Fixed Equipment Reliability Standards, Practices & Industry Activities

Gregory Alvarado Vice-President and Sr. Consultant

Presenter Greg Alvarado

VP and Sr. Consultant The Equity Engineering Group, Inc. 30 Years Global Experience Fixed Equipment Reliability 23 Year Voting Member API ISC 510, 570, etc. Original Member of RP 580, both editions Original Member RP 581, both editions NACE Refining and Chemical Committees Member 12 years First Chair NACE sub-committee on AE API RP 580/581 Instructor for 12 years Founder and Chief Editor of the Inspectioneering Journal Invited Participant in 2003 Rand Study on Critical Infrastructure for US Refining Industry

Main Points
Industry Goals - Reliability Losses continue to happen Are we learning from the past? Various programs should provide layers of protection
Focused information from various sources Industry standards Industry certifications Management Systems Management Leadership Practices Managing uncertainty, the role of inspection Metrics and Gap Analyses

Introduction
Losses in the refinery industry have continued to increase over the last few years and the causes highlight the aging facilities in this category. A significant number of larger losses (over $10,000,000) have been caused by piping failures or piping leaks, leading to fires and/or explosions. Several large losses due to piping failures were due to corrosion issues or using the wrong metallurgy..

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

$433,000,000 (2002

From the Marsh and McLennan Report, The 100 Largest Losses 1972-2001, 20th Edition: February 2003, a publication of Marshs Risk Consulting Practice
5

The Goal

Achieve regulatory and corporate compliance (business, safety, environmental), and ensure reliable use of fixed equipment for finite run times, by understanding, identifying, measuring, and managing risks and eliminating non-value adding activities and costs.

Improvement is Needed
The significant problems we have cannot be solved at the same level of thinking with which we created them.

~Albert Einstein
Plants are aging
Failure rates will increase without effective change See latest Marsh Consulting Report 2010

Marsh Report Observations

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

Five year loss totals in the refinery industry have continued to trend upwards over the last few years. Piping failures or leaks (corrosion or incorrect metallurgy) and start-up and shut-down events continue to be significant causes.

API 754 NEW PSM Metrics

Released April 2010

What Are IM Protective Barriers?

Swiss Cheese Model

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

IM PBs in Facility PSM Program

Examples of Tier 4 Items

Process Safety Action Item Closure - Percentage and/or number of past-due 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.

Examples of Best Practices Implementation & 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 Predictable outcomes Effective spending Better intentional directives

Specify Design Conditions and Identify Damage Mechanisms (API 571, WRC 488, WRC 489, WRC 490), Select Materials of Construction

Construction Code ASME VIII-1, VIII-2, I, B31.3, B31.1

In-Service Inspection (Establish Inspection Interval) Prescriptive (API 510/570/653,NBIC) Risk-Based (API 580/581,PCC3) Continue Service Anticipated Damage

Inspection Results Unanticipated Damage

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

Fitness-For-Service API 579/ASME FFS-1

Run/Rerate

Repair

Replace

Technology Integration

Commissioning (Baseline Inspection)

Life Cycle Management of Fixed Equipment

ASME PCC2

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 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 Inspection, 2nd Edition, November 2009

API RP 576 Inspection of Pressure Relieving Devices, 3rd Edition November 2009
API RP 574 Inspection Practices for Piping Components, 3rd Edition, November 2009 API RP 572 Inspection Practices for Pressure Vessels API 570 Piping Inspection 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 Refractory QUTE

Inspector Certifications
Advanced Supplemental
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 Corrosion Rate and Remaining Life 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 System Inspection Fraudulent and Counterfeit Materials Furnace Monitoring and Inspection Handling of Pressure Relief Devices Heat Tracing in Safety Systems Hot Spots Hot Tapping and Welding on Equipmentin-Service 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 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 Vents on Storage Tanks 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 Risk Based Turnaround and Inspection Planning Root Cause Analysis, Failure Investigations, and Solution Development Tank Bottom Inspection Temporary Repairs and Temporary Installations Thickness Measurement Accuracy and 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

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

Managing Uncertainty Intentionally

Additional Benefits
Inspection Planning & CBA
$1,400,000
Current Inspection Costs Current Maintenance Costs Total Current Costs RBI Inspection Costs RBI Maintenance Costs RBI Total Total Savings

$1,200,000

$1,000,000

$800,000

$600,000

$400,000

$200,000

$0 Unit A -$200,000 Unit B Unit C Unit D Unit E

-$400,000

LERU RBI Cost Benefit

Inspection Planning & CBA
CBI (% Reduced) 11 2 21 22 30 30 Unit 431 866 867 231 531 8733 Type DIB/Deprop Heavy HDS SRU Gulfiner Amine SWS RBI (% Reduced) 85 50 93 50 68 83 Risk Mitigation (% Improvement) 74 48 72 28 38 53

137
210B 210C 865 860 862 864 210A 868 869

Crude
Crude Vac Kero HDS Reformer LERU Unifiner Crude FCC Sulfuric Alky

4
53 40 9 35 17 10 32 4 16

6
91 68 49 91 85 63 74 66 60

2
38 28 40 56 68 53 42 62 44

Inspection Planning
RBI vs. Traditional Inspection Plan
4000 3500 3000

Risk (Sq. Ft/yr)

2500 2000 1500 1000 500 0 Old New

DA 02

1T T 29 s ss 20 A2 A213 14 4s 02 5F 2F ss s A2 r 23 ss D 0 10 D2 3 A Es 2A 2F 32 02 EA 2F ihd B 0 21 ss 0 05 20 1E A2 02 0 10 E FA A/E 0A A1 EA E 2 A2 02 02 12 24 0 D 1 01 EA 02 EA 02 01

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% 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
Data Management Engineering & Maintenance Equipment Planning Inspection Programs

Metallurgy
Plant Processes Receiving Inspections Welding and Repairs

Inspection Management
Inspection Planning

Benchmarking
Working Practices Procedures Understanding Utilization of best practices Synergies & interdependent practices, processes & programs Metrics Kudos Good practices recognized Areas of vulnerability Recommendations for improvement Benchmarking metrics

Practices & Implementation

Scoring is based on a rating from 1 to 5 where:
1 = No awareness, nor implementation 2 = Awareness, but not implemented or significantly 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 of the subject area statements are also weighted for 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

The file review is performed after the initial interviews to verify the information obtained through the interview process.

E2Gs specialists have reviewed fixed equipment groups and 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 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 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 a committee member.
Learn more by visiting sites like: http://www.api.org/ http://www.asme.org http://www.nace.org http://www.hse.gov.uk/ http://www.inspectioneering.com http://forengineers.org http://www.absa.ca/ http://www.highpressure.jp/english/

Greg Alvarado 281-537-8848 www.equityeng.com