N O V E M B E R 2 0 1 9 V O L . 2 5 I S S U E 1 1

TamingTurnarounds

ATFs for EVs

36 NOVEMBER 2019

Taming theTerror of

Turnarounds

Perhaps the most stress-inducing timesat refineries occur during maintenanceshutdowns or turnarounds, eventsrequiring Herculean efforts in organiz-ing manpower and mobilizing materialon a massive scale. Every day of a turn-around presents new challenges andpossible pitfalls, but if done correctly,the end results are greater efficiencyand higher profitability for companies.

One in four oil industry professionalsrated their turnaround below a five ona scale of one to ten, in a 2016 poll byOil & Gas IQ; the average rating wasonly 6.7.

Industry professionals toldLubes’n’Greases that a number of factorsexacerbate the headaches associatedwith turnarounds, from factorsstemming from outside the plant—corporate headquarters breathingdown their necks to stay on scheduleand on budget, to those within theplant—cramped spaces, untrainedworkers and inadequate planning.

The scope of a turnaround is simple:to sustain operation of the refinery byinspecting and testing equipment andconducting mechanical repairs andupgrades, according to Mumbai, India-based conglomerate Essar, whichdeclined Lubes’n’Greases’ interviewrequest, but provided educationalvideos about its oil and gas industryactivities.

If defining the scope of a turnaroundis easy, the actual work is not, saidKevin Buck, senior business leader forHydroprocessing at Des Plaines,Illinois-based Honeywell UOP, whichsupplies and licenses technology forthe oil industry. “Some [turnarounds]require crews to check equipment

from rectors and catalysts to on/offvalves, while others focus on a certainpiece of equipment,” he said.

Turnarounds are a response to theneed for periodic maintenance or reno-vation of facilities. At base oil plants,they are usually scheduled every threeto four years for API Group II and IIIfacilities and every five years for APIGroup I plants, said Stephen B. Ames,managing director of SBA ConsultingLLC in Pepper Pike, Ohio. Ames has 50years of experience in the downstreamoil industry, including positions withGulf Oil Corp., the former Standard Oilof Ohio and BP.

“There are no firm rules for shut-downs, as it is highly dependent uponthe age and past maintenance of theunits, feedstock quality and the severityof the operations,” he explained. “OldGroup I plants may have equipmentthat has greater need of maintenance.

“For Group II and Group III plants,the quality of feedstock and level ofoperational severity (for example, pro-ducing stocks with higher viscosityindex or lower Noack volatility) maydictate the length of runs. Poorer quali-ty feedstock or higher severity opera-tions generally correlate with a shorterperiod between turnarounds,” saidAmes.

Both Ames and Buck said turn-arounds can include myriad activities:preventative equipment maintenance,general corrections or repairs, and evencomplete replacements or overhauls ofcertain units. However, “the biggestpressure during a turnaround is to getthe refineries back online,” said Buck.“During a turnaround, refineries aren’tmaking money.”

37LUBES’N’GREASES

BY DANIEL TYSON

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for a high-complexity job clock in atabout 20 percent. Schedule slips arealmost three times greater at a highlycomplex job than at a less complex pro-ject— about 30 percent versus 10 per-cent, respectively.

Essar explained that staffing for largerprojects can run as high as 40,000 to60,000 people. Contractors and sub-contractors bringing new, untrained orundertrained employees to the jobs is akey reason for missed deadlines and

number of base oil producers for com-ments for this story, but they did notreply or declined to comment, citingproprietary information.

Ames said most refineries have theirown maintenance departments thatdecide which units are taken down andwhat work needs to be done when. Thestaff also supervises contract labor usedfor non-management activities.

Turnarounds can last as little as a fewweeks to as long as several months.Extending a major turnaround, industryexperts said, can result in market short-ages, skyrocketing prices or both. Thiscan have a negative effect on the wholeindustry, as other suppliers are strainedto meet demand.

According to Mike Goddu, co-founderof Austin, Texas-based consulting firmJMJ Associates, highly complex turn-arounds incur much higher averagecost overruns and schedule slips, andtheir performance is less predictablecompared to simpler projects. Costoverruns for a low-complexity projectare around 5 percent, while overruns

budgetary overruns, the company said. The Oil & Gas IQ survey cited scope

creep as the principal cause of overrunsin the turnaround process, reportingthat this was at the heart of 45 percentof over-budget projects. Scope creeprefers to an unexpected increase in aproject’s requirements after work hasbegun. Breakdowns of the relationshipor communication with contractorsaccounted for 26 percent, delays onindependent work for 20 percent andbudget recalculation for 9 percent.

A New Approach

For more than three decades, JMJ’sGoddu has worked with large andsmall companies, including a num-

ber of base oil facilities, on refineryturnarounds. JMJ customers includeExxonMobil, Shell and Total. He’s seenhis share of successful turnarounds aswell as failures.

“The biggest challenges to most turn-arounds are culture- and organization-related. What’s missing is leadership,not management,” he told the Refining

The direct cost and the loss of pro-ductivity is why some refinery opera-tors delay or even skip performingturnarounds, according to Frost &Sullivan.

“Refinery maintenance is often over-looked due to high costs, shutdowntime and the resultant loss of produc-tion,” the 2013 survey of the global oiland gas refinery maintenance, repairand overhaul services market found.

Lubes’n’Greases reached out to a

and Petrochemicals World conferencelast year in Vietnam. “If your challengesare not technical, stop seeking techni-cal improvements…People are the keyto safety and performance on turn-arounds,” he emphasized.

Some in the industry would call thisview unorthodox; others would say it’sheresy. But a shift in thinking is vital formore successful turnarounds, Goddusaid. Thinking should switch from con-trol to enroll. “The culture of gettingpeople engaged is more importantthan what you’re doing,” he explained.Important factors in achieving thatengagement are a focus on culture andleadership, and engagement with thecontractors to form one team.

Goddu said he experienced somepushback on this new approach to turn-arounds. Some engineers and managersbelieve the old ways served a purpose.

But he’s adamant that the new way ofthinking about the turnaround processwill result in more success. Look no fur-ther than the statistics, he said; theyclearly show a pattern of lost moneyand opportunities.

The current culture of turnaroundsincludes an “us versus them” mentality,Goddu observed, where an expandingworkforce and contractors are thescapegoats for blown finances andmissed deadlines. Additionally, the toppriority is bringing the project in onschedule and on budget. Goddudescribed this as a “don’t screw up”mentality.

He argued that instead companiesshould use an “integral” approach.Maintenance managers should switchfrom the current “default” mode to a“high integrity” model of shared com-mitment and goals, where contractorsand key sub-contractors lead the execu-tion team. “Contractors must bebrought into the planning,” he said.“They must be treated as partners.People love to work for a cause and seetheir contribution in it.”

He cited a number of successful clientturnarounds using this integralapproach. At an Indian plant thatGoddu described as one of the largestrefineries in the world, a 10,000-person

38 NOVEMBER 2019

Source: Oil & Gas IQ, 2016

Principal Source of Overruns during Turnarounds

Scope creep - 45%

Budget recalculation - 9%

Delays on independentwork - 20%

Breakdown of contractor relations/communication - 26%

workforce completed a 2017 turn-around with just one lost-time injury inwhich a worker fell from a bicycle onsite.

Both Buck and Goddu agreed thatturnarounds are fraught with danger,but that danger can be contained.“When a person is involved, you wantto make sure they are not at risk,” saidBuck. “Safety has to be job one—it hasto be.”

A current turnaround project in Asia,which included contractors in the twoyears of planning, is experiencing suc-cess, he said.

Those successes were achieved by“gaining the respect, attention andengagement of supervisors and workersfrom day one,” said Goddu, who isbased in Singapore.

Increased Demand

Global base oil capacity continuesto expand, and each plant—newor old—will eventually need

maintenance.Buck and Goddu said young employ-

ees are vital to help meet the growingdemand in the energy sector.

Goddu said that young workers areneeded in “all aspects of the industry,and they will reap rewards from theexpected growth in most sectors, theneed to overhaul the others, andreplacement of the sources and sectorsthat are going away.”

The skills needed will be technical,both men said, presenting opportuni-ties especially for young people withengineering degrees of many kinds.“But of even greater need will be youngprofessionals and managers with what’scalled holistic skills—the ability to seethe big picture, embrace change, leadpeople, bring teams and aligned suppli-ers and licensors on a path to thefuture, not clinging to the past. This willshow up in all areas, including refittingold plants and bringing new onesonline,” said Goddu.

JMJ and Honeywell both providedevelopment opportunities for youngpeople, giving new workers the chanceto learn from employees with morethan 40 years of experience. ❚

39LUBES’N’GREASES