Applying Life Cycle Costing to the Development of a Pump Strategy
Scott Warren, P.Eng, Agrium Inc.
Richard H. Olver, CMRP, P.Eng, Agrium Inc.
Abstract
Pump availability and process flexibility is essential for
potash operations in order to meet the plant availability
targets. Because of reliability issues with pumps in many
potash services, and the impact of failures on production it
is common to have an installed spare pump. For the
planned Vault expansion at Vanscoy Potash Operations
(VPO), a detailed analysis has been completed to ensure the
plant is designed with the optimal arrangement of duty and
spare pumps. The analysis has included:
• Review of the pump process turndown
requirements
• Reliability Availability and Maintainability
(RAM) analysis, based on the Vault flow sheet
and a variety of configurations including 1-duty
1-spare, 2-duty, 2-duty 1-spare, 3-duty
• Detailed Life Cycle Cost (LCC) analysis on the
various pumping configurations
Introduction
The Vault expansion project could be the last major
expansion at Vanscoy Potash Operations (VPO). It will
take the capacity of the mine from 2.05 million tonnes per
annum (Mt/a) to the sustainable limit of 2.8 Mt/a with a
peak operating capacity of 3.0 Mt/a. During this expansion
the crushing and wet milling sections are being upgraded,
with 18 pump sets being incorporated into the design. All
of the 12 existing pump sets will either be eliminated or
modified.
Process Turndown Requirements
For process turndown, all pump sets in the expansion are to
be designed to have the capability of operating between
50% and 110% of nominal flow. The low end (50% of
nominal flow) is required to allow the mill to run at half
side rates since most sub-areas have equipment designed in
parallel with either 2 or 3 sets. This design allows
equipment to be taken down for maintenance without the
entire plant having to be shutdown. The high end (110% of
nominal flow) is required to ramp up when feed grade is
lower to process the required finished tonnes.
The majority of the pumps installed in the expansion are
slurry pumps, with a varying density requirements,
depending on the process. There are 10 the pumping
systems that the process dictates to be designed with a
minimum of two pumps due to the flotation density
requirements, and coarse material line settling issues, or
specifically volume related on some of the fine product
systems. The remainder of the 8 pumping systems have no
process limitations dictating the number of pumps.
Design Guidelines
Prior to the life cycle cost analysis being started, the
following pumping system design guidelines were
established:
1. Dedicated lines are to be installed on all
operating pumps
2. Variable frequency drives are to be installed on
all pumps
3. Pump requirements:
a. Must be able to meet peak tonnage
flows
b. Nominal operating range to be
designed between 85% and 95% of
Best Efficiency Point (BEP)
c. Minimum operating point to be
designed at no less than 65% of BEP
d. Max peak or rated point to be designed
at no more than 105% of BEP
4. Minimize the number of pump and motor sizes
with the constraints of the pumping requirements
5. All motors should be 700HP or less
6. Motors over 300HP are to be 4160 volt
Failure Types
All failures in this analysis were classified as either
functional or non-functional, since maintenance strategies
are different for each failure type. Failures can be broken
into these two categories because a majority of them are
typically caught with condition monitoring and daily
operator routes using handhelds, prior to equipment failure.
The following are the two types of failure used in this
analysis:
• Not Functionally Failed (NFF) – The failure has
been identified through condition monitoring or
operator rounds and the pump is still capable of
meeting production requirements. For these
failures the maintenance can be planned and
scheduled reducing the impact on production.
• Functionally Failed (FF) – The failure is not
caught with condition monitoring, resulting in an
immediate shutdown of the pump. For these
failures the daily and weekly schedules are
broken into to perform the maintenance required
to return the pump to an operational state.
Pump Configurations Considered
1. Two duty pumps and no spare pumps
• Each pump is to be installed with separate lines
and sized to 75% of the nominal flow.
• Not Functional failure scenario:
o Work is scheduled when a functional
failure is imminent or when parts and
maintenance crews are available.
 o Production rates will be reduced to
75% while the repair is taking place.
Other maintenance requiring a reduced
outage can be scheduled reducing the
impact of the outage.
• Functional failure scenario:
o If the failure occurs on the off-shift,
maintenance personnel are called out to
repair the failure with a longer outage
compared to a planned and scheduled
outage.
o If the failure occurs during the day
shift, the daily schedule is broken into
to repair the failure.
o Production rates will be reduced to
75% until the repair is completed.
Since the outage is unscheduled,
minimal other maintenance will occur
at the same time as this maintenance.
2. One duty pump and one spare pump
• Each pump is to be installed with separate lines
and sized to 100% of the nominal flow.
• Not Functional failure scenario:
o Work is scheduled when a functional
failure is imminent or when parts and
maintenance crews are available.
o Production rates will be reduced to
75% for ½ hour while pumps are being
switched and production rates will
return to full rates after the pump
switching has successfully occurred.
This production loss is to account for
the potential production upset when
pumps are being switched. If the stand-
by pump fails during start-up, the duty
pump will be put back in service until
the stand-by pump is repaired.
• Functional failure scenario:
o If the failure occurs on the off-shift,
maintenance personnel are not called
out to repair the failure unless the
stand-by pump does not start.
o If the failure occurs during the day
shift, the weekly schedule is broken
into to repair the failure.
o Production loss would be 100% until
the stand-by pump has started. Based
on interviews with operations personnel
it usually takes 1 hour to start the stand-
by pump, but can take as little as 15
minutes or as long as 6 hours if the
stand-by pump has a failure while
starting. For this analysis it was
assumed that on average a 2 hour
outage will occur when attempting to
start the stand-by pump at a functional
failure of the duty pump.
3. Three duty pumps and no spare pumps
• Each pump is to be installed with a separate line
and size to 50% of the nominal flow.
• Not Functional failure scenario:
o Work is scheduled when functional
failure is imminent or when parts and
maintenance crews are available.
o No production loss when taking one
pump out of service for maintenance.
• Functional failure scenario:
o If the failure occurs on the off-shift,
maintenance personnel are not called
out.
o If the failure occurs during the day
shift, the weekly schedule is broken
into to repair the failure.
o There is no production loss when
taking one of the duty pumps out of
service for maintenance.
o If two pumps fail at the same time
production will be reduced 50% until
one on the failed pumps are repaired.
4. Two duty pumps and one spare pump
• The two duty pumps are installed with a separate
lines and the spare pump is designed to pump
into either line. All three pumps are sized to
pump 50% of the nominal flow.
• Not Functional failure scenario:
o Work is scheduled when a functional
failure is imminent or when parts or
maintenance crews are available.
o Production rates will be reduced to
75% for ½ hour while pumps are being
switched and production rates will be
returned to full rates after the pump
switching has successfully occurred
• Functional failure scenario:
o If the failure occurs on the off-shift,
maintenance personnel are not called
out to repair the failure unless the
stand-by pump does not start.
o If the failure occurs during the day
shift, the weekly schedule is broken
into to repair the failure.
o Production will be reduced to 50% until
the stand-by pump is started using
similar pump starting assumption times
as in the one duty pump and one stare
pump functional failure case.
Information used in the Pump Life Cycle
Cost analysis:
1. Capital costs were based on a class 5 costs estimate
completed by engineering consultants on the
expansion project.
2. Maintenance costs resulting from failures were
broken in to 5 types - belt failure, packing failure,
pump failure resulting in pump needing to be replaced,
motor failure and instrument failure. As mentioned
above the failure types were broken into functional
and non-functional failures since maintenance
 strategies will be different for the two types of
failures.
• Mean Time Between Failure (MTBF) was
determine using historical SAP data from existing
pumps (61071/61480, 61437/61438 and
61474/61745) from January 2005 till December
2008 and modified assuming that the MTBF will
increase with the pump system design
improvements planned on Vault.
o Belt failure – calculated MTBF = 2.3
years; MTBF used = 4 years
o Packing failure – calculated MTBF = 9
months; MTBF used = 1.5 years
o Pump Replacement – calculated MTBF
= 1 year; MTBF used = 2 years
o Motor failure – Calculated MTBF = 8
years, MTBF used = 8 years
o Instrument Failure – Calculated MTBF
= 4 years, MTBF used = 4 years
• Repair costs were determined using existing
SAP data from existing pumps (61071/61480,
61437/61438 and 61474/61745) and factored for
the size of the pump. Repair costs were
calculated using the material costs for the repair
and the labor costs calculated from the
maintenance repair time.
• Repair time was determined using SAP data
from existing pumps (61071/61480, 61437/61438
and 61474/61745) and information provided from
maintenance planners Bryan Busby and Gerald
Fehr. The repair time was factored for the size of
pump (longer repair time to replace a 6X4 pump
compared to a 12X10 pump), failure type (non-
functional failures were treated as planned work
orders and functional failures were treated as
non-planned or emergency work orders) and
production consequence (if a failure resulted in
Life Cycle Analysis Results
20 Year Life Cycle Cost
Number of
Pump Sets 2 Duty
8 $44,029,167
18 $115,700,469
Capital Cost
Number of
Pump Sets 2 Duty
8 $8,990,567
18 $21,105,019
Sensitivity analysis
Pump set #5 (Secondary Deslimes Cyclone Feed Pumps)
was used to perform a sensitivity analysis to determine the
effect of the calculated MTBF rates compared to the
lost production, tradespersons would be called in
and repair would be done on overtime).
3. Predictive/Preventative Maintenance Costs were
calculated with information provided by the
Reliability Supervisor Huw Morris and factored for
the number of operating pumps.
4. Stocked spares costs were not included in the
analysis because it was unknown how many pump sets
would require the different types of stocked spare
parts and when factored over the number of pump sets
would not make a significant change in the results.
5. Energy costs were calculated using the calculated HP
required and the pump efficiency for the type of pump.
The pump efficiency was factored for the type of
pump, since the larger the pump the more efficient it
was. Another factors is where the system curve would
sit on the pump curve. On 2 duty and 3 duty options
the flow rate range was wider than for the options with
a stand-by pump, and thus the normal operating point
was lower in the pump curve.
6. Lost production was based on the MTBF, repair time,
failure type and consequences of failure. Using these
factors the equivalent hours of annual down time was
calculated. The consequences of failure were the key
assumption which varied for the various pump options
as discussed above.
7. Operator costs were based on information provided
by Operations Superintendent Brad Lefebvre and
factored for the number of operating duty and stand-by
spare pumps. It was assumed that an operator would
spend 10 minutes per shift on an operating a duty
pump and 5 minutes per shift on a stand-by pump.
1 Duty 2 Duty
1 Standby 3 Duty 1 Standby
$25,431,147 $21,242,565 $21,016,015
N/A N/A $62,205,406
1 Duty 2 Duty
1 Standby 3 Duty 1 Standby
$13,266,252 $8,517,325 $8,167,725
N/A N/A $21,257,565
assumed MTBF values resulting from improved design. As
shown by the data below the there is little difference on the
overall 20 year LCC when comparing the actual MTBF
data and the improved MTBF data used for the analysis.
For each case the 2 duty 1 spare had the lowest LCC data and 21% higher LCC with the improved reliability
followed by the 3 duty case (2% higher LCC). Next in line data) leaving the 2 duty case with the highest LCC.
was the 1 duty 1 spare case (27% higher LCC with actual

1 Duty 2 Duty
Option # 2 Duty 1 Spare 3 Duty 1 Spare
Capital Acquisition Costs $954,908 $1,752,288 $1,031,888 $983,888

20 Year - Life Cycle Costs

Using existing data $7,855,669 $4,587,107 $3,663,282 $3,602,623
Using improved reliability
data used for analysis $6,168,356 $4,134,153 $3,457,455 $3,396,958

Annual Maintenance Failure Costs

Using existing data $39,965 $25,973 $50,611 $33,741
Using improved reliability
data used for analysis $26,875 $17,514 $34,005 $22,670

Equivalent Annual Downtime (hrs)

Using existing data 6.52 1.5 0.24 0.49
Using improved reliability
data used for analysis 4.28 0.95 0.13 0.33
Annual Lost Production
Using existing data $589,232 $135,109 $21,283 $44,649
Using improved reliability
data used for analysis $386,639 $85,669 $11,579 $29,431
Maintenance Labor Requirements - Using Existing Data
Maint Regular Time (hrs) 102 84.5 144.9 96.6
Maint OT (hrs) 20.6 0.1 1.5 1.2
Maintenance Labor Requirements - Improved Reliability Data
Maint Regular Time (hrs) 65.6 54.6 93.8 62.5
Maint OT (hrs) 13.6 0.1 1 0.8

SUMMARY capable of pumping into the duty pump

Based on the detailed life cycle costs analysis it is
recommended that the standard for pump installation will
be:
• For critical process service subject to process
turndown
o Two duty pumps each sized for 50% of
full production with independent lines
o One spare pump sized for 50% of full
production installed with valves to be
capable of pumping into the line for
either duty pump
• For non-critical process service not subject to
process turndown
o One duty pump sized for full
production
o One spare pump sized for full
production installed with valves to be
line
The primary drivers of the two duty one spare pump
philosophy are:
1. Lowest Life Cycle Cost with the factors that impacted
the two duty one spare:
• Plant Equivalent Availability (total production
loss from downtime and reduced rates): this
configuration maximized the availability of the
plant compared to the other configurations.
• Capital cost: although there were variations
depending on the exact pump set, overall this
configuration has the lowest capital cost across
the comparable sets. When compared just with
the 2 duty pump configuration they were virtually
identical. A determiner in the overall comparison
was most sets in the two duty one spare will only
require 600 volt variable speed drives whereas
the one duty one spare configuration requires a
 4160 volt variable speed drive, which is
substantially more expensive.

2. Process Turndown Capability: this configuration with

the variable speed drives provides the required
turndown capability, up to 50% is required.
Applying Life Cycle Costing
to The Development of a
Pump Strategy
By,
Scott Warren, P.Eng,
Richard H. Olver, CMRP, P.Eng

Track 1 - Business and Management

1
 Agrium Overview
• Agrium is a major producer and marketer of fertilizers,
plant nutrients, related products and services
• Our Corporate office is in Calgary, Alberta
• Our Market is the WORLD
• Agrium trades on the Toronto and New York stock
exchanges under the symbol AGU
• In 2008, the Company’s annual sales were over US $10
billion
• Structured around three Strategic Business Units, plus
our Corporate office:
– Wholesale
– Retail
growing across the value chain
– Specialty Products
Agrium History

growing across the value chain

 Balanced Growth Across the
Value Chain
Agrium
Wholesale: Retail Customers Industrial
$4.7-billion sales customer
Nitrogen, Potash,
Distribution
Phosphate & Sulphate & Storage
Agrium Retail: Distribution
Growers
$5.5-billion sales* & Storage
Purchase for Resale

Advanced Growers
Technologies:
Leader in Specialty
Fertilizers
Turf,
$350-million sales
Home,
Garden

Potash expansion Royster, ConAgra,

CMF distribution ADM retail, and Hanfeng, Pursell,
MOPCO investment UAP NuGro, ESN

growing across the value chain

*Includes UAP contributions from May 2008
 VAULT - Vanscoy
Expansion Project

• Increase the capacity of the mine from

2.05 (Mt/a) to 2.8 Mt/a sustainable and
peak of 3.0 Mt/a
• Major changes in the upgrade to crushing
and wet milling sections of the Mill
• 18 pump sets to be modified or installed in
the design
 Process Considerations In
Pump Selection
• Pumps sets must be designed to operate from 50% to
110% of nominal flow
• 50% of nominal flow is required to allow the mill to run at
half side rates
• 110% of nominal flow is required to ramp up when feed
grade is lower
• Majority of the pumps installed are in slurry service
• In 10 of the pumping systems the process dictates that a
minimum of two duty pumps be installed
 Design Guidelines

1. Dedicated lines for every installed operating pump

2. All pumps on variable frequency drives
3. Pump Requirement
– Must be able to meet peak tonnage flows
– Nominal operating range to be designed at 85% - 95% of Best
Efficiency Point (BEP)
– Minimum operating point to be designed at no less than 65%
of BEP
– Max Peak / Rated Point no more than 105% of BEP
4. Minimize the number of pump and motor sizes with the
constraints of the pumping requirements
5. Preference to have motors 700HP or less
6. Generally have motors over 300HP as 4160 volt
 Failure Types

• Not Functionally Failed (NFF) - It has been

identified through condition monitoring or
operator rounds that the pumping system is
failing and there is time to schedule a pump
shutdown to make repairs the equipment.
• Functionally Failed (FF) – A component in the
pumping system has failed and an immediate
shutdown of the pump is required to repair the
equipment.
 Pump Configurations
Considered

1. Two duty pumps and no spare pumps

2. One duty pump and one spare pump
3. Three duty pumps and no spare pumps
4. Two duty pumps and one spare pump
 Information used in Pump
Life Cycle Cost Analysis
Capital cost – Based on a class 5 costs estimate
Maintenance Costs resulting from failures. The failures were
broken in to 5 types - Belt failure, packing failure, pump failure
resulting in pump needing to be replaced, motor failure and
instrument failure.
Predictive/Preventative Maintenance Costs
Stocked spares costs – These costs were not included in the analysis
because it was unknown how many pump sets would require the
different types of stocked spare parts and when factored this would
not make a significant change in the results.
Energy costs – Energy costs were calculated using the calculated HP
required and the pump efficiency
Lost Production – Based on the MTBF, repair time, failure type and
consequences of failure the equivalent hours of annual down time
was calculated.
Operator Costs – Based on information provided Operations
Superintendent
 Life Cycle Analysis Results
20 Year Life Cycle Cost
Number of 1 Duty 2 Duty
Pump Sets 2 Duty 1 Standby 3 Duty 1 Standby
8 $44,029,167 $25,431,147 $21,242,565 $21,016,015
18 $115,700,469 N/A N/A $62,205,406

Capital Cost
Number of 1 Duty 2 Duty
Pump Sets 2 Duty 1 Standby 3 Duty 1 Standby
8 $8,990,567 $13,266,252 $8,517,325 $8,167,725
18 $21,105,019 N/A N/A $21,257,565
 Summary the Pumping
Strategy

• For critical process service subject to

process turndown
– Two duty pumps each sized for half of full
production with independent lines
– One spare pump sized for half of full
production installed with valves to be capable
of pumping into the line for either duty pump
 Primary Drivers of the
Pumping Strategy

1. Lowest Life Cycle Cost, the major factors

were:
• Plant Equivalent Availability from the RAM
model
• Capital cost
2. Process Turndown Capability
Questions