Engineering for the · PDF file© 2015 Fluor. All rights reserved. Engineering for the Future Value engineer your project WRA 19th Annual CIS Downstream Summit Dec. 1-3, 2015 Baku,

© 2015 Fluor. All rights reserved.

Engineering for the Future Value engineer your project

WRA 19th Annual CIS Downstream Summit

Dec. 1-3, 2015 Baku, Azerbaijan


Fluor: what we do

… a passion to design and build!

Client with an idea and a business plan

Operating facility producing the right product

in a cost competitive and sustainable way

Fluor Turning ideas

into reality


Engineering in the Future



Fluor in Azerbaijan

Long standing involvement

PMC on most SOCAR OGPC studies

OPGC licensor evaluation contractor

PMC on SOCAR HAOR Modernization project

PMC on SOCAR Polymer project

4


Sound Basis – Essential for a successful project


Influencing Project Costs

Process Design

Detailed Engineering

Equipment Manufacturing Construction

To

tal co

st

of

the f

acil

ity

Time

good EPC execution

good EPC execution

Determine

the basis

Fulfill the

promise

Sta

rtin

g T

IC

En

d T

IC


Front-End Loading Structure

FEL 1

Concept

FEL 2

Feasibility

FEL 3

Prel. Eng.

Detailed

Engineering Operate

Select

Technology

Size

Scope

Location

Milestones

Identify

Opportunity

Need

Products

Options

Economics

Define

Basic Design

Schedule

Plan

Implement

Detailed

Design

Procurement

Construction

Startup

Decision Gate …

Proceed Revisit or Stop

FEED Pre-FEED EPC Operate

7


Phased Project Development

HA20130122.ppt

PLANNING FRONT-END DETAILED

ENGINEERING

EQUIPMENT

FABRICATION CONSTRUCTION

% o

f T

OTA

L

CO

ST

50%

100

%

80%

CAPITAL

COSTS

COMMITTED

MONEY SPENT

OPERATING

COSTS

COMMITTED

( Utility conditions are fixed latest when contracting basic engineering packages.)


Refinery modernizations: revamp or new-built

9

Revamp New built

For moderate changes in capacity

and/or product quality

Maximize re-use of existing equipment,

few new equipment items

All equipment new

Lower cost Higher cost

Faster implementation, avoiding long

delivery of new equipment

No new plot required New plot required

Construction in life plant Separate construction site

Longer downtime unless properly

managed

Many recycles in engineering phase Consecutive engineering

Tie-in with units shutdowns


Refinery modernizations: engineering phase

10

Process

simulations Equipment design

New-built: once-through

Revamp project: multiple recycles

Y Can duty be handled by existing exchanger?

Technical

calculations

Can duty be handled by existing pump?

Technical

calculations

Is metallurgy adequate?

Technical

calculations

N

Specify

new

equipment

Reset basis?

N

Specify new

equipment Reset basis?

Y

N

Specify

new

equipment

Reset basis?

N

Y

N

Y Y

N

Technical

calculations

Etc.

Reduce revamp scope by designing from test-run data

rather than datasheets

Potential to reduce engineering hours as well


Multi dimensional engineering

11


Technical

calculations


Technical

calculations


Technical

calculations

N

Specify

new

equipment

Reset basis?

N

Specify new

equipment

Reset basis?

Y

N

Specify

new

equipment

Reset basis?

N

Y

N

Y Y

N

Technical

calculations

Multiple dimensions: design cases, life cycle etc.

Recycles between cases

Sound experience and judgment needed

Crude A


Technical

calculations


Technical

calculations


Technical

calculations

N N

Y

N

Technical

calculations

Crude B


Technical

calculations


Technical

calculations


Technical

calculations

N N

Y

N

Technical

calculations

Crude C

© 2015 Fluor. All rights reserved. 12

Value Improving Practices; what is it?

What are VIP’s”:

– Formal, repeatable processes focused to optimize net present value

– Critical to add value to a project during early development

What VIP’s are not:

– “just good engineering”

– a special look at some aspect of the project

– cost reduction exercises

– audits

– Gate Reviews

Basis for success:

– All key deciders involved and as early as feasible


Value Improving Practices; when?


Value Improving Practices; when?

14

FEL/

Feasibility

Study TIME

$


Value Improving Practices; why? Impact of FEL and VIPS

RELATIVE CAPITAL COST AS A FUNCTION OF FEL

FEL Rating

Rel

ati

ve

Cap

ital

Cost

1.0

1.1

2.0

0.9

Industry Average Cost = 1.0

FEL Improvement Only

FEL Improvement plus VIP’s

Best Practical Good Fair Poor

Ref. IPA


Selection of VIP’s for a project

There are numerous VIP’s which can be performed during total project development

However, not necessarily all have to be done to achieve good project definition

A fit-for-purpose approach is required and should be investigated for each individual project


VIP Value Engineering


VIP: Value Engineering

A Value Engineering Workshop is a concentrated effort to maximize value

Value Engineering is a function-based technique that uses team interaction to maximize value for a project

Ref. Practice 245.200.0100



Phases in Value Engineering

Information

– Get team all info required

Function Analysis

– prepare / review cost-function diagram

Creative

– brainstorming

– typically results in 100+ ideas



Phases in Value Engineering

Evaluation

– quick ranking, typically based on: feasibility

cost saving

schedule

– go further with top 10

Development

– further work on top ranking ideas

Decision Building

– based on developed ideas, decide on actions



Get solid buy-in at meeting, and make firm recommendations

Value Engineering Report

Measures should be in place to ensure further action on VE recommendations



Team Composition

Decision maker

The ultimate Client

Marketing function Client for product sales

Research

Process

Operations (similar plant)

Engineering

Cost estimation

Facilitator



Additional Benefits

Better understanding of project objectives and constraints

Technical and cost alignment amongst team members

Better project definition

Preferential engineering etc. can be challenged


Typical Value Engineering ideas

Challenging out-dated company procedures and standards

Removing unnecessarily tight specifications

– Design margin (max. air temperature. min. turndown)

Verifying and confirming early assumptions

Challenging experience of ‘previous ways of doing things’

Saving material

Improving processes

Shortening times required to perform tasks

Introducing innovative technology

24


Value engineering, outcome, example

25

∆TIC, M$ ΔNet margin, M$/yr ΔTIC - 4 * ∆Net margin,

M$

FCC: delete power recovery system, TSS and/or FSS -70.3 -4.1 -53.9

More effective VGO fractionation in VDU -15.0 0.0 -15.0

Amine integration (TGTU and VGO complex) -12.5 -0.4 -11.0

Off gas PSA for MHC flash gas only -6.6 1.6 -13.0

Delete recycle gas scrubber -5.0 0.0 -5.0

Increase H2 grid pressure from 25 to 35 barg -4.9 0.2 -5.6

Make SWS single train -4.4 -0.2 -3.5

Replace backwash filters by standard filters -4.4 0.0 -4.4

Delete the naphtha splitter -3.8 0.3 -5.0

Optimise the C3/C4 reboiler system -0.2 0.3 -1.4

Combine all the feeds from storage to the MHC in one line -0.2 -0.2

Eliminate the water wash after FCC lean gas amine absorber -0.1 0.0 -0.1

UCO rundown heat recovery: UCO hot to FCC 0.4 0.4 -1.2

Change E-motors to steam turbines 1.0 1.2 -3.8

Change fixed speed drivers to variable speed drivers 5.1 1.8 -2.1

Process coker LPG in FCC gasplant 43.3 12.4 -6.1

Optimise blending scope -32.0 0.0 -32.0

Reduce SRU capacity from 2 * 100 to 2 * 70% -12.6 0.0 -12.6

Import demin. water -9.8 -2.2 -1.0

Amine acid gas to sulphuric acid regeneration unit 0.0 0.1 -0.2

Staged investment of the VGO conversion project n/a n/a

Delete the de-ethanizer in the PRU -3.0 0.0 -3.0


Value Engineering, outcome, example savings

Project Total Installed

Costs (TIC)

Millions

Savings

as % of

TIC

Savings on 10-year life

cycle

Gas processing facility € 323 5.6 Not quantified

New Elastomers plant € 100 6 22

Oil refinery expansion € 228 7.5 27

Fertilizer plant revamp € 12 12.5 3.8

Food processing facility € 10 6-12 Not quantified

New Polysilicon plant $ 450 5 Not quantified

Onshore oilfield $ 100 10 Not quantified

EG project $ 30 6 Not quantified

26


Additional inspiration, motivation..

27

28

EXPERT GROUP: MATERIALS & CORROSION

29

SMART HEAT EXCHANGER SOLUTIONS

STEAM BALANCE FOR THE FUTURE

30


Results when applying VIPs

Projects that apply VIPs, solid FEL and available expertise and vendors in the early phase of a project, are characterized by:

Limited changes & rework

Better cost performance

Better schedule performance

Better quality & conformance to requirements

Better safety

Better operability

Better sustainability


Message

Give quality time in early phase of project development for brainstorming, communication, exchange, open minds

Utilise structured approaches / tools such as FEL, VIPs

Ensure that all parties participate, contribute

Encourage involvement of engineering specialists, utilisation of vendor experience

Sound basis for a successful project!

32



Contact

Fred Baars

Senior Director Process Engineering

Fluor B.V.

Taurusavenue 155

2132 LS Hoofddorp

The Netherlands

+31-23-5432764

[email protected]

Claus-Peter Hälsig

VP Process & Technology

Fluor B.V.

Taurusavenue 155

2132 LS Hoofddorp

The Netherlands

+31-23-5432202

[email protected]

34

Engineering for the · PDF file© 2015 Fluor. All rights reserved. Engineering for the Future Value engineer your project WRA 19th Annual CIS Downstream Summit Dec. 1-3, 2015 Baku,

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