Professional Documents
Culture Documents
Page 1 of 1
ECONOMICS OF RISK BASED INSPECTION SYSTEMS IN OFFSHORE OIL AND GAS
PRODUCTION.
TITLE:-
AUTHOR:-
Susan Cushnaghan
Operations Co-ordinator.
Tischuk Enterprises (UK) Ltd
52 Regent Quay, Aberdeen.
Synopsis
Risk Based Inspection (RBI) is a method for using risk as a basis for managing an inspection
programme. 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. Risk is defined
as the combination of the probability of failure and the consequences of failure.
Tischuk Enterprises (UK) Ltd has developed an integrated software system based on the
Tischuk Operational Criticality Assessment (OCA) system of analysis. This is designed to
assess risk in a simple and cost effective way and is a fundamental part of the development,
implementation and management of risk based strategies. OCA uses a 3 x 3 risk matrix to
represent the different levels of risk.
Over the last ten years Tischuk Enterprises UK Ltd have worked closely with a number of
Operators, to implement Risk Based Strategies into their Inspection and Maintenance
philosophies, through the use of Operational Criticality Assessment.
These strategies provide techniques to re-determine both the frequency of intervention and
the applied inspection techniques. This has involved:1.
2.
3.
4.
5.
The application of Risk Based Inspection has an economic impact on Oil and Gas production.
The impact is generally positive but the outcome depends on the starting point of the previous
inspection programme.
http://www.oilcv.com
http://www.bms-project.com
tp1_economics.DOC
Prepared by Susan Cushnaghan.
22 Dec 97
Page 2 of 2
ECONOMICS OF RISK BASED INSPECTION SYSTEMS IN OFFSHORE OIL AND GAS
PRODUCTION.
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.
The regulations put the onus onto the operators to adopt a planned, systematic and auditable
approach to a variety of functions within their operations including, Inspection and
Maintenance.
They clearly define the competence and the function of those bodies responsible for
inspection and test, and detail the procedure for Written Schemes of Examination, and they
move away from date based slavish methods of inspection which were previously used.
The application of Risk Based Inspection Strategies, affords the opportunity for operators to
implement new methods for Inspection and Maintenance and accommodates the increasingly
stringent demands placed on industry reducing Standby Availability and reduction in plant
downtime, both these reduce the flexibility for shutdown and maintenance windows.
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 system is based on operating conditions, process fluid composition, materials of
construction, design conditions and the plant history and uses a series of knowledge based
computer models and is delivered as an easily maintained database.
The Operational Criticality Rating is based on a 3x3 matrix using the Probability of failure
rating and the Consequence of failure rating, High criticality being 1 and low criticality being 5.
PROCEDURE ADOPTED BY TO ESTABLISH A REVISED INSPECTION PHILOSOPHY
USING THE TISCHUK OPERATIONAL CRITICALITY ASSESSMENT (OCA) SYSTEM
1.
2.
3.
4.
5.
6.
7.
OCA
CONSEQUENCE
PROBABILITY
EXTENT
OF
INSPECTION
INSPECTION
FREQUENCY
INSPECTION
METHOD
INSPECTION
PLAN
tp1_economics.DOC
Prepared by Susan Cushnaghan.
22 Dec 97
Page 3 of 3
ECONOMICS OF RISK BASED INSPECTION SYSTEMS IN OFFSHORE OIL AND GAS
PRODUCTION.
Failure modes used for Pipework and Static Equipmentare detailed below:
tp1_economics.DOC
Prepared by Susan Cushnaghan.
22 Dec 97
Page 4 of 4
ECONOMICS OF RISK BASED INSPECTION SYSTEMS IN OFFSHORE OIL AND GAS
PRODUCTION.
1. Internal Corrosion
2. External Corrosion including Corrosion Under Insulation
3. Erosion
4. Cavitation
5. Creep
6. Mechanical and Thermal Fatigue
7. Stress Corrosion Cracking
8. Temperature Induced Embrittlement (hot and cold)
9. Wet Hydrogen Cracking
10. Hot Hydrogen Cracking
11. Process Fouling
Probability of Failure
High
Medium
Low
High
1
2
3
Consequence of Failure
Medium
2
3
4
Low
3
4
5
tp1_economics.DOC
Prepared by Susan Cushnaghan.
22 Dec 97
Page 5 of 5
ECONOMICS OF RISK BASED INSPECTION SYSTEMS IN OFFSHORE OIL AND GAS
PRODUCTION.
Grade 2
Items which have :
a) at least one previous examination at grade 0
and
b) a low rate of deterioration.
Grade 3
Items which have either:
a) at least one examination at grade 0 and one examination at either grade 1 or 2
and
b) a low rate of deterioration with a Remnant Life => Remnant Design Life and which
may be forecast from past data with confidence
or
c) a negligible rate of deterioration in a stable service environment.
Items on grade 3 are to be subjected to an Authoritative Review at the half life intervals, 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.
6) Inspection Plan Development.
The Tischuk OCA process offers three degrees of freedom in developing the most
appropriate inspection plan.
x The Criticality, in combination with the Inspection Grade is used to determine the major
inspection intervals
x The Consequence of Failure is used to derive the scope of inspection
x The Probability of Failure identifies the expected failure mechanism and is used to select
the most appropriate inspection or NDT method
a) Determination of Inspection Intervals.
Piping and Static Equipment.
The Operational Criticality Rating together with the Inspection Grade of an item are used to
determine the inspection interval. The following table may be used as an example where the
interval periods are in months.
Table 2 - Derivation of Inspection Intervals in years for Pipework and Static Equipment.
CRITICALITIES
GRADE
0
GRADE
1
GRADE
2
GRADE
3
CONSEQUENCES
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
tp1_economics.DOC
Prepared by Susan Cushnaghan.
22 Dec 97
Page 6 of 6
ECONOMICS OF RISK BASED INSPECTION SYSTEMS IN OFFSHORE OIL AND GAS
PRODUCTION.
Mechanisms
Internal Corrosion
Erosion
Cavitation
Weld Corrosion
External Corrosion
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
7) Authoritative Review.
One of the purposes of the Authoritative 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.
The Authoritative Review serves to introduce new items into the Assessment Register and to
review the results of inspection and monitoring activities. The purpose of the review is:
1. to identify any additions, changes or deletions to the Asset Register
2. to establish the actual condition of items and their fitness for purpose
3. to establish the observed deterioration mechanisms and rates
4. to establish the level of confidence in the predictability of the deterioration rate.
Equipment should be subject to an Authoritative Review to assess its current grade allocation
and endorsement when:
1. any Inspection Report is being prepared
2. significant changes have taken place in the operating conditions which could affect
the rate of deterioration
3. following an abnormal incident which could have affected the integrity of the
equipment
4. 'On-stream' methods such as corrosion monitoring or measurements of process
stream composition have indicated that there has been any significant change which
may have affected the rate of deterioration.
tp1_economics.DOC
Prepared by Susan Cushnaghan.
22 Dec 97
Page 7 of 7
ECONOMICS OF RISK BASED INSPECTION SYSTEMS IN OFFSHORE OIL AND GAS
PRODUCTION.
tp1_economics.DOC
Prepared by Susan Cushnaghan.
22 Dec 97
Page 8 of 8
ECONOMICS OF RISK BASED INSPECTION SYSTEMS IN OFFSHORE OIL AND GAS
PRODUCTION.
tp1_economics.DOC
Prepared by Susan Cushnaghan.
22 Dec 97
Page 9 of 9
ECONOMICS OF RISK BASED INSPECTION SYSTEMS IN OFFSHORE OIL AND GAS
PRODUCTION.
The move to non-intrusive inspection methods has been possible due to the relatively benign
dry gas the field produces, and a high level of confidence in the condition of the equipment
and in the methods of inspection employed.
The inspection regime used will take advantage of any opportunity driven shutdowns to
augment the inspection techniques performed.
Results of a pilot Operational Criticality Assessment performed on the condensate system,
indicated that there would be annual savings in excess of 56,000 from the inspection costs
of the pressure systems, this being achieved by the following:
x a reduction of 70% in the level of Ultrasonic Testing.
x an increase in the intervals of internal vessel Inspections, by an average of 20 months.
x reduction in shutdown days providing additional revenue of 140,000 per annum.
It should be noted however, that the shutdown costs for 1997 have indicated an increase of
15% this was due to optimising the vessel inspection scheduling, smoothing out the
programme over the next six years.
CASE HISTORY 3
The third case history looks at a some process plants from a large UK refinery, where Risk
Based Strategies, through the use of Operational Criticality Assessment have been applied
for the last 5 years.
The refinery employs a rolling four year internal vessel inspection programme.
By the application of Risk Based Inspection, the number of vessels requiring internal
examination has reduced in 90% of the plants considered.
Due to a recent extensive modification programme the hydro de-sulphuriser plant contained
more vessels requiring internal inspection The modifications have reduced the vessel
inspection grade allocation, and thus increases the level of inspection required.
The refinery produces a net value of 2 million per day and has incurred costs of 300,000
to implement their Risk Based Inspection Strategies which has achieved the following:
x a 27% reduction in shutdown duration has been achieved, by reducing the number of
vessels requiring intrusive inspection.
x Equating to a net revenue gain of 2 million for each shutdown,
x A reduction in shutdown costs of 1 million.
CASE HISTORY 4
The fourth case history considers an operator with both new and mature North Sea Oil and
Gas Fields.
Both financial and non financial benefits are being realised, by applying Risk Based
Strategies to inspection and maintenance philosophies.
The non financial benefits recognised by the operator have demonstrated commitment to the
health and safety of the workforce, and commitment to the governing regulations.
tp1_economics.DOC
Prepared by Susan Cushnaghan.
22 Dec 97
Page 10 of 10
ECONOMICS OF RISK BASED INSPECTION SYSTEMS IN OFFSHORE OIL AND GAS
PRODUCTION.
It is predicted that financial benefits will be realised in lifecycle inspection and maintenance
costs. Initially by reducing the number of internal vessel inspections by 50%-60% and then
by continuous improvement, through risk based programmes, it is anticipated that the
inspection grade will improve, giving a further reduction in costs of 33.3%, as the frequency
between intervention periods is increased.
These figures are based on an average cost of 5,000 to shutdown, prepare and inspect a
vessel, and take no account of the additional value added by lost production cost savings.
The operator is currently achieving some of the financial benefits through the implementation
of their Risk Based strategies.
x A mature oil field producing 9 thousand barrels of oil per day has realised savings of 25 %
in pipeline inspection, and 41% in vessel inspection, giving a total cost saving of 70,000
from 1997s inspection campaign.
x For new oil and gas fields producing 15 thousand barrels of condensate per day, and
400 million standard cubic feet of gas per day, it is estimated that there will be a reduction
of 100,000 from 1997s Inspection costs, by moving away from the previous statutory
five year Inspection plan.
CASE HISTORY 5
The fifth case history considers a North Sea Oil field, producing 93 thousand barrels of oil per
day, and exporting 242 million standard cubic feet of gas per day. The operator has adopted
Risk Based Inspection strategies for its corrosion and inspection management programmes.
A five year strategy plan has been developed, and through its implementation it is expected
that the operator will realise the following benefits.
x An estimated reduction of 1 million from 1997 inspection costs, over a four year period,
achievable by improving inspection efficiency and utilising more appropriate methods of
inspection.
x By utilising non-intrusive inspection there is an estimated reduction in planned shutdown
days for vessel inspections, from the current five days per year to one day per year,
leading to revenue gain of 1 million per annum.
x An estimated reduction in unplanned failure costs, from the current 2 million per
annum, to zero over a five year period, achievable if un-predicted failures are eliminated.
CASE HISTORY 6
The final case history considers a new onshore Gas treatment plant, processing gas valuing
8 million per day.
Risk Based Inspection strategies have been applied to produce a lifecycle inspection
schedule, for its 30 year design life which minimises production lost through inspection.
By performing, as a first pass an Operational Criticality Assessment, then a detailed HAZOP
study on the high risk items, a non-intrusive inspection schedule has been determined for the
treatment plant.
An extensive review of the material selection philosophy, determined that the materials
selected, were commensurate with maintaining the mechanical integrity of the plant over its
design life.
tp1_economics.DOC
Prepared by Susan Cushnaghan.
22 Dec 97
Page 11 of 11
ECONOMICS OF RISK BASED INSPECTION SYSTEMS IN OFFSHORE OIL AND GAS
PRODUCTION.
It considered the damage mechanisms expected from plant experiencing dry, sweet, gas
conditions during normal operation.
These conditions reduce the potential for significant internal corrosion, and make a lifecycle
non-intrusive inspection schedule feasible.
This schedule will only be valid if the process conditions are kept within the specified
envelope.
A stringent, process monitoring and control programme is to be effected, identifying levels of
water content, carbon dioxide, hydrogen sulphide, chlorides, and organic acids.
The envelope and any significant process excursions are to be reviewed on a regular basis.
One planned inspection driven shutdown has been scheduled two years into the operation.
The results of the inspection are to be fed back into the Operational Criticality Assessment via
the Authoritative Review module providing an update of the assessment.
It is anticipated that this will be the only inspection driven shutdown, throughout the design life
of the plant.
Considering the loss of pipeline tariff, if inspection driven shutdowns are minimised there is a
potential saving of 136,000 per day of shutdown.
Therefore, if a three day shutdown is avoided there is a potential net revenue gain of
408,000 per annum.
tp1_economics.DOC
Prepared by Susan Cushnaghan.
22 Dec 97
Page 12 of 12
ECONOMICS OF RISK BASED INSPECTION SYSTEMS IN OFFSHORE OIL AND GAS
PRODUCTION.
BENEFITS
By introducing Risk Based Inspection, the following benefits are being experienced
throughout the Oil and Gas and Petrochemical Industries:
x A better understanding of the probabilities and consequences of failure leading to a more
effective means of control and surveillance; improved prediction of failures giving
enhanced safety, availability, reliability and a higher level of confidence in the plant
condition.
x The application of the 80/20 rule, 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.
x The change to non-intrusive, on-line methods of inspection instead of the traditional offline methods has resulted in shorter and possibly less frequent shutdowns, reducing
direct inspection related costs and minimising lost production costs, with associated
reduction in permanent inspection manning.
x A structured assessment utilising generic and historical data and sound engineering basis
for the revision of the companies inspection philosophy, providing a fully auditable process
reflecting regulatory compliance.
CONCLUSIONS
The application of Risk Based Inspection through the use of Operational Criticality
Assessment is proving to be economically viable, providing both financial and non financial
benefits for operators.
Risk Based Inspection strategies have been successful, in reviewing the frequency of
interventions and the use of applied inspection techniques, for both planned maintenance and
inspection.
The adoption of Risk Based Inspection programmes allows both new and improved
alternative methods of inspection to be applied where suitable. For these strategies to be
successful inspection methods available require continual review leading to progressive
development utilising the most effective method of inspection.
http://www.oilcv.com
http://www.bms-project.com
tp1_economics.DOC
Prepared by Susan Cushnaghan.
22 Dec 97