March 2017

Maintenance and Reliability

Implement proactive asset management techniques

The drop in crude oil prices since 2014 has impacted both upstream producers and downstream players. Upstream producers—those responsible for exploration, drilling and production—were the first to feel the effects. While refining margins benefitted from the drop in crude oil pricing, they began to suffer when record surpluses of gasoline and diesel flooded the market a year later.

Natarelli, J., T.A. Cook Consultants Inc.

The drop in crude oil prices since 2014 has impacted both upstream producers and downstream players. Upstream producers—those responsible for exploration, drilling and production—were the first to feel the effects. While refining margins benefitted from the drop in crude oil pricing, they began to suffer when record surpluses of gasoline and diesel flooded the market a year later (FIG. 1). Both industry sectors were forced to make difficult choices over the past 2 yr. The price slump has forced significant changes to traditional asset operations, maintenance and turnarounds. Many employees in each sector have lost their jobs, and companies have cut capital spending and investment.

FIG. 1. US ending stocks of crude oil and petroleum products, Mbpd. Source: US EIA.
FIG. 1. US ending stocks of crude oil and petroleum products, Mbpd. Source: US EIA.

Although the future is uncertain, one thing that will remain constant is the dependence on fixed equipment. Companies in this sector rely heavily on their assets; for many, they are their most significant investment. In this challenging commodity economy, capital investments are down and existing plant assets must be proactively maintained. For many companies, maintaining assets proactively, as opposed to reactively, requires a cultural change onsite. Although upstream and downstream producers are faced with different challenges, both can benefit from a variety of proactive management techniques that maximize efficiency and production. These techniques will help companies survive for now and thrive later, when market prices rise.

Predictive maintenance

It can be difficult to decide which combination of asset management techniques a site should use. Companies increasingly rely on technology to provide them with asset management data. While this is helpful, it is not good enough on its own. Gathering data is a start, but it is what the company does with that data that is important. Implementing reliable predictive maintenance (PdM) requires data analysis.

The concept of PdM is twofold: (1) Predicting when asset failure might occur, and (2) presenting an opportunity to fix the equipment before it does. For example, condition monitoring, such as vibration monitoring on a motor over a period of time, is only part of the equation. The other part is identifying and understanding the root cause of a data fluctuation. If the maintenance organization tracks equipment history consistently and completely understands what happened and why, then it will be able to better predict and avoid setbacks.

An effective PdM program will provide a proactive approach for work schedules. This action allows work to be thoroughly planned and the parts ordered ahead of time. While a reactive maintenance approach to unplanned equipment failure tends to bring havoc to labor availability and existing maintenance schedules, a proactive approach reduces equipment downtime and increases cost efficiency. If expertly executed, this process has the potential to extend asset run durations and eliminate unnecessary work, ultimately reducing the frequency of pit stops or turnarounds.

Risk-based inspection

As part of the PdM plan, risk-based inspection (RBI) should take place on critical equipment. This tactic helps provide clues to the life expectancy of an asset by identifying potential defects before damage occurs. The data gathered from RBI should point to potential safety issues and help identify the root cause of any past, present or future equipment failures. To implement an effective RBI program, the maintenance team must create a comprehensive criticality rating to determine the likelihood and consequences of a specific equipment failure.

An example of an RBI program can be seen in the case of refining sour crude stock and how the highly corrosive substance will affect pipes over a period of time. Inspections would be scheduled at frequent intervals to gauge the reduction of pipe thickness and prevent an accident from occurring. On the other hand, when sweet crude is being refined, inspections could be less frequent since corrosion is less likely to occur. The criticality rating process helps determine how closely new equipment or process changes should be monitored, and provides a maintenance direction for assets that may not have documented reliability records. Another advantage of RBI is that asset reliability can be determined while the asset is in use, with the help of non-destructive testing (NDT). Among other techniques, NDT uses visual exams, ultrasonic testing and digital radiography to evaluate equipment quality without reducing or halting production.

Implementing an RBI program on all plant assets is not feasible and would be a waste of money. Organizations must selectively focus RBI programs on assets or equipment with the highest criticality rating. Collecting data to provide a realistic assessment of an asset’s current state and remaining life is a labor-intensive process. The ultimate goal is to eliminate all unnecessary work, which is why the maintenance team must intelligently discriminate between equipment and how thorough an RBI program should be. These decisions can be made only after the team evaluates the data and is informed of the exact condition of the plant assets. However, inspections alone will not prevent a failure or help extend run times. Only taking action, as a result of an inspection, will make a difference.

Preventive maintenance

While PdM and RBI programs offer many benefits, preventive maintenance (PM) is another process that is necessary for proactive asset management. The basic premise of PM is that performing repetitive maintenance on assets, at a set frequency, will prolong their life and ensure they remain in optimal condition. While it may seem at first glance to be unnecessary work, this approach reduces the likelihood of potential safety incidents and unplanned breakdowns, minimizing maintenance costs in the long run.

PM programs are important in many industries. For example, within the realm of car maintenance, automobile manufacturers may suggest that a car’s oil should be changed every 5,000 mi, and the cabin air filter should be replaced every 15,000 mi. However, these suggestions may not be enough to ensure optimal performance and safety. Much depends on how and where the vehicle is used. The same goes for fixed assets in the oil and gas industry. Equipment used in Canada’s oil sands will undoubtedly face different conditions than that used in a plant on the US Gulf Coast.

It is important to note that many manufacturers may warranty only assets that have been maintained to their set standards. The author does not suggest changing PM frequency without explicit approval from the manufacturer. It is in a site’s best interest to determine the optimum maintenance plan for its operation, and not only at manufacturer-prescribed intervals. Validating these maintenance suggestions in the field to determine if they are correct enhances a proactive management strategy.

Consider the real-world example of a major US refinery with two PM programs, both of which were regularly tracked. The first program recorded regulatory PMs, as required by governing agencies, such as the Occupational Safety and Health Administration (OSHA). The goal was to be 100% regulatory compliant, which the site achieved every month. The second program tracked reliability PMs, and hoped to improve overall asset reliability and uptime. Although several of the reliability PM goals were met, some were not, which turned out to not be a problem. This revealed that not all of the site’s reliability PM goals were necessary. As with many refineries in North America, processes and equipment may have changed or been upgraded over time, but the onsite PM programs were not reevaluated, wasting valuable time and energy.

Rethinking programs

The Society for Maintenance and Reliability Professionals claim that manufacturing and maintenance organizational structures are split:

  • 55% reactive
  • 31% preventive
  • 12% predictive
  • 2% other.

In this case, if a site had a maintenance budget of $50 MM/yr, over half of the money would be spent on repairing broken equipment. Figuring in the cost of lost production, the reactive maintenance costs jump even more. Ideally, the structure should be: 10% reactive, 25%–35% preventive, 45%–55% predictive and the remaining proactive. If organizations take a more enthusiastic stance on equipment upkeep, they will increase asset availability, and maintenance costs will drop dramatically—up to 30%–40%, by some estimates. At a 5%/yr reduction for 10 yr, maintenance costs would eventually drop by 37% (FIG. 2). Using a combination of the methods discussed in this article, a site’s maintenance team can better understand equipment reliability and become more proactive.

FIG. 2. At a 5%/yr reduction for 10 yr, maintenance costs would eventually drop by 37%, $ MM.
FIG. 2. At a 5%/yr reduction for 10 yr, maintenance costs would eventually drop by 37%, $ MM.

Proactive asset management with a turnaround

Turnarounds (TA) give a site the opportunity to perform maintenance work that cannot be done while the unit is online. The timing and execution of these planned asset outages play important roles in proactive asset management. The TA’s scope is primarily predicted by PM recommendations, but data from PdM and RBI should also support the scheduled work and timeframe. Historic run times and asset performance data, such as run rates, should also be taken into consideration. Ideal scope determination is particularly crucial for a TA, considering these take place only every 3–5 yr (or less, if site reliability increases), and may be the only opportunity for some tasks to be completed.

For a proactive management plan to be successful, the work must be executed safely, on time and within budget. Preparation for such an event usually begins 2 yr or more before mechanical execution. This front-end loading (FEL) phase can be daunting, unless a site establishes its deadlines and spells out the processes in a documented turnaround manual. This manual typically consists of general guidelines, including the development of the TA strategy, scope development and management rules, roles and responsibilities of team members and TA governance. Along with TA governance, detailed milestone information—including who is accountable and by what date these milestones need to be completed—helps ensure that all key players are on board and aligned with the overall strategy.

The value of staff

To guarantee that the TA event will successfully support proactive techniques, management must involve experienced operators, maintenance personnel and engineers, and establish clear staff communication and accountability. Refineries typically have two sets of operators working during a shift, one inside and one outside. Inside operators monitor multiple screens that show inputs, outputs, flows, mixes, rates and, frequently, live feeds of areas that the outside operator might not be able to reach. Outside operators make rounds of the plant and inspect the equipment itself, looking for potential safety issues or threats to throughput, as well as perform daily or weekly PM tasks. Considering their familiarity with assets, maintenance employees are able to recognize malfunctions more easily and faster.

Onsite engineers are familiar with new equipment, past upgrades, and have special technical equipment knowledge and insight. Hands-on experience and integral knowledge make them important to achieving proactive maintenance objectives. Their observations provide initial, or additional, details into equipment problems. Though this may be considered reactive asset management, the details that onsite engineers provide can offer foresight, as well. Every day is vital for planning a TA because the onsite engineers are more familiar with the plant’s assets, and they understand what it should look and sound like when it is running efficiently.

Proactive maintenance tools

To tie all of these proactive maintenance processes together, companies should utilize a computerized maintenance management system (CMMS). A CMMS can manage work orders and track all maintenance activities and associated costs on either whole assets or their parts. If PMs are loaded into the CMMS, inspection (or regular) work orders will automatically generate as the due date approaches. Work orders generated by operations personnel, or the TA team, can also reside in the CMMS, which has the advantage of creating one comprehensive backlog. This management system can also easily track parts and materials to enhance the transparency of any critical equipment spares. Some CMMSs have the ability to directly link to monitoring equipment, so that when an out-of-spec reading is received, a work order can be generated immediately and automatically.

Prepare now and thrive later

As financial margins in the oil and gas markets continue to be tight and shareholders pressure companies to be more financially responsible, proactive asset management is becoming more critical. Shareholders pressure companies now more than ever to be fiscally responsible. Although other sources of energy will increase in importance in the future, reliance on oil and fossil fuels will continue. According to OPEC, global oil demand will continue to increase to 2040 (FIG. 3).

FIG. 3. Global oil demand, 2020–2040. Source: OPEC.
FIG. 3. Global oil demand, 2020–2040. Source: OPEC.

Now is the perfect time for sites to change their reactive maintenance culture into a proactive one. There is no perfect strategy to eliminate all equipment failures, but managing fixed assets with a strategic plan will pay off. If critical equipment failures can be prevented or predicted, it will help increase safety, reduce maintenance costs, increase asset uptime and, ultimately, result in higher profits. HP

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