A Framework For Implementation Of Condition Based Maintenance In Oil & Gas Plants

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ABSTRACT

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

An oil production plant is a facility which processes production fluids from oil wells in order to separate out key components and prepare them for export. This is distinct from an oil depot, which does not have processing facilities.

Typical oil well production fluids are a mixture of oil, gas and produced water. Many permanent offshore installations have full oil production facilities (Ken Arnold and Maurice Stewart, 1998). Smaller platforms and subsea wells export production fluids to the nearest production facility, which may be on a nearby offshore processing installation or an onshore terminal. The produced oil may sometimes be stabilised (a form of distillation) which reduces vapour pressure and sweetens “sour” crude oil by removing hydrogen sulphide, thereby making the crude oil suitable for storage and transport.

Emerging challenges in the oil and gas industry are proving to be a catalyst for change in the management offacilities, new and old, worldwide. The growth in demand for crude oil and natural gas is unlikely to show any significant signs of slowing over the next decade or more, but the reality is that companies are faced with greaterextraction costs due to: (1) the increasing scarcity of conventional crude oil and natural gas reserves, and (2) the difficulties associated with the extraction and/or processing of unconventional reserves found in oil sands, coal seam gas (CSG), shale gas (Yeo, B., 2010), underground coal gas (UCG) (Businoska, A., 2010), and reserves located in the depths of the oceans.

Similarly, as sources mature, flow slows and costs increase as advanced technologies are required to enhancerecovery. Another challenge, common to all industries, is the optimisation of equipment availability versus costs.

Furthermore, due to the highly critical nature of the oil and gas activities, the industry cannot afford unexpected failures.

Many companies are investigating the broader implementation of automation to reduce the number of employees required and the risks they are subjected to in a bid to improve efficiency and decrease human error and risks. There is also an increase in un-manned facilities, particularly in remote locations. These two trends will inevitablyincrease operating costs. From an investment perspective, the uncertainty in supply means that investors will be looking to low cost of production and maintenance operations to ensure the safety of their investment (Treadgold, T., 2010). Due tothese trends and challenges, oil and gas companies are looking to optimise production (Elgsæter, S. M., O. Slupphaug, et al., 2010) and improve assetintegrity management (Rahim, Y., I. Refsdal, et al., 2010). An effective maintenance program is an essential and significant component of operations with many benefits, including; the reduction of downtime due to unexpected equipment failure, which improves reliability and maintainability, increasing equipment availability and utilisation. Optimising maintenancealso improves the useful life of equipment.

Proactive or preventative maintenance (PM) strategies are an essential component of an effective maintenance program. The PM strategy known as condition-based maintenance (CBM) provides a dynamic understanding of equipment condition while in operation and is used to predict failure in mechanical systems through fault diagnosisfrom condition monitoring signals using diagnostics and prognostics (Heng, A., S. Zhang, et al., 2009). CBM strategies are currently a major focus of maintenance and maintenance management research due to the aforementioned trends and challenges, increased complexity in industrial technologies (Swanson, L., 1997), and advances in condition monitoring techniques that includethe use of online systems (Oberholster, A. J. and P. S. Heyns, 2009). Current literature on CBM applications in the oil and gas industry illustrates the effectiveness of this strategy as a way to improve maintenance management, prevent accidents, and optimize production (Natarajan, S. and R. Srinivasan, 2009).

Increased productivity is a key issue for manufacturing companies to staycompetitive on a global market. Success, and even survival, in manufacturing requires continuous development and improvement in the way products are being produced (Jackson and Petersson, 1999). Just-in-time, supply chain management, lean manufacturing, capacity assurance, flexible and agile manufacturing, to name a few, are strategies in which it is essential that production capacity is available in order to meet customer demand (Desirey, 2000; Gits, 1994; Lyxhøj et al., 1997;

Riis et al., 1997). Maintenance as a form of production support has thus become increasingly important to ensure equipment availability, quality products, on-time deliveries, and plant safety (Bevilacqua and Braglia, 2000; Lyxhøj et al., 1997; Riis et al., 1997). Even so, maintenance is still considered a cost center in many companies (Alsyouf, 2004).

However, as Jonsson (1999) states, improper maintenance and unavailable equipment often limit the effectiveness of manufacturing. Wireman (1990) states that as much as one-third of the total maintenance cost is spent unnecessarily because of circumstances such as bad planning, overtime costs, poor usage of workorder systems, and limited or misuse of preventive maintenance. There is also nodoubt that maintenance is a costly support function. McKone and Weiss (1998)state that a company can spend as much as its net income on maintenance.

Maggard and Rhyne (1992) state that maintenance expenses on a yearly basis usually range between 15 and 40% of the total production cost. Coetzee (2004) states it can be as much as 15 to 50%, and Bevilacqua and Braglia (2000) declarethat maintenance cost can represent as much as 15 to 70% of the total productioncost. A consensus of the above-mentioned percentages is, thus, that maintenancecosts represent 15% or higher of the total production cost. Given Wireman’s(1990) statement – that one-third of the maintenance is waste – it becomes clearthat about 5% or more of the total production cost is spent unnecessarily due tobad maintenance. Several studies have also visualized that industry is far fromutilizing production equipment to its full potential (Ahlmann, 2002; Ljungberg,1998; Nord and Johansson, 1997). A study performed in ten Swedishmanufacturing companies revealed that operative utilization of production equipment, on average, was as low as 59%. Of the unavailable time, 39% was spenton maintenance (Ericsson, 1997). Thus, there is truly untapped potential inindustry today, parts of which can be realized through maintenance managementdevelopment.

On a theoretical note, good maintenance has been defined as when very few corrective maintenance actions are undertaken and when as little preventive maintenance as possible is performed (Cooke& Paulsen, 1997). This demands great skills in planning proper preventive maintenance intervals and tasks. When asfew corrective maintenance actions as possible should take place, it can be seen asgood to perform as much preventive maintenance as possible. Continuousmaintenance would, of course, lead to decreased availability and high directmaintenance costs in terms of, for example, labor and spare parts. The preventivemaintenance should, for the most effective execution, be planned for when anitem’s pre-set normal condition is exceeded. In some cases, a machine can actuallybe run until just before failure (Al-Najjar, 1997). Al-Najjar (1997) continues bystating “The needs for increased plant productivity and safety, and reducedmaintenance costs, have led to an increasing interest in methods for conditionmonitoring, (CM), of mechanical systems.” (p.8).

The need for condition based maintenance was revealed as early as in the 1960’s through a study performed during the development of the preventive maintenance program for the Boeing 747. The study’s purpose was to determine the failure characteristics of aircraft components (Overman, 2002). The study was, at the request of the Department of Defense (USA), documented and published by Nowlan and Heap in 1978. It was found that a relatively small part of allcomponents (11%) had clear ageing characteristics, which enables a scheduleoverhaul (that is predetermined maintenance). The rest of the components (89%)did not show such ageing characteristics (that is, they were more or less randomfailures) and consequently not applicable to schedule overhauls (Nowlan & Heap,1978). Page (2002) presents similar conditional-probability curves within the manufacturing industry. He states that only 30% of all components have clearageing characteristics, and that this percentage decreases as complexity andtechnology increases. Evidently, the ageing feature of a component is not the best approach, and in some applications not even possible, when planning appropriate maintenance schedules. This fact introduces condition based maintenance and condition monitoring as one solution to the issue.

1.2 Statement of Problem

Independent investigations reveal that condition based maintenance is not utilizedto a large extent. An investigation performed by Jonsson (1997), surveying 284relevant respondent answers in the manufacturing industry of Sweden, reveals that only two-fifths of maintenance time is spent on preventive or condition based maintenance. In maintenance techniques, the use of objective condition monitoring is valued low in comparison to human senses, corrective maintenance,and other preventive techniques. Statistical testing visualized that large companiesto a greater extent utilized condition monitoring than small- and medium-sizedcompanies did. Alsyouf (2004) presents another investigation within Swedishindustry placing condition based maintenance in second place, tied with correctivemaintenance, as the most frequently used maintenance approach. Predeterminedmaintenance was reported to be the most frequently used. However, the conditionmonitoring tools reported as having been used in the same investigation were ofquite low-tech art. A third investigation performed by Bengtsson (2004a) reportsthat condition based maintenance, as a maintenance approach, is only utilized in10% of all maintenance activities. The investigation came to the same conclusionsas Alsyouf’s concerning the use of condition monitoring tools (in other words, theywere generally of quite low-tech art). An industrial problem is thus that conditionbased maintenance, and in particular the technical advantages, are not utilized totheir full potential.

Condition monitoring tools have been used and developed for many decades.

However, according to the investigations above, the majority of Swedish industry has not started to utilize the technical advantage of these tools. When surveying published research within condition based maintenance and condition monitoring, most papers and books deal with the technical aspects, and less with organizational aspects. Pengxiang et al. (2005) state that most research within condition based maintenance and condition monitoring in the power industry is more or less devoted to the technical aspects. It does not bestow much attention on how thepower utilities should carry out condition based maintenance and what strategiesthey should apply. Moya (2003) goes as far as stating that there is no internationalstandard on managing a predictive maintenance program. McKone and Weiss(2002) state: “Although predictive maintenance technology has tremendouspotential, most managerial practices have evolved by trial and error.” (p.111).

Moubray (1997) declares that a challenge nowadays for maintenance departments is not only to know what new techniques can do, but also to choose the correct one for their organization. Walker (2005) states that many implementation efforts fail,three (of many) reasons being inappropriate selection of condition monitoring, technology inappropriately applied, and no condition monitoring implementationstrategy. Kotter (1996) argues that there are always barriers working against changein an organization, and that these, with the help of a method, can be overcome.Within other maintenance approaches and philosophies, such as total productivemaintenance, more research has been performed on the topics of organizational aspects and implementation methods (see Chand & Shirvani, 2000; Cigolini &Turco, 1997; Cooke, 2000; Eti et al., 2004; Lycke, 2000; Nakajima, 1988; Sun et al., 2003; Tsang & Chan, 2000; Wireman, 1991).

1.3 Purpose of the Study

The problem discussion indicates that there is a need for additional research within the area of implementing condition based maintenance. This, partly in order to raise the awareness of its incentives as well as giving companies a head-start in theimplementation phase. There is a need to collect data from successful implementations of the approach, as well as experiences and views from experts, in order to develop implementation procedures for companies to use so that they do not suffer the effects of trial-and-error approaches.

Maxwell (1996) distinguishes between three different purposes of performing astudy: personal, practical, and research purposes. Personal purposes are the ones that motivate a researcher to perform a study, it or perhaps they can come fromdifferent aspects such as political passions, curiosity, desire, or as simple as toadvance in career. The practical purpose is focused on accomplishing something(in other words, to meet a need, to change a situation, or to achieve an operationalgoal). Finally, the research purpose is focused on understanding something, to gaininsights into what is going on, and why. Indeed, this research has, as Maxwell(1996) suggests, three purposes. The personal purpose is two-fold: to qualify for adoctoral degree through the acquisition of deeper knowledge within the academicsubject Innovation & Design (and in particular maintenance technology) and toacquire practical research experience in change management in industry (and inparticular the implementation of condition based maintenance). The practicalpurpose of this research has an industrial focus: to facilitate the implementation ofcondition based maintenance in companies, where applicable. Finally, the researchpurpose can be formulated as:

The research purpose of this research project is to investigate how a condition based maintenanceapproach can be implemented in an industrial setting of an oil and gas plant, and to develop a method that can assist companies in their implementation efforts.

1.4 Research questions

Three research questions have been formulated based on the problem discussion and the research purpose. The focus of the questions is on the implementation ofcondition based maintenance, although they take on a wide scope of the implementation process. The first question sets out to investigate the phenomena of condition based maintenance. This is performed in order to highlightconstituents that influence a condition based maintenance approach. The secondquestion sets out to investigate the decision-making process necessary to reflectupon before implementation can commence. The third and final question sets outto investigate the implementation process itself; how a condition basedmaintenance approach can be implemented in a company. The research questionsare formulated as follows:

RQ1. Which are the constituents of a condition based maintenance approach?

Prior to an implementation of condition based maintenance, it is essential to understand and have knowledge in what a condition based maintenance approach is all about. As mentioned above, the technology in condition based maintenance isin strong focus. It is possible that other or additional constituents, besidestechnological, are important to focus on in order to achieve a successful implementation result. This research question sets out to investigate and highlight the constituents of a condition based maintenance approach.

RQ2. Which essential decisions should be made, before implementing a condition based maintenance approach?

It is essential to analyze the current situation a company is operating in today in order to implement a new system. How is the current maintenance strategyformulated, if it even exists? What are the current maintenance costs, and how welldoes the outcome of it reflect the goals? Questions like these and probably manymore need to be answered in order to conclude whether a condition basedmaintenance approach can be an integral part of achieving the maintenance goalsof a company. If it is concluded that condition based maintenance can be anapplicable solution for a company, additional decisions lie ahead. Condition basedmaintenance is not to be used as an overall policy. Therefore, decisions on assets tobe a part of the monitoring program need to be considered carefully. Also,condition based maintenance and condition monitoring comes in a variety ofdifferent techniques and technologies, to decide what to monitor and how on atrial-and-error or an ad-hoc basis can be a risky approach. This research question sets out to investigate the decision-making process necessary to reflect upon beforeimplementation of condition based maintenance can start.

RQ3. How can a condition based maintenance approach be implemented, and which enablingfactors are essential to focus on in the process?

There are many barriers for change. Kotter (1996) names a few. They are inwardly focused cultures, paralyzing bureaucracy, parochial politics, a low level of trust, a lack of teamwork, arrogant attitudes, a lack of leadership in middle management, and the general human fear of the unknown. These are just a few factors that may need to be overcome in order to be successful in the implementation of a condition based maintenance approach. This research question sets out toinvestigate how companies successfully have implemented, or successfully canimplement, a condition based maintenance approach, and to visualize enablingfactors essential to focus upon in an implementation effort.

1.5 Expected industrial results

The expected industrial results of the research are two-fold: first, a practical method companies will be able to use in implementing a condition basedmaintenance approach, and second, an investigation of how industrial companieshave succeeded with an implementation process. In this research, a ‘method’ istreated as “a systematic procedure in order to achieve a specific result.” Further, itwill consist of different tools, guidelines, and models with a suggested sequentialarrangement of use. The method, with its accompanying parts, is to be developedusing data from several industrial cases and literature.

1.6 Delimitations

Even though condition based maintenance could be used for virtually any process or product, it will, in this research, be treated in relation to physical assets, such asmotors, machines, pumps, and the like (in other words, assets that can be found within the ordinary manufacturing industry and in larger systems). Software, buildings, and services are excluded.

The case studies performed within the research have focused oil and gas plants. The type of andsizes of companies, as well as the type of industry included in the case studies, have been spread over a wide range. This was done in order to collect data from severaldifferent settings, thereby increasing the generalizability of the results.

Condition based maintenance systems, and within diagnosis, prognosis, and decision support processes, in particular, analysis techniques and methods (such asmathematical modeling and different artificial intelligence techniques, to name two) might possibly be needed. This research acknowledges as much. However, the research does not have the objective of performing research within these specified issues; the research purposes has been formulated to approach the problem statement in a more comprehensive manner.

In implementing a new system and/or a new way of working it often takes a long time before the change is absorbed in the company. Changing an organization and the culture therein can sometimes take several years. As an example, Nakajima (1988) states that it takes approximately three years to implement total productive maintenance. One of the most important aspects in an implementation is to validate that the change has actually occurred and that the organizational culturehas changed. This research acknowledges this but has focused more on the partsthat comes before the validation phase.

1.6 Definition of Terms

Maintenance: The technical meaning of maintenance involves functional checks, servicing, repairing or replacing of necessary devices, equipment, machinery, building infrastructure, and supporting utilities in industrial, business, governmental, and residential installations.

Condition Based Maintenance:  is a maintenance strategy that monitors the actual condition of an asset to decide what maintenance needs to be done. CBM dictates that maintenance should only be performed when certain indicators show signs of decreasing performance or upcoming failure.

Oil Production Plant: An oil production plant is a facility which processes production fluids from oil wells in order to separate out key components and prepare them for export. This is distinct from an oil depot, which does not have processing facilities. Typical oil well production fluids are a mixture of oil, gas and produced water.

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