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6ª Conferência sobre
Tecnologia de Equipamentos

Economics of Risk Based Inspection Systems
in Offshore Oil and Gas Production

John L. Tischuk
Tischuk International/ABS Group

Conferência sobre Tecnologia de Equipamentos – COTEQ
Salvador – Bahia
19 a 21 de agosto de 2002

Inspection and Maintenance. This is designed to assess risk in a simple and cost effective way and is a fundamental part of the development.INTRODUCTION Risk Based Inspection strategies are required by operators in the Oil and Gas and Petrochemical Industries to provide the process for operators to function in compliance with the regulatory authorities. 3) An Operational Criticality Assessment of all piping and vessels to determine consequences of failure. 1 . Risk Based Inspection provides the ability to target inspection resources at the areas of plant where inspection will provide the most benefit in reducing risk.IEV . These strategies provide techniques to re-determine both the frequency of intervention and the applied inspection techniques. probability of failure and failure mode for each item. systematic and auditable approach to a variety of functions within their operations including. and detail the procedure for Written Schemes of Examination. affords the opportunity for operators to implement new methods for Inspection and Maintenance and accommodates the increasingly stringent demands placed on industry reducing COTEQ 067 . OCA uses a 3 x 3 risk matrix to represent the different levels of risk. The application of Risk Based Inspection Strategies. 5) Development of a review and feedback system so that inspection results may be used to alter the subsequent inspection interval. 2) A Plant Integrity review of the pressure systems including assignment of grades and conditions to all of the piping and pressure vessels. through the use of Operational Criticality Assessment. Risk is defined as the combination of the probability of failure and the consequences of failure. and they move away from date based slavish methods of inspection which were previously used.Sair 6ª Conferência sobre Tecnologia de Equipamentos 2 SYNOPSIS Risk Based Inspection (RBI) is a method for using risk as a basis for managing an inspection programme. 4) Development of new inspection schedules and intervals and.. implementation and management of risk based strategies. They clearly define the competence and the function of those bodies responsible for inspection and test. The application of Risk Based Inspection has an economic impact on Oil and Gas production. The regulations put the onus onto the operators to adopt a planned. to implement Risk Based Strategies into their Inspection and Maintenance philosophies. This has involved: 1) Preparation of written schemes of examination. Tischuk Enterprises (UK) Ltd has developed an integrated software system based on the Tischuk Operational Criticality Assessment (OCA) system of analysis. The impact is generally positive but the outcome depends on the starting point of the previous inspection programme. Over the last thirteen years Tischuk Enterprises UK Ltd have worked closely with a number of Operators.

3 . a) Creation and Maintenance of an Asset Register. The Asset Register is subdivided by plant area or system and equipment type as follows: Static Equipment including pressure vessels. Commercial Impact (Standby Availability and Financial Exposure). Pipework.IEV . The register needs to be INSPECTION PLAN properly maintained throughout the service life of the items since it the basis for computing the Operational Criticality Rating and the resulting inspection strategy. Rotating Equipment and Control Valves.OPERATIONAL CRITICALITY ASSESSMENT Operational Criticality Assessment is a system of analysis identifying the Consequences of failure and Probabilities of failure for each inspectable plant item. The Operational Criticality Rating is based on a 3x3 matrix using the Probability of failure rating and the Consequence of failure rating. equipment and structures with a view to protecting the personnel and the environment and to ensure that the company is able to safely continue its business. c) Assessment of Consequences of Failure.Sair 3 6ª Conferência sobre Tecnologia de Equipamentos Standby Availability and reduction in plant downtime. b) Process Review. High criticality being 1 and low criticality being 5. An initial Plant Integrity Review of the Asset Register and a Process Review of the operating conditions is carried out with plant process operations staff prior to the data being loaded into the computer models. The Consequences of Failure Rating uses eight criteria to calculate the rating value. 2 . Pressure system definition and identification is also agreed at this stage. tanks and heat exchangers. OCA CONSEQUENCE CRIT & GRADE PROBABILITY EXTENT OF INSPECTION INSPECTION FREQUENCY INSPECTION METHOD Data is collated to form an Asset Register which is a record file containing design and operating details of all the pressure containing equipment.PROCEDURE ADOPTED BY TO ESTABLISH A REVISED INSPECTION PHILOSOPHY USING THE T-OCA SYSTEM . Safety COTEQ 067 . design conditions and the plant history and uses a series of knowledge based computer models and is delivered as an easily maintained database. The system is based on operating conditions. Definition of Pressure Systems and Initial Plant Integrity Review. both these reduce the flexibility for shutdown and maintenance windows. process fluid composition. Relief Valves. materials of construction. The objective of the inspection process applied is to ensure the integrity of the plant.

. These models are clearly defined by a series of flow diagrams giving visibility to the decision process used by the computer models. or.Derivation of Operational Criticality Ratings Consequence of failure Probability of Medium Low(3) High (1) failure (2) 3 2 1 High (1) 4 3 2 Medium (2) 5 4 3 Low(3) Allocation of Inspection Grade to Pipework and Static Equipment. or.(IP 12 and IP 13). The probability of failure models in the OCA system operate on three levels: i) Measured rates of deterioration from inspection results ruled valid by the Plant Integrity Review. Fluid Inventory. To allocate the inspection grades previous inspection and test data are reviewed including routine condition monitoring data.IEV .Sair 4 6ª Conferência sobre Tecnologia de Equipamentos Impact (Location Effects. c) the rate of deterioration may not be forecast from past data. All inspectable items shall have a Criticality Rating determined and an Inspection Grade allocated. Hot Hydrogen Cracking and. The date of the last examination plus the endorsement derives the due date for the next examination. Creep. Pressure and Population) and Environmental Impact (Environmental). Temperature Induced Embrittlement (hot and cold). The Probability of Failure Rating is the highest probability calculated from models and rules that evaluate the probability of failure by mechanisms appropriate to the equipment type. which is defined as a period for which the Inspection Authority agrees that it is safe to operate the item. External Corrosion including Corrosion Under Insulation. • Grade 0 ! Items for which: a) there is no historical evidence to predict its service performance (including new items). The Inspection Grade is an indicator of the rate of deterioration and the reliability of any predictions of deterioration. Fluid Hazard. Erosion. Process Fouling. Vessels are graded 0-3 according to condition reports and the history of thorough examinations carried out under the certification scheme. e) Determination of Criticality and Allocation of Inspection Grade. b) the rate of deterioration is high. Wet Hydrogen Cracking. Failure modes used for Pipework and Static Equipment are detailed below: Internal Corrosion. under those operating conditions prevailing prior to the last examination. ii) Predicted rates of deterioration based on industry standard or plant specific calculation methods and iii) Handbook lookup tables. d) Assessment of Probability of Failure. From these an endorsement is derived. Table 1 . Stress Corrosion Cracking. The probabilities of failure identifies failure modes that shall be used to select appropriate inspection methods to be included in the examination of each plant item. Cavitation. It is based on the Institute of Petroleum Model Code of Practice. COTEQ 067 . Mechanical and Thermal Fatigue.

The Operational Criticality Rating together with the Inspection Grade of an item are used to determine the inspection interval. A detailed inspection scope is assigned to items with a high consequence of failure. the purpose of which is to confirm that neither the operating nor maintenance regimes have changed such that the rate of deterioration or its predictability might have been adversely affected. • Grade 2 ! Items which have: a) at least one previous examination at grade 0. or. Items on grade 3 are to be subjected to a Plant Integrity Review at the half life intervals. b) a moderate rate of deterioration. The Tischuk OCA process offers three degrees of freedom in developing the most appropriate inspection plan.IEV . c) a negligible rate of deterioration in a stable service environment. b) a low rate of deterioration with a Remnant Life => Remnant Design Life and which may be forecast from past data with confidence. The Consequence of Failure is used to derive the scope of inspection. The Probability of Failure identifies the expected failure mechanism and is used to select the most appropriate inspection or NDT method I) Determination of Inspection Intervals. in combination with the Inspection Grade is used to determine the major inspection intervals. CRITICALITIES GRADE 0 GRADE 1 GRADE 2 GRADE 3 CONSEQUENCE S 1 2 3 4 5 2 2 2 3 3 N/A 4 4 6 N/A N/A N/A 6 8 8 N/A N/A 8 10 12 H H/M H/M/L M/L L DETERIORATION HIGH MEDIUM LOW NEGLIGIBLE II) Determination of Inspection Scope.Derivation of Inspection Intervals in years for Pipework and Static Equipment. and. • Grade 3 ! Items which have either: a) at least one examination at grade 0 and one examination at either grade 1 or 2.Sair 5 6ª Conferência sobre Tecnologia de Equipamentos • Grade 1 ! Items which have: a) at least one previous examination at grade 0. Table 2 . and. b) a low rate of deterioration. f) Inspection Plan Development. The Criticality. and. The following table may be used as an example where the interval periods are in months. Inspection scope is determined by the consequences of failure. A general scope is assigned to items with medium consequences of failure and a limited scope is assigned to items with low consequences of failure COTEQ 067 .

4) to establish the level of confidence in the predictability of the deterioration rate. such as inspection costs. environmental issues.Supplemental NDT Inspection Methods Failure Mode Mechanisms Internal Wall Internal Corrosion/Erosion/ Thinning Cavitation/Weld Corrosion External Wall External Corrosion/ Thinning Corrosion Under Insulation Cracking Fatigue/Stress Corrosion Cracking/Wet Hydrogen Cracking Other Creep/Hot Hydrogen Damage/High Temperature Embrittlement NDT Methods Ultrasonic/Radiography Visual Inspection/Radiography Thermography Ultrasonic/Radiography Magnetic Particle/ Liquid Penetrant Ultrasonic/Radiography Magnetic Particle g) Plant Integrity Review. Methods are chosen to detect the likely failure modes. lost production. A more representative analysis would consider.ECONOMIC IMPACT OF RISK BASED INSPECTION STRATEGIES The application of Risk Based Inspection is having an economic impact on Oil and Gas production. The choice of non-destructive inspection methods is based on the probability of failure. effecting value added to the operation. The purpose of the review is: 1)to identify any additions. 4 . The Plant Integrity Review serves to introduce new items into the Assessment Register and to review the results of inspection and monitoring activities. Risk Based Inspection strategies are targeted at reducing the seldom considered costs. When analysing operational costs incurred. maintenance costs and management costs. downtime. 2) to establish the actual condition of items and their fitness for purpose. there is a tendency to only consider the visible expenses. and regulatory compliance. Table 3 . COTEQ 067 .Sair 6 6ª Conferência sobre Tecnologia de Equipamentos III) Determination of Inspection Methods. Several case histories are detailed demonstrating the ‘lifecycle’ value of Risk Based Inspection Strategies. changes or deletions to the Asset Register. Table 3 below is shown as an example. unplanned failures. these direct costs only contribute a small fraction to the total cost of operation. One of the purposes of the Plant Integrity Review is to ensure that all data having an impact on the Criticality Rating remains valid and that historical inspection and maintenance data has been incorporated in the Probability of Failure Ratings. in addition to the visible expenses. 3) to establish the observed deterioration mechanisms and rates and. the costs of shutdowns.IEV .

the inspection frequency was prescriptive in nature and in some cases statutory. A targeting of appropriate inspection techniques to most vulnerable plant identified by the OCA analysis. the operator has moved to the following non-intrusive and ‘on-line’ methods of inspection which do not have the same need to shutdown. insulation removal. This non-invasive methodology has the acceptance of the Health and Safety Executive (HSE).CASE HISTORY 1 The first case history considers a North Sea Gas Terminal. Application of ‘alternative’ inspection techniques.IEV . Vessels and Relief Valves. Initially based on Industry standards. 2. and the associated costs. At maximum capacity this equates to 132 million standard cubic metres of gas production. it also allows the full intervention frequency to be extended.000 per annum. with three pipelines and a normal winter gas rate of approximately 45 million Standard cubic metres per day (1. COTEQ 067 . mechanical assistance. This involves isolation. 6. The terminal adopted a Risk Based Strategy based on the Tischuk OCA system for revising both planned maintenance and inspection philosophy for the Piping systems. The objective of the inspection process applied is to ensure the integrity of the plant. The alternative methods which may be initially expensive have associated potential savings in downtime and service costs. 3. A decrease in the length of intervention periods from 21 days to 10 days giving an approximate saving in production capacity of 50%. The re-determination of both frequency of intervention and applied inspection techniques.Sair 7 6ª Conferência sobre Tecnologia de Equipamentos 5 . providing a 30-40% saving in plant downtime and production capacity. As a result of improved confidence in the condition of the equipment. in 1994 with the following results: 1. scaffolds. equipment and structures with a view to protecting the personnel and the environment and to ensure that the company is able to safely continue its business.4 BSCF/day) supplying 15-20 % of the current UK demand. and vessel entry preparations. By utilising these easily effected. This has provided a sound basis for the application of the terminal’s Risk Based Inspection Strategies. An increase in the periodicity of major intervention in most plant areas extending from two yearly to three yearly for minor inspections and from four yearly to six yearly for major inspections. 5. 7. which have been implemented at similar costs to the previous prescriptive regime. purge or otherwise prepare the plant. however a very thorough programme of inspection was supplied giving a high level of reliability and confidence. A reduction in associated inspection services and mechanical man-hours of 31% giving a cost saving of £ 145. purges. the requirement is reduced for full personal access. The inspection philosophy applied to the plant and equipment at the terminal has continuously evolved since 1978. 4. A reduction in inspection man-hours of 26% giving a cost saving of £ 48.000 per annum. less invasive alternative methods of inspection for more frequent interim internal checks.

Developments in remote visual inspection equipment and video image enhancement are being utilised to internally inspect large vessels and similar voids with borescopes.<8”). a reduction of 70% in the level of Ultrasonic Testing.IEV . The move to non-intrusive inspection methods has been possible due to the relatively benign dry gas the field produces. When in production the platforms can deliver in excess of 1500 million standard cubic feet of gas per day. equating to 480 million standard cubic metres of gas production. an increase in the intervals of internal vessel Inspections. ‘On-line’ monitoring for regular repeat scanning of Pipework where erosion is seen as a potential problem. This leads to a reduction in shutdown days and thus value added to the cost of operation. ‘smoothing out’ the programme over the next six years. the use of thermal imaging to monitor Pipework insulation and Rotating Equipment. The inspection regime used will take advantage of any ‘opportunity’ driven shutdowns to augment the inspection techniques performed. and videoimagescopes providing a very high image quality. 3. without compromising safety and environmental issues within the terminal.000 per annum. 6 .000 from the inspection costs of the pressure systems. It should be noted however.Sair 8 6ª Conferência sobre Tecnologia de Equipamentos Inspection equipment has improved significantly in recent years with much better ‘repeatability’ when using Ultrasonic and Eddy Current surveys. and a high level of confidence in the condition of the equipment and in the methods of inspection employed. It is also used as a mass gas storage site. indicated that there would be annual savings in excess of £ 56. for Visual Inspection and Ultrasonic Thickness Measurement. The field has a gas compression facility to enable gas to be pressurised and reinjected into the reservoir. by an average of 20 months. it is estimated over a 6 year period that there will be a 66% reduction in shutdown days. As a result.CASE HISTORY 2 The second case history considers a UK Gas field which has an indigenous reservoir of approximately 280 billion cubic feet of gas. reduction in shutdown days providing additional revenue of £ 140. and the use of Real Time Radiography to detect corrosion under insulation for small bore pipework (Dia. 2. Changes in the gas industry have reduced the flexibility and minimised windows for Inspection and maintenance. Vessel Inspection Plugs and Visual Inspection Ports are used to provide suitable access. Thus. The planned Inspection workscope produced for the next 6 to 8 years utilises non-intrusive methods of inspection and is systematically replacing the previous shutdown policy based on the statutory requirements. the operator adopted a Risk Based approach for their Inspection Regime by performing an Operational Criticality Assessment in 1995. this being achieved by the following: 1. from an initial investment of £ 80. COTEQ 067 . Results of a pilot Operational Criticality Assessment performed on the condensate system.000 for the implementation costs. that the shutdown costs for 1997 have indicated an increase of 15% this was due to optimising the vessel inspection scheduling.

The refinery employs a rolling four year internal vessel inspection programme. 3. It is predicted that financial benefits will be realised in ‘lifecycle’ inspection and maintenance costs.000 from 1997’s Inspection costs. prepare and inspect a vessel. A reduction in shutdown costs of £ 1 million. Equating to a net revenue gain of £ 2¾ million for each shutdown. Due to a recent extensive modification programme the hydro desulphuriser plant contained more vessels requiring internal inspection The modifications have reduced the vessel inspection grade allocation. For new oil and gas fields producing 15 thousand barrels of condensate per day. These figures are based on an average cost of £ 5.000 to shutdown.Sair 9 6ª Conferência sobre Tecnologia de Equipamentos 7 .IEV . by applying Risk Based Strategies to inspection and maintenance philosophies. where Risk Based Strategies.3%. as the frequency between intervention periods is increased. it is estimated that there will be a reduction of £ 100. By the application of Risk Based Inspection. The operator is currently achieving some of the financial benefits through the implementation of their Risk Based strategies. the number of vessels requiring internal examination has reduced in 90% of the plants considered. through risk based programmes. and 41% in vessel inspection. 2. by moving away from the previous statutory five year Inspection plan.000 from 1997’s inspection campaign. it is anticipated that the inspection grade will improve. through the use of Operational Criticality Assessment have been applied for the last 5 years. and take no account of the additional value added by lost production cost savings. and 400 million standard cubic feet of gas per day. Both financial and non financial benefits are being realised. and thus increases the level of inspection required. giving a further reduction in costs of 33.CASE HISTORY 4 The fourth case history considers an operator with both new and mature North Sea Oil and Gas Fields. The non financial benefits recognised by the operator have demonstrated commitment to the health and safety of the workforce. 8 . COTEQ 067 . Initially by reducing the number of internal vessel inspections by 50%-60% and then by continuous improvement. a 27% reduction in shutdown duration has been achieved. A mature oil field producing 9 thousand barrels of oil per day has realised savings of 25 % in pipeline inspection. giving a total cost saving of £ 70. by reducing the number of vessels requiring intrusive inspection.CASE HISTORY 3 The third case history looks at a some process plants from a large UK refinery. and commitment to the governing regulations. The refinery produces a net value of £ 2½ million per day and has incurred costs of £ 300.000 to implement their Risk Based Inspection Strategies which has achieved the following: 1.

By performing. Considering the loss of pipeline tariff. process monitoring and control programme is to be effected. as a first pass an Operational Criticality Assessment. sweet.Sair 6ª Conferência sobre Tecnologia de Equipamentos 10 9 . leading to revenue gain of £ 1¼ million per annum. producing 93 thousand barrels of oil per day. and through it’s implementation it is expected that the operator will realise the following benefits. for its 30 year design life which minimises production lost through inspection. By utilising non-intrusive inspection there is an estimated reduction in planned shutdown days for vessel inspections. The envelope and any significant process excursions are to be reviewed on a regular basis. gas conditions during normal operation. processing gas valuing £ 8 million per day. carbon dioxide. were commensurate with maintaining the mechanical integrity of the plant over its design life. from the current £ 2½ million per annum. to zero over a five year period. Risk Based Inspection strategies have been applied to produce a ‘lifecycle’ inspection schedule. and organic acids.000 per day of shutdown.CASE HISTORY 5 The fifth case history considers a North Sea Oil field. over a four year period. These conditions reduce the potential for significant internal corrosion.000 per annum. It is anticipated that this will be the only inspection driven shutdown. An extensive review of the material selection philosophy. This schedule will only be valid if the process conditions are kept within the specified envelope. An estimated reduction in unplanned failure costs. The results of the inspection are to be fed back into the Operational Criticality Assessment via the PIR module providing an update of the assessment. hydrogen sulphide. A stringent. achievable if un-predicted failures are eliminated. and make a ‘lifecycle’ nonintrusive inspection schedule feasible. COTEQ 067 . and exporting 242 million standard cubic feet of gas per day. The operator has adopted Risk Based Inspection strategies for it’s corrosion and inspection management programmes. determined that the materials selected. from the current five days per year to one day per year. Therefore. An estimated reduction of £ 1 million from 1997 inspection costs. if a three day shutdown is avoided there is a potential net revenue gain of £ 408. It considered the damage mechanisms expected from plant experiencing dry. achievable by improving inspection efficiency and utilising more appropriate methods of inspection. throughout the design life of the plant. a nonintrusive inspection schedule has been determined for the treatment plant. if inspection driven shutdowns are minimised there is a potential saving of £ 136. identifying levels of water content. then a detailed HAZOP study on the high risk items.IEV . chlorides. 10 . One planned inspection driven shutdown has been scheduled two years into the operation. A five year strategy plan has been developed.CASE HISTORY 6 The final case history considers a new onshore Gas treatment plant.

Janeiro de [1] 2001 COTEQ 067 . for both planned maintenance and inspection. Draft #6.CONCLUSIONS The application of Risk Based Inspection through the use of Operational Criticality Assessment is proving to be economically viable. A structured assessment utilising generic and historical data and sound engineering basis for the revision of the companies inspection philosophy. American Petroleum Institute. providing a fully auditable process reflecting regulatory compliance. 12 .BENEFITS By introducing Risk Based Inspection. availability. reliability and a higher level of confidence in the plant condition. Risk Based Inspection.Sair 6ª Conferência sobre Tecnologia de Equipamentos 11 11 . improved prediction of failures giving enhanced safety. reducing direct inspection related costs and minimising lost production costs. the following benefits are being experienced throughout the Oil and Gas and Petrochemical Industries: A better understanding of the probabilities and consequences of failure leading to a more effective means of control and surveillance. ‘on-line’ methods of inspection instead of the traditional ‘off-line’ methods has resulted in shorter and possibly less frequent shutdowns. The adoption of Risk Based Inspection programmes allows both new and improved ‘alternative‘ methods of inspection to be applied where suitable. providing both financial and non financial benefits for operators. For these strategies to be successful inspection methods available require continual review leading to progressive development utilising the most effective method of inspection. Risk Based Inspection strategies have been successful. with associated reduction in permanent inspection manning. in reviewing the frequency of interventions and the use of applied inspection techniques. Tischuk International. July. The application of the 80/20 rule. 2001 T-OCA 2000 – Technical Training Manual. The change to ‘non-intrusive’. 13 – REFERENCE API RP 580.IEV . allows RBI principles to determine the relatively few most critical items allowing significant increases in their inspection intervals and a reduction in scope for many non-critical items.