Pemex Refining is implementing a best practices pipeline integrity management program for its 14,000 km pipeline system. It is using an asset management framework based on BSI PAS-55 standards and risk-based decision making. It has selected key processes to document and improve using Lean and Six Sigma. It is supporting the program with a web-based integrity management system to manage the asset lifecycle and risk-based activities.

1. NEW PRACTICES &
TECHNOLOGIES SUPPORTING
PIPELINE ASSET LIFE-CYCLE
MANAGEMENT

2. Overview of Integrity
Program
Monterrey
November 2009
Confidential

3. Program Overview
Program Scope
Pemex Refining is in the process
of implementing a best practices
multi-year integrity management
program for it’s more than
14,000 km of hazardous liquids
and crude oil pipelines

4. Program Overview
Objective
The purpose is to improve and
maintain the safe, reliable
operation of the pipeline system
through risk based management
and execution of integrity
activities
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5. Program Overview
Integrity Management System
The company decided to support
the program with a web-based,
GIS enabled technology called
Integrity Management System
(iMS)
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6. Program Overview
Industry Leading Best Practices
 BSI PAS-55 (Asset Management)
 LEAN (Process Management)
 Six Sigma (Quality Assurance)
 API 1160ASME B31.8S (IM)
 EPRA (WKM Risk Management)
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7. Program Overview
Benefits of Practices – Supports:
 Life-Cycle Management
 Risk Based Decision-Making
 Collaboration, Communication,
Sustainability, Improvement
 Scalability, Configurability
 Performance Management
(beyond prescriptive silo based
integrity management)
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8. Asset Management
Framework
Monterrey
November 2009
Confidential

9. Asset Management Framework
BSI PAS-55
Asset Management
Systematic & coordinated
activities and practices
through which an
organization optimally
manages its physical
assets and their associated
performance, risks and
expenditures over their life
cycles for the purpose of
achieving its organizational
strategic plan
Figure provided from PAS-55 and the Woodhouse Group
Confidential

10. Asset Management Framework
In a traditional organization it
is difficult to optimize asset
values across the business
A goal of AM is to then
provide a truly integrated,
optimized, risk-managed,
whole-life management of
the mix of physical, human,
intellectual, reputational,
financial and other assets
that uniquely comprises the
business
Figure provided from PAS-55 and the Woodhouse Group
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11. Asset Management Framework
Asset Management
 Organizational Strategic Plan
 Asset Management Policy
 Asset Management Strategy
 Asset Management Objectives
 Asset Management Plans:
Integrity Administration Plan
(PAI)
Figure provided from PAS-55 and the Woodhouse Group
Confidential

12. Asset Management Framework
Asset Management Incorporating Principals of
 "What is the optimal inspection or Risk Based Management
maintenance interval?“
 "What is the optimal implementation
sequence for a list of very dissimilar tasks or
projects?“
 "When is the optimal time to replace this
equipment?“
 "Is it worth holding a strategic spare, and if so,
how many?“
 "Which asset is best to purchase - the high
cost option with better performance and
longer potential life, or the cheaper but lower
performance/more uncertain option?“
 "What shutdowns are worthwhile, when?"
Figure provided from PAS-55 and the Woodhouse Group
Confidential

13. Asset Management Framework
Employing LEAN and Six
Sigma practices to improve
work-flow processes and
dataresults quality
assurance
LEAN Six Sigma
Process Focus Activity Focus
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14. Process Management
Process Management - Definition
 Aligning internal and external business process
performance and results with the core competencies,
strategic objectives, and business goals of the
organization
 Understanding and documenting business processes
so that they can be consistently executed
 Measuring, monitoring, and controlling process
performance including key inputs and outputs
 Actively designing and improving business processes
to meet or exceed the expectations of customers
while achieving organizational goals
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15. Process Management
When Combined, PAS-55, LEAN
and Six Sigma Support Optimized
Cross-Functional Alignment
wBusiness Objectives
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16. Process Management
Discovery and Documentation of Key Implementing Process
Program Processes Management Practices
 Recognize that documenting,
collaborating and managing key
processes leads to business and
program improvement
 Understand that cross-functional
teams have different interpretations
of what is important
 Select 10-20 high value or high risk
processes
 Break process into 10-15 tasks and
small teams

17. Process Management
Processes Implementing Process
 Program Planning Management Practices
 Assessments
 Inspections
 Mitigation & Repair
 Certification
 Risk Based Decision-Making
 Data QA and Integration

18. Process Management
Example
Basics
 Who
 What
 Where
 When
 How
Key Features
 Systems Integration
 Documentation
 KPI Reporting
 Escalation
 Notification
 Re-Assignment
 Versioning

19. Risk Based Decision Making
Risk Based Decision-Making (RBDM)
 RBDM is the foundation of the selection of
all assessment, inspection and rehabilitation
activities,
 RBDM supports the optimal selection of
integrity activities within the asset life-cycle
(PAS-55)
 Given the importance of RBDM in support
of the program objectives, Pemex decided
to deploy a normalized, monetized
methodology for project analysis called
Enhanced Probabilistic Risk Analysis (EPRA)
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20. Risk Based Decision Making
PFIM LOF Algorithm Structure
Broaden KPI’s to AM Life-
Threat EC IC SCC TPD WOF MFG CON IO
Cycle
EQ
Categories
 What is value of asset
given it’s operational risk
Variable Exposure Mitigation Resistance
profile, required
Categories
maintenance investments
Attributes and business value?
Attribute
Score E1 E2 E3 M1 M2 M3 R1 R2 R3
Variable
Weight WE1 WE2 WE3
  
Exposure = Mitigation = Resistance =
(VariableE1 * WE1) + … 1 – [(1 - VariableM1) * … 1 – [(1 - VariableR1) * …
(VariableEn * WEn) (1 - VariableMn) (1 - VariableRn)
WOF Threat Score = (Exposure) * (1 - Mitigation) * (1 – Resistance)
LOF Score = 1 – [(1-EC) * (1-IC) * (1-SCC) * (1-TPD) * (1-WOF) * (1-MFG) * (1-CON) * (1-IO) * (1-EQ)]
ROF Score = LOF Score * COF Score
Confidential

21. Activity Based QA & RCA
Basics
 Performing programmatic and
human-centric QA for
activities while correcting
issues as far upstream as
possible
 Quality assurance root cause
analysis, narrowing degrees of
separation from actual cause
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22. Activity Based QA & RCA
QA and Root Welding Quality Assurance
Cause Analysis  KPI’s provide transparency of
issues which support process
of RCA
 High level summary
 Drill-down by welder
 Field reports and qualification
procedure
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23. Summary
 Pemex Refining is in the process of starting year one
of program using the practices and technologies
provided in this presentation
 Extensive guidance for the asset management
practitioner is available through the following
resources:
 IAM - http://www.theiam.org/
 BPM - http://www.bpminstitute.org/
 LEAN - http://www.lean.org
 Six Sigma - http://www.isixsigma.com
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24. Questions?