Industrial Internet

of Things (IIoT)
T. LAHTI, L. SAURUS and N. HELLGREN, NAPCON,
Neste Engineering Solutions, Turku, Finland

Industry 4.0 in the oil and gas business

The operational cost structure of oil
and gas companies is very capital- and la-
bor-intensive. The long-term peak of oil-
field production capacity may be reached
when the world is actively chasing alter-
native solutions for fossil fuels. Everyday
operations are constantly challenged by
the scattered and continuously evolving
supply and demand of raw materials and
end products.
To ensure profitable and sustainable
business, the efficient delivery of on-spec-
ification products to the right location at
the right time is key. Therefore, flexibility
and real-time visibility of every operation-
al function is a must. As legislations tight-
en, environmental awareness rises and
customer requirements evolve, oil and gas
companies must store and ship more raw
materials and end products while simulta-
neously doing it faster, with minimal en-
ergy consumption and in a safer manner.
Inventory control and capacity opti-
mization play essential roles in the global
competition between service providers.
Companies must invest in production au-
tomation and optimization to respond to
increased demands from both legislation
and customers.
erating capacity from renewable energy
dwarfed the 70 GW of net new capacity
from fossil fuels in 2017.1
However, the circular economy requires
traceability for transparency of raw materi-
als throughout the supply chain. Inconsis-
tent and distributed material sources will
introduce new challenges to the entire pro-
duction chain. Information on the quality
and quantity of batches must be available,
starting from upstream, to enable the ef-
ficient and appropriate collecting and fur-
ther processing of waste. To manage these
demands, modern data acquisition and
refining capabilities in the form of intelli-
gent digital solutions on top of traditional
operational automation are required.
Biofuels for traffic is one application
area for the circular economy. This ob-
jective is driven by the EU, which aims
to reduce transport emissions and de-
pendence on oil. The EU is targeting an
increase in the use of renewable energy
in transport by 2020, so that its share will
amount to 10% of energy content of fu-
els. Legislation for 2030 is still underway.2
However, collecting scattered raw ma-
terials in a timely manner generates ad-
ditional challenges for logistics and stor-
age systems. Combining numerous small
resource flows cost-effectively requires
efficient logistics. To make decisions effi-
ciently, logistics operators must be aware
of the state of the entire supply chain and
the anticipated discharge time, and com-
municate that information accordingly, so
that logistics can be cost-efficiently and
optimally arranged (FIG. 1).
To achieve these goals, robust autono-
mous systems for remote monitoring
of material collection and transport are
needed. The used material tracking and
sensor systems must be easily installable
and work accurately and reliably in any lo-
cation and environment. Storage facilities
must be able to easily communicate with

Evolving technology and digitali-

zation for changing needs. Digitali-
zation, evolving technology and global
mega-trends are generating new business
areas and reshaping existing businesses
and operational methods. Many govern-
ments are mandating reductions in crude
oil consumption. Digitalization has en-
abled new solutions and opportunities to
utilize materials previously seen as waste.
Residues and waste form a continuously
expanding raw materials source for recy- FIG. 1. To make decisions efficiently, logistics operators must be aware of the state of the
cling industries. Including wind, biofuels entire supply chain and the anticipated discharge time, and communicate that information
accordingly, so that logistics can be cost-efficiently and optimally arranged.
and geothermal energy, new power-gen-
Hydrocarbon Processing | DECEMBER 2018 75
 Process Control and Instrumentation
Data search
Reporting
Plant optimizing
Laboratory (LIMS)
Proprietary
Data analyzing
Soft sensors
Process optimizing
Analyzer network
Instrumentation and distributed control system
FIG. 2. Flow of a common process industry information highway.
their centralized management systems,
which, in turn, must be able to easily—
and in an interoperable way—communi-
cate with enterprise operational systems.
As in other industries, the Industrial
Internet of Things (IIoT) has a funda-
mental role in the digitalization of the
physical world and the creation of data
flows for more sophisticated operational
intelligence systems. That generates a
foundation for new artificial intelligence
solutions to advise human operators in
the field and control rooms, and to collect
feedback for operators and process devel-
opment purposes.
Evolving technology introduces new
challenges. Recent technological ad-
vances in the IIoT and data analytics are
moving quickly. As new possibilities are
introduced, business requirements are
also changing rapidly. This drives oil and
gas companies to hesitate and delay their
investment decisions, even if the need for
operational predictive maintenance and
intelligent real-time analytics, decision-
making support and machine learning ap-
plications already exist.
Despite the rapid technology devel-
opment, it is still possible to secure these
investments by considering a few fun-
damental factors: digitalization supplier
independence, industrial solutions move-
ment toward Industry 4.0 and compat-
ibility with relevant technologies, such as
OPC Unified Architecture (UA) and IIoT
system management (authentication,
authorization, scalability and upgrad-
ability). These factors are essential for
meeting Industry 4.0 specifications and
reference architecture model (RAMI4.0)
76 DECEMBER 2018 | HydrocarbonProcessing.com
Enterprise optimizing
ERP
Office database
IIoT
Operational database
Operators database
OPC UA
Advanced process control (APC)
Validating measurements
Inferential calculations
requirements in the future.
Many companies have already estab-
lished plant information management
system (PIMS) software platforms, often
enterprise-wide, to collect information
from multiple plants (FIG. 2). Operating
companies cannot afford to rip and re-
place these systems. Therefore, it is essen-
tial that new operational intelligence solu-
tions that introduce additional data layers
are vendor-independent and technologi-
cally in line with existing and upcoming
IT and OT infrastructure.
Edge computing. Data analytics is in-
creasingly moving from cloud environ-
ments to the edge of the source network
or to the outer boundary of the cloud. In
many cases, this paradigm shift is driven by
an amount of data becoming too large for
transmission, or requirements for response
timeliness growing too strict for traditional
cloud-based solutions. Confidentiality of
information may also compel customers
to request the processing of information
to be near the production network (i.e., on
the edge). Cloud and edge solutions boost
platform independency and set strict re-
quirements for information security.
In the future, only processed knowl-
edge based on raw data will be transferred
to the cloud. This will be more valuable
for business operations, but it may expose
sensitive details of business operations if
not properly protected. One of the best
approaches for ensuring secure data trans-
fer between plants, edge solutions, and
the cloud environment is the utilization of
established standards, such as the Indus-
try 4.0-endorsed OPC OPC UA. IoT and
edge device remote management and con-
trol also play a key role in ensuring system
integrity and business continuity.
ML and AI drive intelligent solutions.
The biggest drivers behind the IoT in
many industries are the vast possibilities
of artificial intelligence (AI) and other ad-
vanced analysis solutions applications, as
they need big data for models and related
estimates. In many future applications,
the IIoT will ultimately be a tool for gath-
ering the required data for AI solutions.
To guarantee strong customer expe-
rience for these AI applications, wide
know-how of applied industries and spe-
cialized verticals are needed from devel-
opers. McKinsey3 states that, in the final
game, industrial customers want compre-
hensive solutions that do not need to be
combined from partial solutions. That
encourages businesses to build opera-
tional intelligence layers in collaboration
with turnkey solutions providers having
IIoT, analytics and machine learning ca-
pabilities as integral parts of the overall
solution. Customers requesting shorter
time to market do not want to start sev-
eral projects to build semi-finished tech-
nologies or SW libraries, coordinate inte-
gration of multiple solutions with varying
needs and purposes, or think about how
to acquire data for the business case.
Industry 4.0. Industry 4.0 provides a vi-
sion of how different players in the field
of process industry will work in a more
customer-driven, more automated, more
flexible and more efficient way. The intel-
ligence of systems drives automation, peo-
ple and organizations digitally. Industry
4.0 and digitality enable the setup of new,
more productive processes with enhanced
visibility and management capabilities. To
ensure these comprehensive benefits, In-
dustry 4.0 is concerned with all processes
of the company: production, procure-
ment, sales and logistics, to mention a few.
Parts of Industry 4.0 already exist,
while others are still in the hype phase
and will be realized over the longer term.
This causes uncertainty around what is al-
ready available for investment, and what is
not yet worthy of attention. Existing tech-
nologies can already enable the digital
control of small delivery lots with trans-
parency and excellent response capability.
Instead of relying on ad hoc solutions
focused on transmitting information de-
spite technology limitations (e.g., e-mail-
 Process Control and Instrumentation

ing spreadsheet documents to all related Distributed industrial data-gathering moving data between enterprise-type sys-
parties, or designing custom interfaces systems comprising multiple parties and tems and controls, monitoring devices and
to related databases), modern, Industry vast quantities of data face security-re- sensors that interact with real-world data.
4.0-enabled applications embrace the lated challenges common to distributed Since its introduction in 2008, OPC
possibilities of uniform communications big data systems: data integrity, availabil- UA has gained a large adaptation rate
and the minimized overhead of well-de- ity and confidentiality. Finding a balance among industry solution providers and
signed protocols and interfaces. between communication confidentiality businesses. The protocol has received
Ease of analysis, experimentation and and system availability for all applicable multiple revisions, reflecting fast-paced
synthetization of collected data presents parties is critical to successful integration. changes on the technical front and cus-
previously undiscovered knowledge and Industry 4.0 seeks to mitigate collabora- tomer needs. As stated by Craig Resnick,
possibilities. As an example, equipping tion-related issues by recommending that Vice President of ARC Advisory Group,
all related systems with standardized in- all systems communicate in a standard- “OPC technology has become a de facto
terfaces enables data analysts to easily ized fashion, specifically OPC UA. global standard for moving data from in-
connect their tools to multiple sources of dustrial controls to visualization up to
data without the additional technical and OPC UA. The chosen communication and MES/ERP and IT cloud levels.”5
cognitive overhead of dealing with a wide information model for Industry 4.0 is OPC OPC UA specifies a service-oriented
variety of protocols, data formats and ser- UA. While it is not a new protocol, it uti- communication protocol and an exten-
vice interfaces. To answer these demands, lizes established best practices of the indus- sive information modeling system that
comprehensive advanced analytics and try. OPC UA can be briefly described as “a are platform- and programming language-
intelligence solutions emerge, forming an platform-independent, service-oriented independent. This ensures that all data
intelligent operational layer between ISA- architecture that integrates all the function- can be seamlessly transferred between
95 layers three (manufacturing operations ality of the individual OPC Classic specifi- different systems, from small embedded
management) and four (business plan- cations into one extensible framework.”4 It devices to large mainframe servers, while
ning and logistics). These solutions also emphasizes open transports, high security simultaneously maintaining the consis-
serve a multitude of needs, from predic- and a more complete information model tency of interpretation. In addition, OPC
tive maintenance to AI advisor systems to than the original OPC. OPC UA provides UA comes with built-in security features,
lifelong learning for operators. flexible and adaptable mechanisms for including data encryption and signing

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 Process Control and Instrumentation
based on proven public-key cryptogra-
phy, user authentication and authoriza-
tion to provide data integrity and access
management, and audit logging to ensure
traceability of operations.
OPC data connectivity standards play
an important role in control automation
today, and will play an important role
in future IIoT- and Industry 4.0-based
solutions. This is acknowledged by an
in-depth ARC Advisory Group report
from 2018, which stated: “IIoT-enabled
edge devices embedded with OPC UA
are being leveraged as an ‘asset gateway.’
This can help organizations maximize
their return on assets (ROA) by helping
ensure that their automation investments
are scalable, future-proof, adhere to open
standards and integrate with existing as-
sets to avoid having to ‘rip-and-replace’
current automation infrastructure.”5 By
combining OPC UA with time-sensitive
networking (TSN) technologies speci-
fied by the IEEE, any cyclical and non-
temporal data transmissions can use the
same physical network.
For vendors, a certification program by
the OPC UA Foundation proves that cer-
tified products have been tested in an OPC
Foundation-accredited certification lab
and have met or exceeded requirements
related to compliance, interoperability,
robustness, usability and efficiency. The
benefits of using OPC UA-certified prod-
ucts include faster mobilization and con-
figuration, proven reliability and interop-
erability and minimal integration risks.
Using a certified product is an investment
in quality. Fulfilment of Industry 4.0 key
requirements gives investors the possibil-
ity of focusing on the business possibili-
ties presented by their investment.
Security. Especially when it comes to
protocols designed for industrial com-
munications, security has traditionally
been an afterthought, at best. In the era
of small networks enclosed in guarded
industrial facilities, this was a viable ap-
proach. However, the distributed nature
of modern industrial networks presents
new risks and attack surfaces that must be
considered in the development and man-
agement of solutions.
The seemingly trivial solution to miti-
gate these risks would be obfuscation
by using proprietary or custom-made
protocols, interfaces and security solu-
tions. While the “security by obscurity”
78 DECEMBER 2018 | HydrocarbonProcessing.com
approach is viable against unskilled and
opportunistic attackers relying on one-
size-fits-all attacks, it is ineffective against
targeted attacks by capable individuals and
organizations. Well-equipped attackers are
a serious threat, especially to organizations
operating in fields critical to functional na-
tion-states: energy, healthcare, water sup-
ply and food production, to name a few.
Following open standards and industry
best practices, applying proven security so-
lutions (e.g., proper encryption, strict ac-
cess and identity management, defense in
depth) and identifying the critical role of
security as a process in connected systems,
increase an organization’s chances of sur-
vival in the era of interconnected systems.
Industry 4.0-era production solu-
tions. The easiest and most cost-effective
way to implement and modernize opera-
tional process management is to transfer
the data wirelessly and directly to a cloud
service via Industry 4.0-standard OPC
UA communications. Instead of using un-
protected legacy communication proto-
cols across a wide area network (WAN),
such as internet, IIoT and edge solutions
offer more modern communication tech-
niques (such as MQTT, OPC UA, AMQP,
CoAP and TSN), designed for secure and
efficient network communications. These
technologies constitute a solid foundation
for ISA 95 Level 3 data communication.
One of the main business differentia-
tors presented in the Industry 4.0 initia-
tive is the horizontal integration across
company and business area borders. To
ensure collaborating parties’ trust in the
distributed system, it is essential that the
management and utilization processes of
the system are transparent. This enables
any stakeholder to verify both network
behaviors and utilization compliance with
given policies and contracts, and to audit
the behavior and security of the network.
A major obstacle in legacy systems
that prevents cross-organizational col-
laboration is the heterogeneity of devices,
networks and communication protocols.
Utilizing standardized data models and
communication protocols enables faster
and more predictable integration of dif-
ferent manufacturers’ devices. Open,
clearly defined technologies also increase
the transparency and verifiability of sys-
tems, and lower the threshold for starting
new collaborations or exploring new busi-
ness opportunities.
Modern communications, combined
with appropriate management processes,
enable the direct digitalization of opera-
tional management. From the edge and
the cloud, the data can flow to plant au-
tomation systems, enterprise resource
planning (ERP solutions, such as SAP),
or other relevant management systems
related to the use case. Central cloud con-
nection allows smooth operational shifts
between different plants, as operative fo-
cus can be moved where free capacity ex-
ists in the system when needed.
According to ARC, “It is crucial for the
industry to build modern analytics tools
and deploy data-enabled knowledge. Do-
ing so will drive new levels of efficiency
into upstream, midstream and down-
stream operations while addressing the
human skills gap.”6
Seamless production chain. Accurate
inventory in real time—i.e., exact tank
levels and line fills, with predictions of
future inventory—can be seen as part of
a wider production optimization context.
High-level production optimization can
benefit from the information provided by
plant-wide solutions, enabling the opti-
mization of product specification, energy
requirements or production costs.
Solutions packages from cutting-edge
providers form a new basis for the intelli-
gent operational level with existing histo-
rian data and IoT capabilities. In addition
to data collection, storage and analysis
capabilities, solutions are available for
plant-wide production optimization, op-
erator trainings with simulators and seri-
ous games, as well as advanced decision
support and flow dynamics simulation, to
name a few examples.
LITERATURE CITED
1
Chestney, N. and A. Doyle, World Economic Forum,
“Renewables grew twice as fast as fossil fuels in
2017,” April 6, 2018.
2
“Biofuels for traffic,” Petroleum and Biofuels
Association Finland, online: http://www.oil.fi/en/
traffic/biofuels-traffic
3
Batra, G., A. Queirolo and N. Santhanam, “Artificial
intelligence: The time to act is now,” McKinsey &
Co., Advanced Electronics, January 2018.
4
OPC Foundation, “Unified Architecture,” online:
https://opcfoundation.org/about/opc-technolo-
gies/opc-ua/
5
Resnick, C. and D. Clayton, “OPC technology well-
positioned for further growth in tomorrow’s con-
nected world,” January 10, 2018, online: https://
opcfoundation.org/wp-content/uploads/2018/02/
ARC-Report-OPC-Installed-Base-Insights.pdf
6
Guilfoyle, W., “Building effective analytics for oil and
gas,” ARC Advisory Group, June 1, 2018.