SimSci Simulation for Business Excellence. Schneider Electric confidential.

Industry Update
and Challenges

John Derbyshire
President, Technology & Consulting
KBR
2015 SimSci Conference…..

Laguna Beach, CA ?
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2015 SimSci Conference….

Santa Monica, CA ?
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2015 SimSci Conference….

A Nice Hotel
Downtown,,,
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2015 SimSci Conference…..

Pasadena, (Texas) !!???

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Topics
● Industry Challenges

● EPCs addressing challenges

● Applications of Simulations tools

● Opportunity Areas

● Road Ahead

SimSci Simulation for Business Excellence. Schneider Electric confidential.

 Industry Challenges

● The BAD News ● Some GOOD News

● Low oil price, low gas price, low LNG price ● Lower gas and large condensate production
● Dramatic reduction in Upstream spending especially in continues driving North America LNG and
US Gulf Coast ultra deepwater petrochemical investments
● Sanctions on Russia - a restriction on access to ● Lower gas prices driving North America
capital/ frontier technology for projects fertilizer investments
● Security situations in Iraq and Libya ● Middle-East shifting from gas to liquids for
● Brazil political scandal petrochemical production
● Nuclear start in Japan hurting global LNG demand
SimSci Simulation for Business Excellence. Schneider Electric confidential.
Global Oil Supply Economics

Decline in high cost production –
oil sands, ultra/harsh deep water,
Arctic, some U.S. shale

At low oil price (below $60/bbl),

developments will be mainly in
onshore, shallow, some deepwater
& brownfield:
o Middle East
o Africa
o Caspian
o US Shale
o North Sea
o Mexico, Brazil, Colombia
o APAC - some

SimSci Simulation for Business Excellence. Schneider Electric confidential.

Big Oil Reducing CAPEX
● Impact of Depressed Oil Market
Capital Expenditure for the largest Companies

Big Oil trying to

maintain 2014
production levels
from existing
assets under
reduced capital
budget
Source: OGJ, Moody’s Investor Services

SimSci Simulation for Business Excellence. Schneider Electric confidential.

Regions/NOCs reducing CAPEX
● Impact of Depressed Oil Market
Investment spend Q4 2014 to Q3 2015 (%)

Only Middle East

saying they intend
to increase
CAPEX in FY16

Source: FT, Wood Mackenzie

SimSci Simulation for Business Excellence. Schneider Electric confidential.

 Upstream Specific Cutbacks
● Impact of Depressed Oil Market
Expectations on where oil cuts will be made
Cost cuts, 2014 to 2015 (% change)

Significant
Reductions in
Unconventional,
Ultra and
Deepwater
drilling
Source: FT, Wood Mackenzie

SimSci Simulation for Business Excellence. Schneider Electric confidential.

Impact on general economy

HIGHER OIL PRICE LOWER OIL PRICE

● Relatively fast moving ● Nominally higher GDP growth
● Consumer spending cuts ● Economic activity is somewhat
● Lower GDP Growth offset by adjustment costs
● Higher inflation ● Much slower moving than high oil
price impact
SimSci Simulation for Business Excellence. Schneider Electric confidential.
KBR
● KBR, Inc. is a global technology, engineering, procurement and construction company
serving the hydrocarbons and government services industries.
● More than 100 year history
● 25,000 employees in more than 45 countries.
● Customers in more than 70 countries

SimSci Simulation for Business Excellence. Schneider Electric confidential.

KBR Technology and Consulting Business
Broad Range of Technologies and Solutions from Wellhead to
Specialty Chemicals
Downstream
Proprietary Upstream Refining (VCC, ROSE, FCC, Hydroprocessing, Distillation)
Semi-submersible hull design Olefins (SCORE, K-COT)
Technologies Monohull vessels Ammonia (KRES, KAAP, Purifier)
Chemicals (Phenol, BPA, Acetic Acid, PVC, specialty technologies)
Coal Gasification

Upstream Downstream
Consulting Field development planning Downstream consulting
Project assurance Feasibility and revamp studies
and Services Integrity management Technical services
Structural analysis Automation consulting and project management

SimSci Simulation for Business Excellence. Schneider Electric confidential.

Technology and Consulting Business Trend
● Upstream
● High Growth in last 5 years driven by US
Deepwater, Brazil, West Africa discoveries
● Drop-off in new projects as oil prices began
falling in 2014
● Focus on extending life and brownfield
expansions, tie-backs etc.
● Downstream
● High Growth in last 5 years driven by China,
Middle East, South East Asia and Russia
● Growth in grass roots project slowing in
2015 and expected to continue in 2016
● Revamping processes to focus on
efficiency & reduced OPEX

SimSci Simulation for Business Excellence. Schneider Electric confidential.

Work Flow - Conceptual Design to
Continued Operations
Conceptual Basic Detailed Commissioning
Engineering Engineering / Start-up Operations Revamping
Design

● Simulation and design data flow from concept and design to operation to
revamping
● Rapid concept to design development , collaboration and 2D/3D
visualization
● Dynamic generation of milestone based deliverables with versioning
● Seamless and integrated engineering work process
● Efficient and gradual handover – EPC to Operations
● Extending life and improving profitability through cost-effective revamping

SimSci Simulation for Business Excellence. Schneider Electric confidential.

KBR Use of SimSci and Aveva Tools
● Steady State Process Simulator – PRO/II
● License & Basic Engineering Design packages
for new plants
● Plant data performance analysis / revamping
and plant expansions
● Dynamic Process Simulator – Dynsim
● Design and control verification
● Depressuring studies
● Performance Monitoring & Offline Optimization –
ROMEO
● Plant data validation and performance analysis
● Parameter estimation
● Heat & material balance
● 3D Plant Design – Aveva PDMS™

● Evaluating operations management tools

SimSci Simulation for Business Excellence. Schneider Electric confidential.
KBR Use of SimSci and Aveva Tools
● Steady State Process Simulator – PRO/II
● License & Basic Engineering Design packages
for new plants
● Plant data performance
analysis / revamping and plant
expansions
● Dynamic Process Simulator – Dynsim
● Design and control verification
● Depressuring studies
● Performance Monitoring & Offline Optimization –
ROMEO
● Plant data validation and performance analysis
● Parameter estimation
● Heat & material balance
● 3D Plant Design – Aveva PDMS™
● Evaluating operations management tools

SimSci Simulation for Business Excellence. Schneider Electric confidential.

Modeling Considerations in Revamps
● Design Accuracy
● In revamping projects KBR
performs detailed calibration of
its simulation models to
operating data to ensure
accuracy of revamp analysis
●Calibrated model reflects
actual equipment
performance, e.g.
compressor head/efficiency
offsets, tray efficiencies
●Calibration is especially
important for small %
capacity increase
SimSci Simulation for Business Excellence. Schneider Electric confidential.
Modeling Considerations in Revamp
●Execution Efficiency
● KBR uses Excel/VBA-based automated data
extraction tools that interfaces with process
simulation model to:
●Quickly generate high-level material
balances for complex processes (like
olefins) for multiple feed cases, etc.
●Extract model variables for fast model
validation, enable quick repeated
comparison of model vs. plant variables
●Extract data to facilitate quick equipment
rating – iterative approach between
model/rating to minimize scope
●Generate detailed material balances and
process loadsheets – greatly improves
speed, consistency and accuracy
SimSci Simulation for Business Excellence. Schneider Electric confidential.
Modeling Considerations in Revamp
● Solution Innovation
● Use of process synthesis tools to
improve design
●Column targeting – help
identify opportunities for feed
conditioning, side
heater/cooler, spec
adjustments.
●Pinch analysis – identify
opportunities to improve heat
integration (reduce
energy/capital cost)
● Target solutions that reduce load
on high-capital items, e.g. avoid
compressor replacement through
improved heat integration

SimSci Simulation for Business Excellence. Schneider Electric confidential.

Good simulation tools speed revamp studies

● Automated data transfer from simulation to design tools

● Ease of extracting data from multiple simulations
● Ease of importing partial process simulation data
● Integrate with 3rd party software – equipment rating programs
● Intuitive user interfaces
● Flexible to adapt to iterative revamping work processes

SimSci Simulation for Business Excellence. Schneider Electric confidential.

Opportunity Area - SimSci and Aveva

● Process and Detailed Engineering do not speak the same language…..

● A Simulation Flow Diagram (SFD) is not a Process Flow Diagram (PFD)
● A PFD is not a Piping & Instrumentation Diagram (P&ID)
● A Unit Operation is Not a Piece of Equipment
● A Stream is Not a Pipe
● A Column Stage is Not a Tray or a Section of Packing
● Many operating “cases” for one piece of equipment
● Equipment types and plant topology change during Process Design

SimSci Simulation for Business Excellence. Schneider Electric confidential.

Aveva SimSci Challenges
●The land of lost engineering data integration promises……

SimSci Simulation for Business Excellence. Schneider Electric confidential.

 Aveva SimSci Opportunity
●Real-Life Problem
● EPC sold “duplicate” plant to customer
● Off-the-shelf design – client/EPC saves money
● But some ambient conditions different from
duplicate and some pipe specs changed, client
asked for several electric drives
● Technology group used new parameters
assuming changes would be minor
● Detailed Engineering Group did “Early-Works”
assuming exact duplication
● Project engineering assumed P&ID sessions
would resolve differences
● Resultant “re-alignment” cost additional 30,000
man-hours over estimate
Common database which managed work-flow / flagged misalignments
Could have save approx. $4 million
SimSci Simulation for Business Excellence. Schneider Electric confidential.
 Aveva SimSci Opportunity
The Holy Grail of Engineering Data Management

● Cost of Admission ● Cost of Ownership

● Time to get stakeholders aligned
● Time to create Company-specific document
templates (data sheets, reports, etc.)
● Time to enable handling of Company-specific
or proprietary equipment objects and
calculations
● Time to validate mapping from simulation data
to equipment data
● Time to package and deploy to the users
SimSci Simulation for Business Excellence. Schneider Electric confidential.
● Effort required to add additional equipment types,
documents, reports, etc.
● Effort and skills required to modify the system to handle
new objects or special situations
● Effort required to train new users and maintain existing
users
● Rapid response to project-specific issues is required to
minimize project impact
● Projects must be easily reusable as templates for future
projects
The Road Ahead
● Focus on CAPEX and OPEX efficiencies in
today’s volatile oil price situation

● Simulation tools strongly aid CAPEX and

OPEX optimization in today’s volatile market

● Key to business excellence will be changing

the workflow

● Model Driven Engineering

●What if we had one tool, instead of 3+, that
could be used throughout the plant lifecycle?
●What if we could have multiple engineers
work on the same model at the same time?
●What if we could access the simulation via the
cloud?
●What if we could use the simulation to drive
the process rather than have the process
drive the simulation model?

SimSci Simulation for Business Excellence. Schneider Electric confidential.

KBR Engineering - Enhancing Life

SimSci Simulation for Business Excellence. Schneider Electric confidential.

SimSci Conference 2016

Monte Carlo !!!

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 SimSci User Conference
Pasadena October 2015

Thank-You

SimSci Simulation for Business Excellence. Schneider Electric confidential.

SimSci Simulation for Business Excellence. Schneider Electric confidential.