Taking It To The Next Level:Capturing “Missed” OpportunitiesBill Schlesing, Principal Consultant      12 December 2012    ...
Agenda> What Roadblocks keep us from “Taking it to the Next  Level?”> Why Push? What is the Incentive?> Selected Case Stud...
What Roadblocks keep us from “Taking it tothe Next Level?”> Time is the number one challenge most of us face – the lack of...
Why Push? What is the Incentive?> Competition    – Maintaining the status quo (standing still), in reality is falling behi...
Case Studies – Desalter Cold Eyes Review>   Situation     –   Several large refineries in Americas                        ...
Case Studies – Hydrocracker Cold EyesReview>   Situation     –   A major USGC Refiner was having operability and reliabili...
Case Studies – Asphalt Cold Eyes Review> Situation    – Asphalt production is as much art as science. KBC has developed to...
Case Studies – Middle Eastern NEC PIP>   Client Situation     –   A Middle Eastern National Energy Company (NEC) asked for...
Operational Planning - General> Range of Benefits from Planning & Supply Chain Upgrade: – Reduction in feedstock costs – I...
Breaking through the Barriers>   Time     –     Get past the excuse that “we don’t need anyone because we know how to do i...
Conclusions> One size does not fit all, do what makes sense for your  particular challenge> Just because that’s the way yo...
Closing> Contact: Bill Schlesing, Principal Consultant,  WSchlesing@kbcat.com> Questions?> Future webinar topics:   –   Ma...
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KBC IoE Webinar - Capturing Missed Opportunities

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Assets can always be taken to the next level no matter their current status. However, there are roadblocks to consider that make it difficult to fully realise the capabilities of the assets we manage. In this webinar, the overview of roadblocks will be followed by a discussion of the incentive for change/potential opportunities and approaches to take it to the next level.

This free 45-minute webinar covers:
- What roadblocks keep us from taking it to the next level?
- Why push? What is the incentive?
- Breaking through barriers
- Selected case studies

Bill is a Principal Consultant with KBC with over 32 years experience within the refining and petrochemical industries; 24 years have been in manufacturing operations. He has significant experience in management of: Business Strategy, Operations, Maintenance, Safety, Engineering, Tech Support, Human Resources, Administration, Business Development, Planning and Economics, and Commercial Activities & Markets. Bill is also on the Oil & Gas Journal Editorial Advisory Board and the PennEnergy Research Advisory Board.

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KBC IoE Webinar - Capturing Missed Opportunities

  1. 1. Taking It To The Next Level:Capturing “Missed” OpportunitiesBill Schlesing, Principal Consultant 12 December 2012 © 2012 KBC Advanced Technologies plc. All Rights Reserved.
  2. 2. Agenda> What Roadblocks keep us from “Taking it to the Next Level?”> Why Push? What is the Incentive?> Selected Case Studies> Breaking through the Barriers> Conclusions 12 December 2012 PROPRIETARY INFORMATION 2
  3. 3. What Roadblocks keep us from “Taking it tothe Next Level?”> Time is the number one challenge most of us face – the lack of – It’s not that we cannot address the issue ourselves, rather we have many other competing calls for our time> Resources – We don’t have the people OR we don’t have the right people available when needed> Tools – We don’t have the right tools or in some cases, the best tools> Core Capabilities – We don’t do it all the time and are not fully comfortable with it> Expertise – We don’t do it at all and/or don’t realize we need it> All of the above – It’s complicated, it’s a lot of work, it’s hard to value, etc.> Excuses or “Reasons Not to Do It” – We Often have These! – We’re doing well, we don’t need to do it – We’ve looked at that before (but how long ago and how deeply?) 12 December 2012 PROPRIETARY INFORMATION 3
  4. 4. Why Push? What is the Incentive?> Competition – Maintaining the status quo (standing still), in reality is falling behind> Regulatory – Often we push it off to avoid resource or capital commitments today; in some cases hoping it will either change or go away. Sometimes this works and sometimes we hold off too long and end up with a sub-optimal answer that costs much more. – Done right, we may be able to capture process improvement synergies> New perspectives and paradigm shifts – Sometimes a fresh look brings in an approach we had not considered and/or breaks a logjam we had not been able to get past> Resource Loading – Addressing critical priorities, without sacrificing key opportunities – Maintaining momentum and avoidance of restart inefficiencies> Validation – Sometimes an “honest broker” is required to allow an initiative or project to progress> How much might it be worth in tangible terms? It depends – 10 – 30 cents/bbl in a refinery (4 – 11 Million USD/annum for 100K BPD) – 8 – 16 USD/ton of ethylene or aromatics (USD 1.07 – 2.13 per barrel) 12 December 2012 PROPRIETARY INFORMATION 4
  5. 5. Case Studies – Desalter Cold Eyes Review> Situation – Several large refineries in Americas CER, Cold Eyes Review experiencing desalter operational problems resulting from: Technology GAP • Changing crude quality • Increasing operational demands to prevent Operating GAP downstream corrosion KBC Benchmark – Specific client experiencing poorer than Current anticipated performance inlet Desalter outlet> Identification and Evaluation m u d w a s h – Single Stage Performance in 92-93% range – benchmarked at average to low side of performance curve depending upon crude quality and desalter design – Performance trended with API of crudes processed, with higher API crudes performing better. This skewed the average and masked true performance. – Removing the higher API crudes showed two gaps which could be addressed via operational improvements (low CAPEX) or conversion to two stage operation - technology (high CAPEX)> Recommendations – Path forward list was generated for zero, low and high CAPEX options – List included 11 major areas with 33 sub-areas which were subsequently prioritized for implementation resulting in significantly improved operations 12 December 2012 PROPRIETARY INFORMATION 5
  6. 6. Case Studies – Hydrocracker Cold EyesReview> Situation – A major USGC Refiner was having operability and reliability problems with a hydrocracker compressor. Plant personnel had identified many possible scenarios regarding performance but the root cause of compressor High Purity outages was not obvious. MUG H2> Identification and Evaluation – A refinery team was established with KBC as a member. Low Purity MUG – Utilizing the Cold Eyes Review (CER) approach, potential causes were H2 Design MW identified, narrowed and an action plan developed. – With older units, increases in hydrogen purity while desirable, can lead to compressor performance problems associated with recycle gas molecular weight (MW) decreasing below design. The result is reduced capacity to avoid surge. – Two common solutions are: • Change the rotor – high CAPEX and operationally challenging requiring a turnaround • Add tempering gas to increase MW, avoid surge, and maintain capacity> Recommendations Speed – The hydrocracker (including the compressor) was modeled in Petro-Sim™ to understand impact of the make-up hydrogen on performance. Based on the model output, the optimum tempering gas composition was determined for best system performance. – The compressor is now operating well and is meeting reliability targets. 12 December 2012 PROPRIETARY INFORMATION 6
  7. 7. Case Studies – Asphalt Cold Eyes Review> Situation – Asphalt production is as much art as science. KBC has developed tools and methodology to predict asphalt viscosity/penetration and the Performance Grade (PG) specifications. – Two refineries were exploring ways to improve their asphalt blending and engaged KBC to identify opportunities utilizing the CER approach> Identification and Evaluation – Refinery operations were reviewed from crude selection to blow still operation to final blend recipes. – A Petro-Sim™ model of the facility was developed to aid in crude selection and develop operational responses to crude quality shifts. Crude tower performance, blow still operation, and polymer blending were also evaluated using the model.> Recommendations – Base operations and novel alternatives were evaluated and a list of 40 ideas were generated for the path forward – Improved refinery asphalt operations were the end result 12 December 2012 PROPRIETARY INFORMATION 7
  8. 8. Case Studies – Middle Eastern NEC PIP> Client Situation – A Middle Eastern National Energy Company (NEC) asked for a Profit Improvement Program to include the generation, implementation and sustainment of opportunities to improve the bottom line performance of a refinery at no or minor capital cost.> Procedures Performed – Tools - Created a refinery-wide simulation model in Petro-SIM™ to evaluate economic viability of opportunities – Unit monitoring tools, including Profit Tracker, were set up to track KPIs and progress of all opportunities – Training was provided to engineers in the use of the tracker and simulation models – Profit awareness culture and improved communication between departments was fostered in the refinery staff by leveraging KBC’s expertise in the form of tools, methodologies and best practices – Operating practices/targets - Kerosene production was maximized by increasing stripping steam in the side stripper and reducing top temperature in the crude tower> Outcomes – Total annual benefit of the opportunities implemented was over US $80MM/year (or 42 c/bbl) – Increased kerosene production by 7MBD at the expense of lower valued naphtha exports, resulting in net benefit of US $7MM/year – Targets from refinery-wide Petro-SIM™ model were incorporated into the plant’s MVC system to help implement and sustain the kerosene opportunity – By running both normal and spare pumps, a record-high level of kerosene was produced 12 December 2012 PROPRIETARY INFORMATION 8
  9. 9. Operational Planning - General> Range of Benefits from Planning & Supply Chain Upgrade: – Reduction in feedstock costs – Increased product value realization – Lower inventories – Maximized asset utilization – Improved trading performance – Lower shipping/distribution costs – Improved market responsiveness – Value capture potential • Refining 10-30 ¢/bbl (75¢ - $2.25/ton) • Petchem 8-16USD/ton ($1.07 - $2.13/bbl) 12 December 2012 PROPRIETARY INFORMATION 9
  10. 10. Breaking through the Barriers> Time – Get past the excuse that “we don’t need anyone because we know how to do it” and honestly ask – “so when are we going to get it done if we don’t re-prioritize or get outside help?”> Resources – Treat initiatives in the same way you approach routine maintenance and project manpower. Identify the base load needs and staff/resource accordingly. Incremental workload should be outsourced to avoid low resource utilization. – If the resources are needed now but require a major disruption in the organization (e.g. maintenance schedule breakers) is moving your own people around the best answer?> Tools – Determine whether you can justify adding the tools yourself - and further, are you committed to maintaining the knowledge base to use the tools and the manpower to keep them updated?> Expertise – Determine if you: • A) currently have the necessary expertise or if not • B) have the critical mass in terms of needs to justify developing and maintaining the expertise?> Core Capabilities – Determine what are your core capabilities and focus on those areas to be the best. All other areas, consider utilizing the skills and tools of others where they can provide as good or better end results at lower cost> Getting Past the “Excuses” – Be honest and ask yourself, just because we are doing well, do we believe we can’t do better? – Don’t forget that what is true today may not be true tomorrow – how many expected shale gas and shale oil to have the impact they are having today and not 10 years from now? 12 December 2012 PROPRIETARY INFORMATION 10
  11. 11. Conclusions> One size does not fit all, do what makes sense for your particular challenge> Just because that’s the way you’ve always done it, is not the only justification for continuing down the same road> Fresh Perspectives: – Bring new ideas and approaches which may add additional value – Sometimes break the logjam on a difficult problem – Can be the missing link in a collaborative effort – Can provide validation> When we get caught up in the details for any of a variety of reasons, a third party may be the fresh objective approach we need 12 December 2012 PROPRIETARY INFORMATION 11
  12. 12. Closing> Contact: Bill Schlesing, Principal Consultant, WSchlesing@kbcat.com> Questions?> Future webinar topics: – Market conditions – Asset optimization – Investment support – Sustainable workforce development> We welcome suggestions for future topics – please email kbc-marketing@kbcat.com> Thank you for joining us! 12 December 2012 PROPRIETARY INFORMATION 12
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