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464057 Nbsp Indorama Nbsp 2009 Nbsp Draft

Jun 04, 2018



  • 8/13/2019 464057 Nbsp Indorama Nbsp 2009 Nbsp Draft


    Eleme Petrochemical Company Limited

    8thto 10thJune 2009

  • 8/13/2019 464057 Nbsp Indorama Nbsp 2009 Nbsp Draft


    Insurance Survey of,

    Eleme PetrochemicalsCompany Limited, PortHarcourt, Nigeria

    8thto 10thJune 2009


    Charles Taylor technical

  • 8/13/2019 464057 Nbsp Indorama Nbsp 2009 Nbsp Draft


    Report for

    United Insurance Brokers,Mansell Court,69 Mansell Street,London,E1 8AN

    Main Contributors

    Doug Scott

    Issued by

    Eur Ing Doug ScottB Tech C Eng CSci F I Chem E MEI

    Reviewed by

    Jeff AshmanBEng (Hon) C Eng MIEE

    Approved by

    Richard RadevskyBSc, CEng, CSci, CEnv, PEng, FICE, FCIWEM,MEI, MIFireE, FCIArb

    Ch l T l t h i l

    Insurance Survey of,

    ElemePetrochemicalsCompany Limited,Port Harcourt, Nigeria

    8thto 10thJune 2009


    Charles Taylor technical

  • 8/13/2019 464057 Nbsp Indorama Nbsp 2009 Nbsp Draft



    Executive Summary


    Charles Taylor technical has been commissioned by United Insurance Brokers (UIB) toproduce an underwriting risk survey report, for insurance purposes of the Eleme

    Petrochemical Company Limited facilities at Port Harcourt Nigeria.

    Significant Changes Since the Last Survey

    The site has undergone significant renovation since the last survey in 2006. Therehave been two further shut downs for refurbishment andf improvements after the lowlevel of maintenance during the years of NNPC ownership. A small project has beenundertaken to provide Virgin C5feedstock to one of the furnaces. There has been anincident involving the Olefin plant cold box but this has been resolved without the

    need for an insurance claim.

    The plant is operating normally with the main limitation on production being theavailability of feedstock.

    The Site

    Eleme Petrochemical Company Limited (EPCL) was originally a subsidiary of theNigerian National Petroleum Organization Corporation (NNPC) but was sold to

    Indorama in May 2006. EPCL operates an olefins plant and downstream units,mostly polymers at Port Harcourt Nigeria. The facilities date from the mid 1990s.

    Natural hazards in the area are modest.

    The facilities are relatively modern with good spacing between the individual processunits, utilities and the storage area. However, there is an element of congestionwithin some of the process facilities. The level of loss prevention features variesbetween process units, with only a limited number of remote isolation valves on large

    process inventories in the ethylene plant.

    Storage facilities are generally to modern standards but unusually, for a relativelynew facility, do not have independent high level alarms.

    Administ rat ion

    P i t th l f EPCL t I d NNPC i t i d ll ti ht t l

  • 8/13/2019 464057 Nbsp Indorama Nbsp 2009 Nbsp Draft



    Activities in most areas follow accepted industry practice but are, sometimes at anearly stage. For example, the site will use the MAXIMO Computerised MaintenanceManagement System (CMMS) but this is still at an early stage of implementation,

    Whilst some updating of procedures and documentation has been undertaken, thereis still room for improvement, even in some of the procedures which have alreadybeen updated.

    Fire Protection

    The fire detection and protection systems have been overhauled and are largelyoperational. However, a number of defective alarm systems were noted around thesite.

    One of the electrical fire pumps was in continuous operation to supply water for washdown and a significant number of fire fighting hoses were being used for operationalreasons.

    New investment includes a replacement fire alarm system in the polyethylene plant

    and a new fire truck.

    In summary, EPCL has vastly improved in terms of mechanical integrety as a consequenceof the capital expenditure mantainence turnarounds since Indorma took over the facilities.The focus now needs to be in improving procedural aspects and ensuring all documentationat the site is updated.

    Insured Values

    The replacement values for the facilities were estimated by AVC (of the UK) in 2006 to beUS$ 868 million. The property values have not been increased since.

    The business interruption sum insured is US$ 83 million with a 12 month indemnity period.

    Loss History

    Since Indorama took over the site, there have been two claims:

    May 2008 damage to cold box, this was subsequently withdrawn

    June 2009 loss of production as a consequence of lack of feedstock, currentlyestimated at US$ 4 million.

    Loss Estimates






    (US$ illi )

  • 8/13/2019 464057 Nbsp Indorama Nbsp 2009 Nbsp Draft



    Recommendations for Risk ImprovementTen recommendations were made as a result of the survey:

    Recommendation Descripti on Category

    09-01 Sampling Procedures Priority

    09-02 Fire and Gas Alarm Systems Priority

    09-03 Control Room Doors CAPEX

    09-04 Urea Formaldehyde Foam (Cold Insulation) CAPEX

    09-05 Document Control Human Factor

    09-06 Operator Emergency Training Human Factor

    09-07 Permit to Work (PTW) System Human Factor

    09-08 Isolation for Maintenance Human Factor

    09-09 Electrical Integrity Human Factor

    09-10 Trip By-Pass Procedure Human Factor

    The status of the 58 recommendations from previous surveys is summarised below:

    Recommendation Summary June 2009

    Complet e, 17

    No Change, 7In progres s,


    Withdr awn, 6

    Unkn ow n, 5

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    Overall Presentation Sheet

    Natural Perils 3.5 Management 3.5 Fire and Gas Detection 2.8

    7 Parameters 0 0 1 1 5 5 Parameters 0 0 0 2 2 2 Parameters 0 0 0 2 0

    External Exposures 2.6 2.3 Water Supplies 3.0

    9 Parameters 2 0 1 0 6 6 Parameters 0 1 2 2 1 4 Parameters 0 0 1 2 1

    Inherent Hazard 1.0 Permit to Work System 2.9 Drainage 3.0

    6 Parameters 2 1 2 0 0 6 Parameters 0 1 1 0 3 3 Parameters 0 0 0 2 0

    Layout 2.8 2.3Process Area

    Fire Protection 1.9

    2 Parameters 0 0 0 2 0 6 Parameters 0 2 1 2 1 6 Parameters 0 1 3 1 0

    Control Systems 2.0 2.3 Offsites Fire Protection 1.7

    3 Parameters 0 1 1 1 0 3 Parameters 0 0 2 1 0 7 Parameters 1 1 1 2 0

    Process Safety Systems 1.9 1.7 2.0

    5 Parameters 0 2 2 1 0 3 Parameters 0 1 2 0 0 3 Parameters 0 1 0 1 1

    Loading/ Unloading N/A Inspection Procedures 2.9Passive

    Protection 1.8

    4 Parameters 0 0 0 0 0 5 Parameters 0 1 1 1 3 4 Parameters 0 1 1 0 0

    Storage 1.5 2.6 Foam Supplies N/A

    5P t 1 2 1 1 0 5P t 0 1 2 2 1 3P t 0 0 0 0 0

    Storage areas need some refurbishment Safety procedures are generally to a high stadard.

    Limited process safety systems installed but

    upgrades being undertaken.

    A new management of change procedure has been

    developed but still has a number of drawbacks.

    Systems appear to be in good condition

    Most porducts are transported by truck in a non

    haardous form. A new road tanker unloading facility

    has been built with basic facilities.Pipeline systems

    were not reviewed in detail during the survey

    Inspection Procedures are to a generally good

    standard with a well trained and enthusiastic

    workforce. Some aspects such as Positive Materials

    Indentification could be improved.

    The site is moving is considering a move to Risk

    Based Inspection

    Level of passive protection varies between different

    process units

    Layout between units is generally spacious. There

    are some congested areas within the units

    A considerable amount of mainteance work has

    taken place since the take over by Indorama. The

    condition and reliability of the equipment is much

    improvied. Routine maintenance issues, such a sthe full implenetation of the MAXIMO planning

    system needs

    Systems have been repaired and are fully


    DCS systems being replaced.

    Although control rooms are blastproofed, the doors

    are frequently left in the open position.

    A new technical serivces function has now been


    Systems examined were generally good. However

    some unsealed penetrations through dikes in the

    LPG area were noted.

    All senior management positions occupied by ex-


    Fire detection systems have been repaired and the

    system in the Polyethylene plant replaced.

    However, a number of falied loops were noted in

    different systems around the site.


    Operating Procedures

    Hardware Software

    Minor exposure from other facilities. There has

    been previous unrest with the local community

    Operating procedurs are a mixture of orginal and new

    procedures. Some operating manuals appear

    limitied and full information was not available.

    Some undesirable operating procedures were noted,for example the operation of flare drums on manual


    Fire water system appears in good condition,. There

    is still a problem with use of fire water forwashdown,


    A new permit system has been introduced. And

    generally works well but some detailed

    improvements are possible..

    No problems were noted with drainage during the



    Safety Procedures and


    Management of


    Utility Area Fire

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