shut-off valves and excess flow valves
in new or replaced transmission pipelines. It also authorizes $110 million/
year in safety related grants for use by states in damage prevention programs,
emergency response training, technical outreach to local communities, and
one-call system improvements.
Pennsylvania acts
Pennsylvania Gov. Tom Corbett signed his state’s “Gas and Hazardous Liquids
Pipelines” Act into law in December 2011, authorizing its public utility
commission (PUC) to conduct pipeline safety inspections in coordination with
PHMSA and to regulate pipelines without declaring them a public utility. This
latter point was particularly important given concerns from property owners
regarding imminent domain, which public utilities can exert. If the PUC had been
allowed to regulate only pipelines designated as utilities many would have gone
uncovered (bad for safety) or had to have been reclassified as utilities (bad for
property owners).
Now that the property owners’ rights have been preserved, it is incumbent on
them and their communities to live responsibly in the company of the new
pipelines. The safety-related money authorized for disbursement to states
through PHMSA under the new federal pipeline safety law can help this happen.
Both the federal law and its Pennsylvania counterpart are encouraging. Not
just because they help codify the importance of pipeline safety, but because
they recognize that it is best achieved as a partnership: between regulators and
operators, between the federal government and smaller jurisdictions, and finally,
4 between all of these and the citizens at large.
Colonial Pipeline Co. Chief Executive Officer Tim Felt once aptly described “zero
leaks” as the only reasonable goal for the US pipeline industry (OGJ Online, Mar.
25, 2009). Without each of these parties’ active participation, this goal cannot
even be seriously approached, much less attained.
5
Oil & Gas Journal :: EXECUTIVE BRIEF :: sponsored by
Originally published January 9, 2012
COMPRESSOR OPTIMIZATION—1
EnergyTRANSPORTATION
recovery guides natural
gas pipeline system efficiency
COMPRESSOR OP TIMIZ ATION —1
6 Pressure
Global averageratio set gas 0.004773
quirement are development
about 60% moreofthan Exhaust
the other coun-
tries. Liquid Gas compressor
power
Oil &GAS
IRANIAN NATURAL Gas Journal
PIPELINES
Inlet air :: EXECUTIVE
High-pressure BRIEF
Table 3 :: TEMPERATURE,
sponsored by Power = 2.456 Mw
Table 4
Investigation air
Power REQUIRED POWER
Country km cu m/day Mw bar cu m/day)
able 3 shows the calculated power
irement for gas transfer of 1 mil- China 1,084 5 24.88 50 0.00459
The Netherlands 720 8.7 32.1 69 0.00512
cu m gas/km/day on three Iranian Romania 100 51 25 63 0.00491
US COMPRESSOR
1,200 OPTIMIZATION—1
14.3 92 77 0.00537
line networks. Iranian power re- Algeria 520 335 822 72 0.00472
Global average 0.004773
ement are about 60% more than
other coun-
.
IRANIAN NATURAL GAS PIPELINES Table 3 TEMPERATURE, Table 4
estigation Power REQUIRED POWER
ameters Trans- index, Compressor
ferred gas, Nominal Mw/ Input gas power
classic defi- Length, 1,000 power, (km × 1,000 temperature, requirement,
n of effi- Pipeline km cu m/day Mw cu m/day) °C. kw
cy of ther- Line 1 400 46 160 0.008696 10 39,651
per
d y n1 amillion
m i c cu mLinegas/
Line 2
3
656
656EXAMPLE 91.7
90PIPELINES 478
440
0.007943
0.007461
15 40,679
Table 2
20 41,693
Average 0.007905
ems centers Natural 25 43,692
30 43,678 Power
ws this power
ncreasing en- index for gas Compressor
35 44,653 index,
transferred, station
40 Maximum 45,617 Mw/
per unit of
ntries. Length, 1,000 power, pressure, (km × 1,000
ECONOMIC
fuel. suitable INVESTIGATION RESULTScompares
power indices.Country This article the
km Table 5
cu m/day Mw bar cu m/day)
umed
ws the calculated Compressor Equival- Annual
eases in ei- power ScrubberrequiredChina for gas transfer
power via pipeline
1,084
ent gas gas 5by EQUATION
24.88 50 0.00459
r gas transfer of 1pressure
mil- Thesaved,
Netherlands saving,720 saving,
8.7 32.1 69 0.00512
pressure
m/day on threefirst
temperature calculatingRomania
change
Iranian the kw power needed cu m/day 100 by each station perEf1=25
cu m51 wp \ Qf + E
million cu m 63 gas/km/day.
(1)
0.00491
10 psi decrease US 1,682 1,200
12,615 14.3
4,604,475 92
where: 77 0.00537
rks. Iranian
increase the power 5 psire-
decrease Algeria845 6,338520 335
2,313,188 Ef 822
= desired efficiency72 0.00472
5 psi increase Global
–853average –6,398 –2,335,088 wp = desired work, or work done for pres- 0.004773
about
er 60% more
produced 10than
Table 2increase
psi shows this power index
–1,714 –12,855for a variety –4,692,075 of countries. sure increase
compressor Qf = quantity of energy from the fuel
n- E = station’s electric power consumption
ons. Pres-
is a desired Table 3 shows the calculated power requirement for gas transfer of 1 million cu
IRANIAN TEMPERATURE,
ease in this
mNATURAL
context, GAS PIPELINES
temperature Table 3 Table 4
gas/km/day on three
HAIRPINIranian
COOLER-DESIGN pipeline networks.
EFFECTS Iranian
REQUIRED powerPOWER requirement Table 6are
ot. Power Optimum
quation 1 definesabout desired60% more
efficien- than the other countries.
Trans- index, Compressor
cooler
ferred gas, Nominal Mw/ Input gas Status quo designpower
fi- index for comparing
an different
Length, 1,000 power, (km × 1,000 temperature, requirement,
ons.
fi- Pipeline km cu m/day Input gas flow,MwMMscfd cu m/day) °C. 100 100kw
Investigation parametersOutlet gas pressure leaving origin station, psi 1,000 1,000
alculating Line
r- required
1 power
400 in- 46 Pressure drop
160in air coolers, %0.008696 9.6 1.5
Gas pressure in downstream station inlet, psi 10 780 789.739,651
es extracting 2 The
Lineenthalpy classic
656 definition
of output 91.7 Downstream478of efficiency of
station compressor thermodynamic
0.007943
power consumption, kw systems
15 centers 34,875on 33,04340,679
c Line 3 656 90 Downstream440 station compressor 0.007461 20 kw
power consumption decrease, 1,833 41,693
pressure and input
Average gas tempera-
increasing energy per unitannual
Equivalent of consumed savingfuel.
natural gas 0.007905 Increases
under optimum design 25in either
conditions, cu m pressure
5,017,199 or 43,692
rsfrom thermodynamic tables and 30 43,678
rmining gas flow rate. Thermal ef-can increase the power produced by compressor
n- temperature 35 stations. Pressure is
44,653
40 45,617
of and energy wasted
ncy a desired increase in this context, temperature
in different
ECONOMIC INVESTIGATION STRAIGHT COOLER-DESIGN EFFECTS
RESULTS Table 5 Table 7
ons
el. of the compressor
is not. are part of
Optimum
calculation. Compressor Equival- Annual
ei- Scrubber power ent gas gas EQUATION Status quo
cooler
design
re pressure saved, saving, saving,
rational conditions
changeEquation 1 kw
defines desired cu flm/day
Input gas efficiency,
ow, MMscfd ancuindex
m Ef = wp \ Qf + E 100 100 (1)
re
ulating a station
Outlet gas pressure leaving origin station, psi 1,000 1,000
10 psi using
for HYSYS soft-
comparing
decrease Pressure12,615
different
1,682 drop in air coolers, %4,604,475
stations. where: 14.5 1.4
he
e and existing
5 psidata allowed study845
decrease
Gas pressure
Downstream
in downstream station inlet, psi
6,338
station compressor 2,313,188
power consumption, kw
Ef = desired effi 808
ciency 823.7
5 psi increase –853 –6,398 –2,335,088 = desired work,29,672
wp kw 26,867
or work done for pres-
ed
hanging operating conditions
10 psi increase on
–1,714
Downstream
–12,855
Equivalent
station compressor power consumption decrease,
savings using optimum design, cu m sure increase
annual natural gas–4,692,075
2,805
7,678,365
pressor station performance
or Calculating, in-required power involves extracting Qf = quantity of energy from the fuel
E = station’s electric power consumption
ing
s- the pressureenthalpy
drop in scrubber
of output gas pressure and input gas
air coolers (Fig. 1).
ed temperature
he following conditions governedfrom thermodynamic tables
the simulation: • Output andgas pressure, 1,000 psi.
s Flow
context, temperature
HAIRPIN
flowCOOLER-DESIGN
rate passing through the station, 80 MMscfd.
determining gas EFFECTS and energy wasted in different Table 6
rate. Thermal efficiency Table 4 shows input gas temperature’s effect on compres-
Input gas pressure, 700 psi. sor station power under constant pressure conditionsOptimum
for
defines desiredsections
efficien- of the compressor are part of this calculation. cooler
Status quo design
or comparing different
Operational
Gas Journal | Jan. 9, 2012 conditions
Input gas flow, MMscfd 100 105100
Outlet gas pressure leaving origin station, psi 1,000 1,000
required power in- a station
Simulating Pressureusing
drop in air coolers, %
HYSYS software and existing data allowed 9.6 of
study 1.5
7
Gas pressure in downstream station inlet, psi 780 789.7
ng enthalpy ofchanging
output operating
Downstream station compressor
conditions power consumption,
on compressor kw performance , including
station 34,875 33,043
the
nd input gas tempera- Downstream station compressor power consumption decrease, kw 1,833
Equivalent annual natural gas saving under optimum design conditions, cu m 5,017,199
modynamic tables and
s flow rate. Thermal ef- Oil & Gas Journal :: EXECUTIVE BRIEF :: sponsored by
Iran’s gas system. The con- need to first define a num-
cluding article will focus on the effect of scrubbers and other
ber of consumption indices.
equipment in attempting to maximize capital return. Table 1 shows the energy consumed transmitting gas in
some countries.
Background COMPRESSOR OPTIMIZATION—1 Comparison, however, requires development of suitable
Iran is one of the largest consumers of natural gas in the indices. This article compares the power required for gas
world. Several transmission pipelines move natural gas transfer via pipeline by first calculating the power needed
Fuel Gas
compressor Stack
Combustion Hot
Pressure ratio set gas
Exhaust
z120109OGJtkh01
Inlet air
air
To air Turbine
Air compressor Power set
compressor
Table 4 shows input gas temperature’s effect on compressor station power under
constant pressure conditions for each period. Decreasing input gas temperature
allows pressurization with smaller amounts of power. Each 1° C. decrease in input
gas temperature causes roughly a 0.5% decrease in required power.
A scrubber causes pressure drop of 5-6.5 psi when clean and 18.5-24.5 psi when
dirty. Compressor station simulation calculations show a 5 psi pressure drop
reduces power requirements by 850 kw. Each 1 psi drop decreases compressor
power requirements by 0.39%.
Compensating for the pressure drop caused by air coolers requires increasing
compressor station pressure. Holding both input gas pressure to the compressor
and the output gas pressure from the station constant, each 1 psi pressure drop
caused by air coolers increases power requirement by about 0.27%.
8
Oil & Gas Journal :: EXECUTIVE BRIEF :: sponsored by
The classic defi- Length, 1,000 power, (km × 1,000 tempe
nition of effi- Pipeline km cu m/day Mw cu m/day) °C.
ciency of ther- Line 1 400 46 160 0.008696 10
Line 2 656 91.7 478 0.007943
modynamicCOMPRESSOR OPTIMIZATION—1
Line 3 656 90 440 0.007461
15
20
Average 0.007905
systems centers 25
30
on increasing en- 35
40
ergy per unit of
consumed fuel. ECONOMIC INVESTIGATION RESULTS Table 5
Sensitivity analysis Compressor Equival- Annual
Increases in ei- Scrubber power ent gas gas EQUAT
Sensitivity analysis used a
ther pressure pressure saved, saving, saving,
change kw cu m/day cu m Ef =
gas thermal valueorof 36,000
temperature
wher
10 psi decrease 1,682 12,615 4,604,475
kilojoule/cu m andcan gasincrease
turbinethe 5 psi decrease
5 psi increase
845
–853
6,338
–6,398
2,313,188
–2,335,088
Ef =
wp =
power produced 10 psi increase –1,714 –12,855 –4,692,075
efficiency of 32% (based
by compressor Qf =
E =
on the average of installed
stations. Pres-
sure is a desired
compressors) to investigate
increase in this context, temperature
solutions for decreasing compressor power requirements. HAIRPIN COOLER-DESIGN
Cooling input gas EFFECTS
by 1°
is not.
C. yielded roughly 55,000 cu 1m/year
Equation defines gas savings.
desired efficien-
cy, an index for comparing different
stations. Input gas flow, MMscfd
Researches also investigated pressure drop in the scrubber stemming
Outlet fromorigin station, psi
gas pressure leaving
Calculating required power in- Pressure drop in air coolers, %
nonobservance of design principlesenthalpy
volves extracting and, inofsome output cases, failure to replace
Gas pressure thestation inlet, psi
in downstream
Downstream station compressor power consumption, kw
scrubber filter in agas
timely manner.
pressure Tablegas
and input 5 shows
tempera- scrubberDownstream
pressure drop’s
station effects
compressor power consumption decrease, k
Equivalent annual natural gas saving under optimum design con
ture from thermodynamic tables and
on turbine performance.
determining gas flow rate. Thermal ef-
ficiency and energy wasted in different
This article only investigates STRAIGHT COOLER-DESIGN EFFECTS
sections of thepressure drops
compressor up to
are part of 25 psi, but field observations
show drops as large thisascalculation.
30-50 psi in scrubbers.
TRANSPORTATION
45
Minimum
40 Average
Maximum
35 Design
30
Thermal efficiency, %
25
20
15
10
z120109OGJtkh02
5
0
Zorya Nuovo Pignone Nevsky Siemens Ideal
Compressor type
each period. Decreasing input gas temperature allows pres- Sensitivity analysis
surization with smaller amounts of power. Each 1° C. de- Sensitivity analysis used a gas thermal value of 36,000 kilo-
Siemens
crease in inputturbines closely
gas temperature approximated
causes roughly a 0.5% de- to design
joule/cu m and operations.Other
gas turbine efficiency of 32%turbines
(based on thehad
crease in required power. average of installed compressors) to investigate solutions for
lower performance in most cases (Fig. 2).decreasing compressor power requirements. Cooling input
A scrubber causes pressure drop of 5-6.5 psi when clean
and 18.5-24.5 psi when dirty. Compressor station simula- gas by 1° C. yielded roughly 55,000 cu m/year gas savings.
tion calculations show a 5 psi pres- Researches also investigated pres-
Turbines lose
sure drop reduces most
power of their power through the exhaust
requirements suresystem.
drop in theInvestigation
scrubber stemming
by 850 kw. Each 1 psi drop decreases STATION COMPARISON Table 8
from nonobservance of design prin-
showed Siemens
compressor power turbines
requirements by losing less than others Power loss through this path.
ciples and, in some cases, failure to
Thermal through
0.39%. Station efficiency, chimney, replace the scrubber filter in a timely
type % kw
Compensating for the pressure manner. Table 5 shows scrubber pres-
Compressors
drop caused by air coolers requires Nevskey
Zorya
20.37
18.73
44,450
40,975 sure drop’s effects on turbine perfor-
increasing compressor station pres- Nuovo Pignone 21.13 49,210 mance.
Siemens 29.30 27,220
Investigating compressors
sure. Holding both input gas pressure revealed
Optimum designthe40 following characteristics: This article only investigates pres-
to the compressor and the output gas sure drops up to 25 psi, but field ob-
:: Compressor
pressure 260-13-1.
from the station constant, Installed in old Russian stations, real
servations showpower
drops asconsumption
large as 30-
each 1 psi pressure drop caused by air coolers increases 50 psi in scrubbers.
was higher than designed power consumption
power requirement by about 0.27%.
by 400-1,000 kw, growing as
Study included investigating reduced pressure drop in
rpm’s increased. air coolers, holding input gas pressure to the compressor
and output pressure from the station constant. Calculations
:: C
ompressor PCL 802-3. Operates with Nuovo Pignone turbo compressors.
COMPRESSOR COMPARISON SCRUBBER PERFORMANCE Table 10
Power consumption Polytrophic
wasConsumed400-1,000
Table 9
kw higher than designed and Out efficiency
of
–––––– efficiency, % –––– –––––– power, Mw –––––– allowable
5-10%Operational
Compressor
lower.
avg.
Design
avg.
Operational
avg.
Design
avg. Station
Clean,
0-10 psi, %
Dirty,
10-25 psi, %
range,
25-100 psi, %
Scrubbers
Scrubbers are responsible for nearly 10% of compressor stations’ energy loss.
More than 40% of scrubbers were dirty (resulting in a 10-25 psi pressure drop)
and nearly 10% were completely out of commission (resulting in >25 psi pressure
by each station per 1 million cu m gas/ EXAMPLE PIPELINES Table 2
drop). Pressure drop under optimum conditions is 5-10
km/day. psi.
Natural Power
Table 2 shows this power index for gas Compressor index,
transferred, station Maximum Mw/
a variety of countries. Length, 1,000 power, pressure, (km × 1,000
Air coolers
Table 3 shows the calculated power Country km cu m/day Mw bar cu m/day)
turbocompressor
Increases in ei- directly entering
Scrubber
Compressor an air
power
cooler bank.
Equival-
ent gas
Annual
gas EQUATION
ther pressure pressure saved, saving, saving,
change kw cu m/day cu m Ef = wp \ Qf + E (1)
or temperature
where:
Pressure
can increase thedrops more rapidly in
10 psi decrease
5 psi decrease a straight
1,682
845 configuration.
12,615
6,338
4,604,475
2,313,188 Researchers
Ef = desired found
efficiency a
5 psi increase –853 –6,398 –2,335,088 wp = desired work, or work done for pres-
power produced
14.3 psi pressure10drop in straight-designed
psi increase –1,714 –12,855air coolers.–4,692,075 Using hairpin sureair coolers
increase
by compressor Qf = quantity of energy from the fuel
E = station’s electric power consumption
reducesPres-
stations. pressure drop, decreasing gas consumption. Table 6 shows the effects of
sure is a desired
a reduced pressure loss
increase in this context, temperature
HAIRPIN COOLER-DESIGN EFFECTS
isin
not.hairpin air coolers.
Table 6
Optimum
Equation 1 defines
Optimizing air desired
coolerefficien- cooler
Status quo design
cy, an index for comparing different
design in a straight
stations. Input gas flow, MMscfd 100 100
Outlet gas pressure leaving origin station, psi 1,000 1,000
Calculating required
arrangement reduces power in- Pressure drop in air coolers, % 9.6 1.5
Gas pressure in downstream station inlet, psi 780 789.7
volves extracting enthalpy of output Downstream station compressor power consumption, kw 34,875 33,043
pressure
gas pressure and lossinput
even gasfurther
tempera- Downstream station compressor power consumption decrease, kw
Equivalent annual natural gas saving under optimum design conditions, cu m 5,017,199
1,833
Operational conditions
points allowed definition
Input gas flow, MMscfd
Outlet gas pressure leaving origin station, psi
100
1,000
100
1,000
Simulating a station using HYSYS soft- Pressure drop in air coolers, % 14.5 1.4
of potential
ware and existing savings and
data allowed study
Gas pressure in downstream station inlet, psi 808 823.7
11
Downstream station compressor power consumption, kw 29,672 26,867
ofrecovery.
changing operating Downstream station compressor power consumption decrease, kw 2,805
Energy savingson
conditions Equivalent annual natural gas savings using optimum design, cu m 7,678,365
compressor station performance , in-
cluding the pressure drop in scrubber
and air coolers (Fig. 1).
Oil &governed
Gas Journal :: EXECUTIVE BRIEF :: sponsored by
The following conditions the simulation: • Output gas pressure, 1,000 psi.
20 crease in input gas temperature causes roughly a 0.5% de- joule/cu m and gas turbin
Thermal
crease in required power. average of installed compr
15
A scrubber COMPRESSOR
causes pressureOPTIMIZATION—1
drop of 5-6.5 psi when clean decreasing compressor po
10 and 18.5-24.5 psi when dirty. Compressor station simula- gas by 1° C. yielded rough
tion calculations show a 5 psi pres- R
z120109OGJtkh02
5 sure drop reduces power requirements sure
by 850 kw. Each 1 psi drop decreases STATION COMPARISON Table 8
from
0possibilities included reducing:
Power loss
compressor Nuovo
Zorya power requirementsNevsky
Pignone by Siemens
Thermal
Ideal
through ciple
:: Energy loss from scrubber pressure drop. Station efficiency, chimney,
0.39%. Compressor type repla
type % kw
:: Energy lossCompensating
from air coolerfor pressurethe pressure
drop. man
Nevskey 20.37 44,450
each period. drop
Decreasing inputcaused by air allows
gas temperature coolers requiresSensitivity analysis Zorya 18.73 40,975 sure
:: Electrical energy consumption inpres-
air coolers. Nuovo Pignone 21.13 49,210
surization with smallerincreasing
amounts of compressor
power. Each 1° station
C. de- pres- Sensitivity analysis used a gas thermal
Siemens 29.30 value of27,220
36,000 kilo- man
crease in input gas temperature causes roughly a 0.5%
sure. Holding both input gas pressure de- joule/cu m and gas turbine
Optimum design efficiency 40 of 32% (based on the Th
crease in required power.
to the compressor andreducing
the output gas average of installed compressors) to investigate solutions for sure
Potential
A scrubber causesenergy
pressurerecovery lay
drop of 5-6.5 psiinwhen clean decreasing compressor power requirements. Cooling input
energy
and 18.5-24.5 whenpressure
psileaving dirty. from the
compressor
Compressor station
stations
station constant,
through
simula- gas by 1° C. yielded roughly 55,000 cu m/year gas savings. serva
tion calculations show each5 1psipsi pressure drop caused by air coolers increases 50 psi in scrubbers.
the chimney.a Energy pres-
captured by reducing pressure drop canResearches be applied also
toinvestigated pres-
sure drop reduces powerpower requirement by about 0.27%.
requirements sure drop in the Study included
scrubber stemming investi
transmission
by 850 kw. Each 1 psi dropinstead.
decreases STATION COMPARISON Table 8
from nonobservance of design prin- input
Power loss
air coolers, holding
compressor power requirements by Thermal through ciples and, in some cases, failure to
0.39%. Station efficiency, chimney, replace the scrubberand output
filter in apressure
timely from
Table 8 shows
Compensating for thethe two parameters used in calculating energy
pressure
type % kw savings
manner. Table and
5 shows scrubber pres-
Nevskey 20.37 44,450
thermal
drop caused by airrecovery values.
coolers requires Zorya 18.73 40,975 sure drop’s effects on turbine perfor-
increasing compressorCOMPRESSOR
station pres- COMPARISON
Nuovo Pignone
Siemens
21.13
29.30
49,210
27,220
mance.
Table 9 SCRUBBER PERFORMANCE
sure. Holding both input gas pressure Optimum design
Polytrophic 40 Consumed This article only investigates pres-
Energy lost
to the compressor and through
the output a gasstation’s chimney
–––––– efficiency, % ––––reduces gaspower,
–––––– turbine
Mw sure thermal
–––––– drops upefficiency.
to 25 psi, but field ob-
Operational Design Operational Design Clean,
pressureStudying
from the the
station constant,
polytrophic
Compressor efficiency and
avg. avg. consumption avg.
servations
poweravg. show
of compressors drops as large as
also
Station 30-
0-10 psi, %
each 1 psi pressure drop caused by air coolers increases 50 psi in scrubbers.
showed potential
power requirement Siemens
by about to save70.15
0.27%. large volumes 76.65 of fuel gas
10.53
Study (Table 9).
included 9.54
investigating reducedNo. 1
pressure drop in48
BCL605 68 74.9 17.3 16.3 No. 2 31.1
PCL802-3 71.3 78.6 air coolers,
7.9 holding input
7.2 gas pressure to the
No. 3 compressor
24.5
260-13-1 –– –– and output 4.5pressure from No. 4 Calculations
3.9the station constant. 15.2
106 Table 10 shows scrubber performance. Oil & Gas Journal | Jan. 9, 2012
Energy consumption
This article initially outlined existing energy consumption norms in gas pipelines and
describED essential parameters and criteria for comparing operational conditions
with design conditions and optimum conditions. It then discussed the potential
energy savings found in each compressor station component. It will now turn to
available means for realizing these savings and an economic analysis of the results.
12
Oil & Gas Journal :: EXECUTIVE BRIEF :: sponsored by
COMPRESSOR OPTIMIZATION—1
Gas turbines
Methods for energy savings and recovery in compressor stations’ gas turbines
include:
:: Using a recuperator.
Air entering a combustion chamber is preheated by hot air leaving the turbine
and entering a recuperator. This system, however, is suitable only for gas
turbines with low power and low pressure ratios. High-pressure turbines suffer
from low efficiency when using a recuperator since the pressure loss is greater.
Recuperators could only operate at those Iranian compressor stations using
Nevsky systems.
:: Cooling the input air.
:: Energy
irect loss
D evaporation system. Ambient, 35° C.
29° C.
20,097 20,097 20,097
21,252
20,097 20,097
27° C. 21,559
Determining energy balance is the best
:: way
Absorption, mechanical
to compare design conditions and
21° C.
15° C. 23,100
23,407
23,100
13
than points
determine energy loss others through this path. energy savings
and determine Aspen-HTFS+
Gas turbine efficiency under software-based simulation
design conditions, % compared air 28 cool-
chimney. Gas turbine
er efficiency with
function equipped with parameters.
design Kalian system, % 30
potentials.
Compressors
Investigating efficiency of selected compressor stations
Researchers used designed gas flow conditions to com-
Investigating compressors revealed the following character- pare air cooler efficiency with international standards. The
along the three pipelines showed it to be lower than:: de- :: sponsored
istics: Oil & Gas Journal EXECUTIVE BRIEF actual pressure drop of by9.6 psi exceeded expectations of 8.5
signed. Some stations• with 10-25260-13-1.
Compressor Mw gasInstalled
turbinesininstalled Scrubbers
old Russian stations, psi.
Net outlet
signed. Somepowerstations 1,803
with 10-25 1,445 Mw gas turbines 1,055 installed 3,193 Scrubbers 183
TRANSPORTATION
Gas turbines
Methods
Oil & Gas Journal for energyBRIEF
:: EXECUTIVE savings::and recoverybyin compressor sta-
sponsored
tions’ gas turbines include:
Originally published March 5, 2012
COMPRESSOR OPTIMIZATION—2
(Conclusion): Energy
recovery, scrubbers offer
keys to efficient operation
by Shaghayegh Khalaji
E
nergy recovery and efficient scrubber technologies can help
minimize energy loss on natural gas transmission systems.
Iran’s natural gas pipeline system requires roughly 60% more power/
unit shipped than the global average. Iranian gas does not have to
travel particularly long distances, but its compressor units are of relatively low
efficiency and the booster compressor stations somewhat underpowered. The
system’s design also occurred when domestic gas prices in Iran were very low,
reducing the emphasis placed on efficiency.
The first article of this series (OGJ, Jan. 9, 2012, p. 104) outlined existing energy
consumption norms in gas pipelines, describing essential parameters and criteria
for comparing operational conditions with design conditions and optimum
conditions. This concluding article will focus on the effect of scrubbers and other
equipment in attempting to maximize capital return.
Gas turbines normally work at lower efficiency than their design condition.
Reconstructing compressor stations and replacing gas turbines can increase
thermal efficiency. Lost heat can be recovered to generate electricity via a
Rankine power cycle. Turboexpanders can use reduction in gas pressure to
generate power.
Cooling a compressor station’s gas feed, meanwhile, can decrease its power
16 requirement. Either a chiller or an air cooler can cool the gas feed. Inlet air
cooling can prevent loss of output when ambient temperatures are high.
Preliminary calculations, however, showed a chiller uses too much energy to
be economical.
ION— 2 this
( Closs
o or
n crecovering
l u s i othe
n lost
) energy were defined. Energy saving possibilities
included reducing:
:: Energy loss from scrubber pressure drop.
:: I nternal Oil
rate& of
Gasreturn
Journal | Mar. 5, 2012
(Equation 2).
:: Capital return time (Equation 3).
18 :: Net present value of investment (Equation 4).
TRANSPORTATION
TRANSPORTATION
STATION PERFORMANCE, MAXIMUM OUTLET GAS COOLING Energy recovery, scrubbers Table 5
Million cuwhere:
t= 0 t
Station Gw-hr/yr Million cu m/yr $, thousand m/yr $, thousand Million cu m/yr $, thousand Million cu m/yr $, thousand
where:
include:
No. 1 119 49 25,000 ––CF1 = Cash flow–– 3.72 3,710 2.7 700
No. 2 25 –– –– 1.07 –– t = Capital
0.6 return time
1B t = Profits during time =0.89
t––at 3,200 350
:: E
No.
xpenses
3
No. 4
and incomes
––
64
10
26
set at
25,000
25,000 1.65
1,834
3,079 1.68
––
2,300
1.4
rt = Capitalinterest
1.2
700
rate
350 during t
No. 5 40 –– –– 1.63
fixed prices
3,146 1.63 2,877 0.8 350
2010-11
No. 6 levels.
–– 10 25,000 1.46V t = Annual1,834 –– - –– B t = Profits
1.7 resulting700
from the
No. 7 70 42 25,000 2.92
variable costs dur
3,560 –– –– 1.9 700
No. 8 35 –– ––- 1.54 3,299 0.68 2,050 project
0.9 during 350at fixed
t
ing time = t at fixed
:: R
eal interest rate for net value
No. 9 72 –– –– 2.44 9,184 2.02 2,966 1.1
prices 350
No. 10 –– 12 25,000 0.75 prices
1,780 –– –– 2.8 700
No. 11 99 41 25,000 1.69 3,329 2.26 2,410 3.2 1,050
Ft = Fixed expenses during t at
calculation of 5%.
No. 12 26 –– –– 0.9I 0 = Basic 3,146
and capital require
1.67 - 2,266 0.9 350
fixed prices
ments
:: O il price in international V t = Annual variable expenses
eters and criteria
offor comparingyielding
operationalaconditions with - F Scrubbers during t at fixed prices
markets $60/bbl, / (B -V )
t
t t T
-I = 2 (2) 0
design conditions and optimum conditions. This concluding Scrubbers
(1 + IRR )
t =0
help separate
t
t
excess liquids
I = or undesirable
Initial expenses andpar-
capi - 0
natural
article gasonprice
will focus of of$0.25/cu
the effect scrubbers and other equip-
where: ticles from the gas stream as it passes through a compressor
tal requirement
ment
m inand
attempting
a power to maximize
supplycapital
pricereturn.
of station,
IRR = Internal
t
keeping
return thecap
rate of stream
- properly dehydrated.
Gas turbines normally work at lower efficiency than their ital during Scrubbert performance is best improved through:
/ (B(1- +F r-)V ) - I = NPV
t
t t t
$0.09/kw-hr. (4) 0 t
design condition. Reconstructing compressor stations and • Redesign, replacement. t
B t = Advantages resulting from t= 0 t
replacing gas turbines can increase thermal efficiency. Lost • Timely replacement of filters.where:
::heat
Iranian thermal
can be recovered to generate plant via a Rankine the project
power electricity during t at
As mentioned in the first article
NPV oft =this
Netseries,
presentscrubber
value of the
power cycle. Turboexpanders can use reduction in gas pres- fixed prices
pressure drop can sometimes exceed 25 psi. This scale of t
efficiency of 35%. F1 = Annual fixed expenses
investment
during either scrubber replacement or use
during
sure to generate power. pressure drop requires
rt = Capitalinterest rate during t
:: RCooling
ankine a compressor station’s gas feed, meanwhile, can t at
cycle technical of fixed
a newprices
scrubber in parallel with the existing one. Calcu-
B t = Profits resulting from the
decrease its power requirement. Either a chiller or anVtair = Annuallations show
variable gas savings when scrubber
expenses performance was
data
cooler canyielding a design-cycle
cool the gas feed. Inlet air cooling can prevent during optimized of 6.1 million cu m/year. project during t at
t at fixed prices
lossefficiency
of output when fixed prices
of ambient
17.4% temperatures are high. Prelimi- Table 1 and
I 0 = Initial expenses shows
capfive
- test stations’ gas savings achieved via
nary calculations, however, showed a chiller uses too much scrubber optimization. Savings are Ft based
= Fixedon expenses during
the unit’s aver-t at
ital requirement
energy to be economical. age thermal efficiency and 1,388 workingfixed hr/year (Mar.
prices 21,
After investigation determined energy loss levels, poten- 2009-Mar. 20, 2010). V t = Annual variable expenses
Cost
tials foranalysis
mitigating this loss or recovering the lost energy during t at fixed prices
were defined. Energy saving possibilities included reducing: Air coolers I 0 = Initial expenses and capi -
Five basic energy optimization
• Energy loss from scrubber pressure drop. Both redesign and replacement and a simple bypass of air
19 • Energy emerged
solutions loss from air through
cooler pressure
flowdrop.
• Electrical energy consumption in air coolers.
tal requirement
coolers can reduce gas consumption. Table 2 shows the vol-
umes of gas saved optimizing air cooler performance under
:: Scrubber optimization.
STATION PERFORMANCE, OUTLET GAS TEMPERATURE SAME AS AMBIENT Table 4
Station capacity, cu m/hr <10,000 10,000-50,000 50,000-100,000 100,000-200,000 200,000-500,000 500,000-1 million
Average throughput, cu m/hr 9,000 37,000 72,380 139,730 371,000 866,000
Average power production, Mw 0.20 0.81 1.59 3.07 8.16 19.04
Economic investigation exposed the characteristics of each feasible solution
Heat demand, Mw 0.249 1.02 2.00 3.86 10.25 23.92
(Table 7).
STATION PERFORMANCE, MAXIMUM OUTLET GAS COOLING Table 5
Station capacity, cu m/hr <10,000 10,000-50,000 50,000-100,000 100,000-200,000 200,000-500,000 500,000-1 million
Average throughput, cu m/hr 9,000 37,000 72,380 139,730 371,000 866,000
Table 8 shows the results of economic analysis of each solution using the
Average power production, Mw
Heat demand, Mw
0.18
0.14
0.76
0.57
1.48
1.11
2.86
2.14
7.6
5.67
17.74
13.24
assumptions presented earlier. Energy recovery in chimneys and its use for
electric power production
STATION PERFORMANCE, andGAS
PREHEATED INLET scrubber optimization are economically feasible inTable 6
Station capacity, cu m/hr <10,000 10,000-50,000 50,000-100,000 100,000-200,000 200,000-500,000 500,000-1 million
all Average
stations,
throughput,and
cu m/hrthe return
9,000 rate37,000
of the project72,380during the exploitation
139,730 term (less866,000
371,000
Average power production, Mw 0.22 0.912 1.78 3.44 9.15 21.35
than 8 years) is more 0.43
Heat demand, Mw
than 31%. 1.75 3.43 6.63 17.60 41.07
design
No. 1 condition.
25,040 Reconstructing
17.0 29compressor
33,871 stations 41 and 44,095 • Redesign, –– replacement.
–– 14 1,523 91 3,678
No. 2 5,261 3.6 29 7,116 –– –– –– –– –– –– 36 566
replacing
No. 3 gas turbines
–– can
–– increase –– thermal efficiency.
–– ––Lost –– • Timely –– replacement
–– of––filters. –– 43 1,472
No. 4 13,467 9.1 29 18,216 13 8,610 –– –– –– –– 36 1,132
heat
No.can
5 be 8,417
recovered to 5.7generate 29electricity
11,385via a Rankine
–– –– As mentioned
–– in
–– the first
–– article of –– this series,
51 scrubber
906
power
No. 6 cycle. Turboexpanders
–– –– can––use reduction –– in gas––pres- pressure
–– drop
6 can110sometimes–– exceed–– 25 psi. 55 This 1,981
scale of
No. 7 14,730 10.0 29 19,924 33 33,295 7 359 –– –– 62 2,320
sure
No.to8 generate
7,365power. 5.0 29 9,962 –– pressure
–– drop requires
–– –– either
–– scrubber –– replacement
59 or use
1,075
No. 9 15,150 10.3 29 20,493 –– –– –– –– –– –– 31 963
Cooling
No. 10 a compressor
–– ––station’s––gas feed, meanwhile,
–– –– can of––a new –– scrubber –– in parallel
–– with the –– existing95 one.3,847
Calcu-
20
No. 11 its20,832
decrease 14.1
power requirement. 29Either a28,178
chiller or an32 air 31,752 lations ––
show ––
gas savings 12
when 724
scrubber 109
performance 4,526was
No. 12 5,471 3.7 29 7,400 –– –– –– –– –– –– 59 1,075
cooler can cool the gas feed. Inlet air cooling can prevent optimized of 6.1 million cu m/year.
loss of output when ambient temperatures are high. Prelimi- Table 1 shows five test stations’ gas savings achieved via
nary calculations, however, showed a chiller uses too much scrubber optimization.
• Internal Savings
rate of return are based
(Equation 2). on the unit’s aver-
EXPANSION
energy to be TURBINE DATA
Oil & Gas Journal :: EXECUTIVE •BRIEF
economical. Table 9 age Capital ::
thermal efficiency and
sponsored
return 1,388
by 3).
time (Equation working hr/year (Mar. 21,
After
Gas flowinvestigation
<10,000 cu m/hr determined energy loss levels, poten- 2009-Mar.
• Net 20, 2010).
present value of investment (Equation 4).
Power capacity Mw 0.2
Station $1,000 Mw % $ % $ % $ % $ % $
quired to do the same quantity of work. Tables 4, 5, and Five basic energy optimization solutions em
ECONOMIC ANALYSIS, VARIABLE CRUDE PRICES Table 11
6 show the savings Gas
realized by this approach, respectively flow process study at the sample compressor s
120 Oil & Gas Journal | Mar. 5, 2012
showing powermillion use cu when
savings, outlet-gas temperature is the same
Savings,
• Heat recovery from chimney gases and
as ambient temperature, m/year $ millionwhenYears outlet-gas temperature
–––––––––––––––––– is
IRR, % ––––––––––––––––production.
–––––––––––––––––––––– NPV, $ ––––––––––––––––––
cooled as$/bbl
Oil price, much as––possible,
ORC cycle, electric
–– and –– when 10inlet gas
25 is preheated.
50 65 80 • Gas 10 turbine 25 reconstruction.
50 65 80
21
Optimized scrubber 2.7 0.7 10 0 32 75 100 124 –140 1,005 2,914 4,059 5,205
ported and assessed
Optimized air cooler 3.72 in financial
3.7 10 terms.– The indices
12 8such 17as- 25 Economic
–3,737 investigation
–2,159 471 exposed
2,049 3,627 the cha
Bypass route 1.07 –– –– –– –– –– –– –– –– –– –– –– ––
sessments use are: each feasible solution (Table 7).
• Cash flow (Equation 1). Table 8 shows the results of economic an
solution using the assumptions
Oil & Gas presented
Journal earlier. Energy re-
:: EXECUTIVE Table 9::contains
BRIEF expansion
sponsored by turbine data for both small
covery in chimneys and its use for electric power production (less than 10,000 cu m/hr normal gas flow) and large units
COMPRESSOR OPTIMIZATION—2
present value of the investment in a small system for the 4-year exploitation
period will be $117,000 and in large systems $18.62 million. Mechanical recovery
is economically justifiable and provides a basic solution for energy recycling in
compressor stations.
Solution prioritization
As shown in Part 1, only Organic Rankine cycle for energy recovery and
optimization of scrubbers are economically feasible in all instances, the rest of
the solutions being viable only in particular situations.
Table 11 shows detailed economic analyses for sample stations using five different
crude prices.
22
Oil & Gas Journal :: EXECUTIVE BRIEF :: sponsored by
Originally published April 2, 2012
by Gordon Lawrence
T
urnarounds—also known as planned outages or shutdowns—
are major events for refineries and other petrochemical facilities.
They typically cost large sums of money to execute. Cost estimates
for turnarounds, however, have historically been rather inaccurate.
This can often be traced to an inability accurately to calculate allowances and
contingency for “unknowns” in the estimate.
This article examines the allowances and contingencies that are needed, the
different methods used for calculating them, and how much money is typically
allocated and required. From this, it provides some “rule of thumb” benchmarks
for turnaround estimators to use.
It then will discuss how the benchmarks might be refined, the advantages
of tracking the use of allowances and contingencies during execution of a
turnaround, and finally some recommendations for steps that estimators can
take to improve their estimating capabilities for allowances and contingencies.
23
Oil & Gas Journal :: EXECUTIVE BRIEF :: sponsored by
Analysis yields turnaround benchmarks for allowance, contingency
145
140
135
130
125
120
115 Mean 116%
110 110% Median = 109%
z120402OGJPLA01
105
100 100%
95
90 90% P10 89%
85
Source: Expected outcome for 10% accuracy Actual outcome
From this sample we can see that turnarounds typically overrun their estimates
by an average value of 16%. Furthermore, the variability around that average is
on the order of –27% to +43%, which is far wider than the ±10% at 80% confidence
that most turnaround teams claim to be their estimate-accuracy level.
The reasons for this weakness in estimating can partly be explained by a lack of
knowledge among owner companies’ estimators as to how much money to allow
in the estimate for the unknowns in their turnaround scope.
Most turnarounds will also include a project scope, consisting of tie-ins (for future
capital projects) that can only be installed when the plant is shutdown.
The scope of both maintenance and project that is known at the time of “scope
freeze” can generally be estimated by the turnaround estimator, based on
historical knowledge. Scope freeze is the date set by the team, by which time all
interested parties—inspection department, plant operators, project teams, so
forth—are to have offered all tasks they would like included in the turnaround.
Those tasks have been challenged and accepted as being unable to be done during
normal operations. This typically occurs around 9 months before the shutdown.
Problems arise, however, with allowing for unknowns. These consist of the
additional work that inevitably creeps into the scope after the scope freeze date
and the costs that grow beyond the original estimate, due to underestimation of
quantities, optimistic estimation of productivity, changes in material costs, and
so forth.
:: T
rue contingency. This refers to additional funds for items that simply end up
costing more than originally allowed for in the estimate or for completely
unexpected activities.
The categories of forgotten, overlooked, and emerging work are usually lumped
together by turnaround estimators. This combined category is then typically
known simply as either emerging work or additional work.
At first glance, Monte Carlo appears to offer the most scientific and by extension
the most accurate method for calculating allowances and contingency. One study,
26 however, casts some doubt on that assumption.2 It study looked at Monte Carlo
The referenced article does not discuss in detail why Monte Carlo does not
provide the expected superior results to the other methods, but it seems
reasonable to assume that part of the reason is that Monte Carlo analysis is not
always carried out with sufficient rigor and skill. The study looks at whether
Monte Carlo was used, not whether Monte Carlo was used correctly.
Monte Carlo therefore may well be useful for contingency setting but only if
used with sufficient rigor. Since most turnaround teams lack the skills and
training in-house, they would need to look externally for support to implement
this method successfully.
Turnaround planning and Includes: owners’ turnaround team and contractors’ planning and
preparation (office work) preparation costs
Total Equipment rental Includes: cranage, bundle puller, etc. (e.g., rolling equipment)
turnaround
budget
Includes: costs associated with provisioning of temporary facilities;
Logistics accommodation; infrastructure
Shutdown field
execution
Forgotten, emerging
Total
allowances
and Discovery
contingency
Contingency
z120402OGJpLa02
Direct labor
Project (turnaround Labor
execution Indirect labor
only) base cost
Materials
We have used the definitions as laid out in Fig. 2. The benchmarks are generally
shown as percentages of one of the following:
:: T
he total maintenance and project base cost (i.e., excluding allowances and
contingency).
:: The total maintenance base cost.
The data sets used to calculate the benchmarks are drawn from the AP-Networks
28 turnaround database mentioned earlier.
Mean
15 15%
10 9% Median = 13%
5 Median = 8%
4%
0
–5
–10
–1 std. dev. –12%
–15
Included Used
35
30
25
20 Mean 20%
%
–5
–1 std. dev. –6%
29 –10
*Maintenance and projects. Included Used
:: F
ig. 3a shows the total allowances and contingency as a percentage of
maintenance base cost plus project base cost. Two benchmarks are given: how
much teams included in their estimates and how much was actually used by
those teams to complete the turnaround.
As can be seen, the teams included around 9% but actually used about 13-20%,
suggesting that teams were consistently underestimating how much they would need.
In addition, the variability (the vertical line shows the standard deviation) in
the value of how much was actually used, compared with the variability in the
value of how much was included suggests that teams are thinking in terms of
preconceived percentages that take insufficient notice of the amount of risk and
uncertainty in their estimates.
Note: For those attempting to take a “back-bearing” and relate Figs. 3a and
3b to Fig. 1, bear in mind first that Fig. 1 is calculated as a percentage of total
turnaround budget, whereas Figs. 3a and 3b are calculated as percentages of total
base cost and of maintenance base cost, respectively. Secondly, bear in mind that
Fig. 1 uses a larger data set than is used for Figs. 3a and 3b.
We were able to use a larger set for Fig. 1 because, while most turnaround teams
are able to state their total budget and actual costs, far fewer teams track costs in
sufficient detail to provide accurate information about the use of allowances and
contingency within those totals. This in turn raises another interesting discussion
point: The teams that can differentiate their allowances and contingency seem to
overrun their budgets by less than the teams that cannot.
:: F
ig. 3a gives a benchmark comparing the allowances and contingency to
the total base cost for maintenance and projects. The amount of project
involvement in a turnaround, however, can vary considerably. Therefore, in
Fig. 3b, we look at total allowances and contingency as a percentage of the
maintenance base cost only (i.e., without the project base cost).
Despite this change in comparison basis, the results shown in Fig. 3b remain
similar to those in Fig. 3a. This time the amount included is 10%, with the used
amount around 15-20%. Once again, the variability in the amount used is much
30 greater than the variability in the amount included.
Percentage breakdown
The previous two benchmarks looked at allowances and contingency as a single unit
amount. This section looks at each allowance or contingency category separately.
:: F
ig. 4 shows each allowance
TOTAL ALLOWANCE, CONTINGENCY FIG. 4
or contingency category as a
percentage of the total allowances
Forgotten,
and contingency. The pie chart True contingency 39% emerging 19%
z120402OGJpLa04
or contingency category as Discovery 42%
a percentage of the total
maintenance budget (maintenance
base estimate plus all allowances
and contingency). Again, the mean and median are not greatly different.
Greater granularity
The benchmarks given in the earlier section are offered to guide turnaround
estimators who have no other in-house data to begin using expert judgment or a
predetermined percentage in their turnaround estimates.
These benchmarks, however, simply look at the overall average for turnarounds.
From previously published research,3 4 we are already aware that certain
characteristics of a turnaround and of turnaround planning affect turnaround
cost predictability. These characteristics are listed below.
Since these affect cost predictability, they will, by extension, affect the amount
of allowance and contingency required. Hence a next step in providing greater
31 granularity in the benchmarks will be to provide benchmarks that take account
4.6% Median =
4 4.4%
Median = 2.9%
3 2.8% 2.7%
z120402OGJpLa05
2 –1 std. dev. 2.1%
1 0.9%
0
Forgotten, emerging work Discovery work Contingency
*Each category expressed as a percentage of total maintenance budget.
of these characteristics.
:: T
urnaround complexity. For example, as shown in Fig. 6, if we examine the
complexity of the turnaround (where complexity is measured as a function of
30
20
10
%
0
z120402OGJpLa06
–10
–20
Low complexity Medium complexity High complexity
32 *Each category expressed as percentage of total turnaround budget.
Source: Reference 4
20
10
0
z120402OGJpLa07
–10
–20
Suboptimal Borderline Optimal
Improving turnaround readiness index (TRI)
*Each TRI category expressed as a percentage of total turnaround budget.
Source: Reference 4
the percentage of the turnaround that involves project work, the total field-
labor hours, and the interval time between turnarounds),5 we can see that
more complex turnarounds appear to overrun more (as a percentage of budget)
than less complex turnarounds.
:: T
urnaround readiness. Similarly, as shown in Fig. 7, the level of turnaround
readiness (i.e., the level of planning and preparation carried out for the
turnaround, before the shutdown), as measured with the AP-Networks
Turnaround Readiness Index (a quantitative measure, arising from the
turnaround readiness pyramid questionnaire6), affects cost predictability.
Better prepared turnarounds unsurprisingly have fewer cost overruns.
:: C
ontract strategy. One other interesting point, raised by many turnaround
teams, is whether field-labor contract payment type (e.g., unit rates, time,
and materials, and so forth) affects turnaround cost predictability. One study
suggests that, in comparison with complexity and readiness, contract type
appears to have little to no effect on cost predictability in turnarounds.7
33
Oil & Gas Journal :: EXECUTIVE BRIEF :: sponsored by
Analysis yields turnaround benchmarks for allowance, contingency
The cost estimator will frequently find his or her calculations challenged by
management. If the estimator can produce a logical argument for how each
allowance and contingency was calculated, this strengthens his or her argument
for retaining the funds in the estimate.
If we take each of the four categories in turn, we can see that in fact only one of
the four categories, “true” contingency, really needs to be subject to a calculation
technique such as expert judgment, predetermined percentage, or probabilistic
risk analysis.
:: F
orgotten, overlooked work. If a team is conducting a thorough scope-gather exercise,
involving all groups with a stake in adding scope to the turnaround, then this
category should ideally be zero in every estimate. Tracking its actual value will
give teams a clue as to how effective are their scope gathering techniques.
:: E
merging work. It should be possible to estimate emerging work, based on
knowledge of the reliability of the plant. For example, “We have X months
between now and the shutdown. Typically, we have Y valves/month that fail.
Therefore we should allow for X*Y failures in the estimate as emerging work.”
:: Discovery work. It should be possible to make an educated guess at discovery
work, based on the operator’s knowledge of how well the plant is operating,
34 before the shutdown. For example, “Column X is only operating at 50% of
capacity; therefore, we fully expect that when we open it there will be tray
damage to repair.”
:: ( True) contingency. True contingency is the only category that will still need to be
left to expert judgment, predetermined percentage, or probabilistic risk analysis.
Forgotten, overlooked work, emerging work, and discovery work all now become
“allowances” rather than “contingency” and can be assigned to specific line items
in the cost estimate. They no longer need to be amorphous buckets of money,
subject to suspicion and deletion. A clear case can be made for each cost item.
Following the same reasoning, just as with capital projects, the true contingency
now becomes money that, by its very nature cannot be assigned to any specific
line items, but which history or experience shows will be required somewhere
during execution of the project for some element of the scope that was
underestimated or overlooked.8
This then brings turnaround estimating more in line with capital cost estimating,
where, if you can assign it to a specific line item in the estimate, it’s an allowance;
and if you can’t but historical experience tells you that you’ll need the money
somewhere, it’s a contingency.
Looking further now makes clear that the only one of the four categories that
should be affected by the presence of capital projects in the shutdown scope
is true contingency, since the three allowance categories all clearly relate to
the maintenance scope only. Recognizing this should also help to make the
calculation and use of contingency in turnaround budgets less opaque.
AP-Networks will continue adding to its database and examining this topic,
delving deeper into the variables (complexity, readiness, contract strategy, etc.)
that may affect the need for allowances and contingency.
References
1. http://www.turnaroundbenchmarking.com/database.html.
2. Burroughs, S.E., and Juntima, G., Exploring Techniques for Contingency Setting. AACE
International, Washington, June 13-16, 2004.
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Company Description:
With almost 70 years of experience, WIKA Instrument Corporation is the leading
global manufacturer of pressure and temperature measurement instrumentation,
producing more than 43 million pressure gauges, diaphragm seals, pressure
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offers a broad selection of stock and custom instrumentation as well as dedicated
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These value-added services include the Full Audit Service Team (FAST) for the
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the right gauges are on the shelf – eliminating guesswork when a replacement
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discovery during the project to avoid cost over-runs, scope creep and leaks
upon start-up. With our Instrument Safety Training, FAST engineers teach your
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