Efficient project turnarounds: the next challenge for Australian LNG

Massive LNG projects such as the Gorgon LNG Project will have to undergo turnaround one year after start-up, a significant risk to owner/operators.

Massive LNG projects such as the Gorgon LNG Project will have to undergo turnaround one year after start-up, a significant risk to owner/operators.

Turnarounds are a necessary but costly undertaking for any gas or LNG plant. Apart from lost production while the plant is offline, there is the direct cost of labour, tools and equipment used to execute the project. What can your company do to minimise risk?

According to Accenture, Australian owner/operators need to adopt an end-to-end solution for improving safety and operational benefits during turnarounds. Accenture argues that the adoption of this technology is crucial for the Australian industry as its new LNG projects approach the critical turnaround planning phase.

Gas Today spoke to Managing Director of Energy Bernadette Cullinane and Managing Director of Asset Operations Services Scott Tvaroh about what Australian operators can learn from international turnaround experiences, and how they can improve safety for their turnaround contractors.

What are the impacts of a poorly managed gas plant turnaround for its owner/operator?

Scott Tvaroh (ST): In general, what we have been seeing globally in the turnaround space is significant budget overruns – sometimes up to 15 to 30 per cent over the owner’s plan.

What owners are doing now is planning some extra cushion into their plan to try and relieve that. But nonetheless, overruns from unforeseen events occur regularly.

Critically, because you are bringing in a workforce that is not normally on site, there is a significant amount of controlled chaos. Therefore you see timeline tools with the contractors significantly under 50 per cent. Given this confusion it also leads to discrepancy in contractor billing, which is what a lot of owners have been focusing on in recent years.

It is still the case that anywhere between 5 and 15 per cent of the billings they get from vendors are not according to the contract that was written for the work.

Bernadette Cullinane (BC): In the context of the Australian LNG industry, we know that Australia is finishing up a large-scale construction phase. There has been AU$250 billion of capital invested in the last seven years in Australian gas industry, and double the number of LNG trains heading into production over the next couple of years, with the result that by 2018, Australia will be the largest exporter and producer of LNG.

As it relates to budget overruns, this growth is a critical issue for turnaround planning. As you multiply the number of trains, you put stress on an already limited workforce, which is overstretched to provide the skills that are required in key areas such as instrumentation. As you take that across now 21 trains of LNG, it creates the potential for a situation where bad performance becomes significantly worse.

With new LNG plants coming online in Australia, are Turnarounds going to be more common for Australian industry?

BC: Yes, that’s exactly right. And in a situation which is already complicated by having hundreds of people on site doing things in an environment that they don’t typically work in day-to-day, the difficulties will be exacerbated by the number of new plants coming online and the need for services that simply have not been delivered in Australia. There is a clear comparison in that respect to the Canadian oilsands, where there is a more mature industry and there is more familiarity with the services required.

So it is important that Australian oil and gas companies plan now for their first turnaround, which would be happening roughly one year after they start up. They need to plan not only to be efficient within the turnaround, but actually plan the turnaround in such a way that they can maximise access to skilled resources, minimise the number of green hats in the facility at any given time, and keep an eye on both the cost and production situations.

When you are taking your plant offline obviously you are not producing, so you have to consider not only the cost of the turnaround, but also the potential impact that any scheduled delay would have on your ability to meet your contractual requirements. And then the third dimension, safety, is one of the key things the Australian industry really has to get right.

There will be challenges ahead in managing turnarounds within a highly complex 21 LNG train environment.

What technologies are available to owner/operators to improve turnaround efficiency?

ST: The solution that Accenture has pulled together is relatively new in that it
is similar to a WiFi system that you would have in your house. Out on site, it allows for a standard commercial WiFi to be used for both devices and for active radio frequency identification (RFID) tags.

For the RFID tags, it will give the position of the person, with a relatively wide specificity of plus or minus 15 to 20 m, to help geo-locate them in a facility.

We then take that data and combine it with other legacy data elements from the owner: the access control system the workers come in on; the back office system, which pulls the contractor or the vendor data, and timesheet records, which the vendors themselves are typing in. We are able to pull that all together in near real time and provide it back to the execution leads for the event, both on the vendor side and the owner side.

So now both the vendor and the owner are making real-time decisions, where currently without that tool set they are working with data that is anywhere from three days to two weeks old. The turnaround events only last from between four and eight weeks, so it is really important to get this data quickly.

How many contractors are generally involved in an oil and gas plant turnaround operation?

BC: At times there could be upwards of 800 people working on a particular site; however, this does depend on the scope of the turnaround – how many units are taken out of action at any given time, and the type of work that is executed.

Regardless, it is a lot of people who are unfamiliar with the facility, and could potentially be in harm’s way, so it is really important to be able to effectively plan and manage their day-to-day activities.

How can industry offer adequate training and skill sets to temporary turnaround contractors?

BC: The digital capabilities that are available today to build the operators, service companies and others, really makes the ability to accelerate training much more practical and pragmatic.

And we do know that having studied the workforce in Australia, and not specifically the turnaround workforce, that Australia has a workforce with fewer years of experience, and fewer numbers of people in skilled areas.

So having things like digital rendering of 3D models of plants, that allow workers, before going into plants, to become more familiar with the equipment and with the location of the equipment through a simulation approach, is really important.

Some of the other things that owner/operators are doing collaboratively with contractors and service companies is that they are bringing contractors in early so that they can become familiar, again, with the day-to-day working of the operation, to understand the difficult nature of the turnaround.

It is really about two-way training, in the sense that contractors are embedded with the operators well in advance, sometimes a year in advance of the turnaround, and they can become familiar with the actual hands-on operation as well.

Therefore, I think it is very important that in Australia – given the scarcity of the available resources, and the sheer impact of the wall of LNG that is coming into production by 2018 – that with all techniques, digital and practical, there is strong collaboration between operators and contractors ready to take on that challenge.

There is a lot of discussion on how technology can improve worker safety. what apps are available to workers, and is there any proof that these apps actually work?

ST: I can narrow it down to three different types of technology.

Firstly, there are two different types of RFID devices that Accenture are using. One has a button in the middle that is an emergency alarm-type button, which pushes directly back to the control room and gives you a position for that person. The other, which is particularly relevant to the oil and gas community, is a gas detector.

This is a four-head gas detector that has man-down tracking and emergency alarm, and it tracks numerous types of leaks. So, if anybody is hit with exposure to gas, it goes straight to the switchboard. They can both capture that detail as well as alert the local emergency support.

The second type of device is to do with an application that tracks the amount of time people spend at site, and/or consecutive number of days of work, so as to minimise fatigue.

The third device, which is not as intuitive, is tracking and making sure people are doing the work that was planned, to keep them in a safe position. We plan the work in specific way, and to validate that people are working that way actually makes them safer.

For instance, if the owner puts the contractor at a distance of travel further from the site than they need to be, they will have operating hours travelling to and from that are unnecessary, and could potentially put them in harm’s way. Or if there is a delay getting the materials or getting the equipment to site, you now have people who are standing around waiting, and in my perspective in harm’s way, because that is not what they are there to do.

Any final suggestions for Australia’s industry?

BC: Having recently spent time with clients in the west coast of Australia, I would say that the Australian LNG industry and the operators are keenly interested in being able to leverage this digital turnaround capability.

It is not something that they have seen before, because it is not something that most have done before, yet there is an appetite for it. This is mainly because they can instantaneously see the benefits of collecting this type of information, the benefits to the turnaround that could be in action at any given time, but also the insight that it gives them, the ability to plan better.

Planning, as discussed, is essential to be able to prepare for the future challenges around insuring smooth and efficient operations in this very tough commodity-price environment, as well as ensuring the safety of workers. So there is a significant interest in leveraging these types of technologies to improve productivity output, and the competitiveness of the LNG industry.

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