Engineering Optimization for Production Facilities Enabling Safe Operations and Cash Flow

The worldwide shock caused by the coronavirus (Covid-19) pandemic has drastically altered the course of the global economy and energy markets, exposing and reinforcing the need to create business models more dynamic, integrated and based on risks. The oil and gas industry has undergone a major transformation in the way it operates, with greater focus on activities offering paybacks in a shorter period of time and the sanctioning of simplified and smaller projects, in which a modular approach allows to increase the capacity of the facilities according to the market demand.

This update is aimed to give certain insight into how fast-paced engineering can be capable of maximizing value for both the customer and service provider by earlier cash-in due to accelerated production, lowering the overall barrel cost produced, and potential reduction of greenhouse emissions, throughout the Processing Systems Technologies and Production Facilities.

The framework of this article is that the Service Company acts as a technology and solutions source for Independent, NOC, IOC, by introducing innovative and cost-effective technology solutions managing a comprehensive list of project risks. It pursues to maximize overall performance throughout full life cycle by long-term engagement, since early customer engagement, bidding, execution engineering enabling manufacturing, construction, commissioning, and to end operations and maintenance.      

Early Customer Engagement: solutions usually commence by being curious with the customer, understanding their needs, context, risks, environment, priorities and limitations, deadlines, quick wins, and speaking to them in their language.

It is a vital stage for aligning goals and expectations, it pursues to identify how to create value for customers, mastering the customer journey, towards the end-to-end customer experience and giving advise into shared value creation. It fits into the customer's FEED stage, processing technologies and innovative ways of execution are evaluated, and the best solution is found aligned with the customer's corporate goals. The criticality of getting this right is evident in the plot shown below. Under-estimate or over- estimate the design requirements at the outset, and no matter how well you execute and operate, or how much capital you throw at the opportunity, you will never realize the value potential.

Careful evaluation of the technology, suitable engineering design and sizing of facilities, execution scheduling and provision for formalized risk contingencies define the project. Getting this project definition right is therefore paramount to reach sustainability. Furthermore, for de-risking project opportunity by minimizing execution uncertainty and influencing customer requirements and specification changes, towards more achievable goals, with the necessary balance between investments and risk.

High level project and processing technology description, simulations, heat and mass balance (H&MB), process flow diagram (PFD), availability and reliability considerations, safety strategy, preliminary equipment list, budgetary quotation, and estimated delivery time, are the list of documents delivered to the customer at this stage.

Bidding: it's about beating the competition, being able to build a team spirit to brainstorm, make connections with lessons from past projects, careful assessment by experts in the oil, gas and water processing systems technologies and select the case solution, conduct process safety  analysis, and constructability, operability and maintainability reviews of the facility.

The engineering and design of production facility is a complex team effort involving different disciplines of engineering: process, mechanical, piping, electrical, instrumentation, controls, materials, safety, and project. The structure of the project engineering team is desirable to remain steady during the bidding and execution phase. It also entails considerable management skills and coordination despite time zones difference, geographical dispersion, and nationalities, always managed with a team spirit to achieve the committed objectives.

The mindset of the engineering team to outperform the competition through a clever and cost-effective solutions follows some guidelines but are not limited to this:

Processing Technology: a systematic assessment of processing technology for separation, dehydration and desalination of oil, gas, water, and solids handling will depend on whether it is light or heavy oil, sour oil, or sour gas, is the gas reinjected? Is the water treated, reinjected? What will be the handling of solids? What are the output specs for oil, gas, and water? What is the target specs for each stream? etc.

Therefore, the multidisciplinary engineering experts to drive the technical complexity and find the fit-for-purpose-solution. The design phase starts with the Process Simulations, Heat and Mat Balance (H&MB), Process Flow Diagram (PFD) and client specifications given into Invitation to Tender (ITT). The outcome of the design phase is usually sizes of major equipment, data sheets and P&IDs associated, always applying process safety analysis in accordance with type of installation across the design life cycle.

Modular Engineering at bidding: modularization, which entails prefabrication and preassembly of structures away from the construction site, it comes in various sizes, loads, and shapes, from very large modules that are transported by barge, trucks, and sometimes modules that may fit in a sea freight container. This concept is really important to optimized resources, investment and made a viable project.

Modular execution provides benefits by improving quality, delivery time and labor productivity, due to better controlled working and fabrication conditions, i.e.: the risks of working at height and of mechanical lifting are reduced, and risks to health, even to safety and the environment (HSE), are minimized.

A well-developed modular-execution strategy creates an integrated solution for projects in remote areas, severe climatic conditions, or a shortage of skilled labor. Lego and Plug-and-Play approach are leading the way to improve overall project results, engineering efforts associated with modularization must be technically sound and achieve the requirements that are expected for a facility to operate safely, deliver the specified product, and achieve the target production.

Whether Process skids or facilities, in both cases engineering is expected to design the construction phase as its client; that is, designing a facility so that it is easier for the construction group to build that design in the field.

The solution engineering also addresses a careful weight management to control module size and minimize any shipping and installation surprises.

Lay-out Optimization: a cost-efficient and inherently safe layout can be provided in the early stage of the production facility design. Engineering and design aimed at the shortest construction times and putting the plant into operation as quickly as possible.

Project data such as location, local codes and regulations, access roads, waterways, railways, seismic conditions, climate data (average temperature, and rainfall), wind speed and direction, inlet and outlet tie-ins are key inputs to developing a tailor-made plant layout that ensures a compact configuration for economic efficiency.

Guidelines must follow such as proper safety distance involving flare stack location with the associated thermal radiation, noise, and air pollution impact, even safe separation between process equipment and/or process systems, determined for specific operational conditions and particularly barriers like SDV, F&G, etc. Constructability review to save time and money by uncovering problems or potential problems that may be faced during construction such as errors, omissions, ambiguities, and conflicts. Operability, sufficient working space, and headroom must be provided to allow easy access to equipment. Maintainability, space for maintenance i.e.: heat exchangers need to be sited so that the tube bundles can be easily withdrawn for cleaning and tube replacement.  Flexibility is key to take care of probable future expansions.

Uni-direction flow move only in the forward direction, toward stage of completion, area for processing such as slug catcher, three phase separation, treatment package equipment of oil, gas, and water. Pumps for oil export and water injection located as much as close to power generation, area for storage, compression, utilities, buildings, and roads.

The Process Flow Diagram (PFD) and preliminary Piping & Instrumentation Diagram (P&ID) are developed by process engineers and reviewed, completed, and discussed by the project engineering disciplines in order to ensure proper, efficient and safe operations. The P&ID contains details and specifications of all equipment, piping, fittings, instrumentation, control valves, safety elements and contains references to detailed drawings of equipment. The P&ID serves as the primary reference document in communication between engineering and design personnel in all disciplines. Thus, the P&ID is a key working document in the engineering and design of processing plants and piping systems which are connected to technical data such as operational and safety philosophy.

The P&ID, plot plans and elevations are used in building a 3D model of the processing plant, it will cover all the components involving major equipment, utilities, pipe racks, piping, control stations, buildings and support structures. The 3D model will allow for reviews of the constructability, operability, and maintainability of the facility.

Material Take-off (MTO) and installation specs for civil, structural, piping, mechanical, electrical, instrumentation, and control are key deliverables in creating the Bill of Materials (BOM), which is then used to request for quotation (RFQ) for all necessary materials and complete bidding cost exercise.

Risks: It is essential to identify the risks related to possible scenarios in advance and be prepared to implement contingency measures, as needed. An execution risk identification, analysis, evaluation and mitigation workshop are held, involving multidisciplinary team such as designs engineers, customer’s experts and external process risk advisors. Typical engineering risks are late issuance of technical requisitions, missed in engineering, changes due to engineering studies, delay in vendor engineering documents, etc.

Execution: once the contract is awarded, a detailed handover from Sales to Project Execution is carried out, then the project engineering team executes according to the bidding proposal with slight variations, unless the client requests such variations, in that case, will be handled as variation orders (VO) and amended into the original contract.

The organizational responsibilities (RACI Matrix) and scope interface demarcations (Interface Matrix) require to be well defined and communicated to all persons and companies involved in the work. R – Responsible (Does), A – Accountable (Approves), C–Consult (Reviews), I– Inform (Requires being informed).

Custom-engineering-design-strategy is driven by deliveries to speed up design review workshop, technical requisitions moving forward to procurement stage, safety analysis review such as HAZOP, QRA and SIL, site-preparation specs, civil foundation designs with the aim of being ready when modules arrive at site, building the 3D model and issue in 30% of it, first cut of materials take-off (MTO), which will be progressively updated with supplier's data and feedback of the safety reviews and constructability recommendations. Either International standards (API, ASME, etc.) or customer specs will be followed.

Successes criteria are customized and agreed along with the project team, furthermore best practices suggest that strong customer setup is desirable for regular monitoring and pragmatic decision making at the right time and approval of documents if needed.

Design review at 30% and 60% of engineering are systematic approach exercises that embraces teamwork of construction, commissioning, operations and maintenance, enriching the discussion and making the design more robust. This provides a path to more efficient design by incorporating the teams’ expertise to deliver overall safe and reliable plant operation.

Technical Requisitions: Global sourcing and manufacturing was part of the project execution plan; therefore, critical major equipment will be addressed as a priority. Consolidation of technical data such as data sheets, P&ID, specs, technical narrative, are key to kick-off the procurement phase.

Automation is the main driver in the design and operation philosophy, certain standards have been developed in recent years, to accommodate industry 4.0 principles, big data, ensure consistency among systems when operating and communicating 24 x 7 data. Emergency shutdown and safety instrumented systems are integrated as part of the engineering design. 

Efficient-cost global supply and manufacturing create a capital efficiency that allows many projects to be sanctioned that otherwise would not have been able to move forward. End-to-end material management has become a complex, international enterprise, while qualified suppliers ranked by financial capabilities, quality, lead time, cost, and risk are previously assessed.

Safety Studies: HAZID, HAZOP, safety integrity level (SIL), QRA, FERA, RAM, human factors (ergonomic), pre-startup safety review (PSSR) and others are typically the safety studies completed and constructability review (CR) to assess potential hazardous and problematic events to improve construction efficiency. The typical safety study workflow is shown in Figure 2.

The project engineering manager must take proactive leadership by executing recommendations from the approved actions list in each workshop, updating key engineering documents to avoid delays in the execution schedule.

Modular Engineering at Execution: when it comes to modularization efforts, engineering is carried out on the 3D model updated with approved P&IDs, vendors data and drawings, plot plan, field elevations, tie-ins, establishment of underground routings, pile and foundation locations, etc., introducing systematic approach to review 3D model at 30%, 60%, and 90%, applying best practice of consistency through P&ID walkthrough against 3D model, and proactive peer reviews.

One of the most critical early decisions to be made on the project is the maximum weight and size of the modules. Often, to develop the designs, engineering works in conjunction with logistics, inquiring local authorities for regulations on weight and size limitations for road, rail and sea transport, as well as local transport companies.

A work breakdown structure (WBS) is required, covering all isometrics and materials coded for correct destination and installation scope. The WBS delineates the module assembly yard versus the jobsite. Modules for a project are assembled at a module assembly yard, rather than at the jobsite, thus transferring work that would have taken place at the construction site to the module assembly site. Engineers bear in mind, modular assembly is like assembly-line work in manufacturing, where progress halted in one part of the assembly line slows down the whole line. A construction sequence that is defined early and does not change, prioritizes drawings issued for construction (IFC) enabling procurement, logistic, manufacturing planning and execution efforts. 

Modular designs allow processing systems to be more flexible with increased production due to new discoveries by expanding them in certain sections of the plant. The benefits of transferring construction and labor costs from a congested jobsite to a controlled assembly environment at the module yard can be significant. The reduction in jobsite labor hours also helps to mitigate the risks associated with skilled or limited local (jobsite) labor and authorizations and permits to work at site. To speed execution, Modular Manufacturing Plans that maximize installation, pre-commissioning, and pre-shipment testing of complete modules to the job site (using a plug-and-play) are required.

Accordingly, engineering support at the yard needs to be greater in numbers than at the site. Answers to requests for information from the module assembler should be answered the same day, if possible, to prevent delays.

Managing Interfaces: The scope interface demarcations (Interface Matrix), among engineering, procurement, manufacturing, construction and commissioning during all stages of the project will enable successful modular plant delivery.

Commissioning and Start-up: is carried out after Mechanical Completion & Pre-commissioning, process engineers support commissioning lead with P&IDs and identifying sub-systems that can be broken out and prioritized based on a logical sequence of events to start up the production facility. It will help by explaining processes as they are designed, a mechanical and piping engineers are mostly responsible for the support of verification of all mechanical equipment and piping throughout the plant. The electrical, controls and instrumentation engineer supports all electrical power distribution systems, control room and instrumentation testing and documentation. Engineering provides calculations required for various commissioning tests, and the commissioning team can use engineering knowledge and efforts to assist in commissioning and start-up. The engineering design must be developed taking into considerations all safety requirement like execution of PSSR, Check List, Safety Assessment of Startup Procedure, Assessment of SIF demand (bypass), among others.

Operations and Maintenance: business models that linkage EPC to Operation and Maintenance allow customer and service provider maximizing overall performance throughout life cycle.

Engineering design flexibility, and maintaining reliable long-term throughput, enables faster modification and resolve issues encountered due to inherent uncertainty of feed variation and early failures on equipment.