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Performance improvement in integrated sites
10:09 AM MDT | August 15, 2013 | By JOHN HAVENER, SENIOR CHEMICALS CONSULTANT, SOLOMON ASSOCIATES
In today’s production environment, refining managers find themselves increasingly responsible for integrated refining and chemicals industrial sites as economic forces drive refiners to divert fuels products to higher-value petrochemical products. These site managers are now faced with a challenge that integrated chemical site managers have struggled with for years—how to understand the performance of all their units, regardless of plant type, across all operations on a consistent basis.
Managers of these large and complex industry sites are in a quandary—they are expected to make a significant difference in just a few short years, but capital remains limited and significant capital projects take years to start up, let alone impact the bottom line.
One approach to this complex challenge is a no-/low-capital solution based on improving the performance of existing assets. Done correctly, this approach typically yields a very high return on investment with quick implementation— allowing managers to understand and improve performance across operations within a relatively quick timeframe.
While a key component of such a solution lies in the use of established, recognized, and accepted industry-performance metrics, it must be understood that integrated site managers typically have to rely on numerous benchmarking methodologies, none of which are similar to the unified, standard benchmarks that have been available to refiners. Additionally, benchmarks for each chemical process are not consistent from one chemical process to another—making them difficult to compare and impossible to add up to a view of the whole industrial site condition and potential opportunities that may exist.
To be effective in driving an operational excellence program, performance benchmarks need to include individual production areas and the integrated site as a whole. Comparable metrics provide the opportunity to target performance improvement efforts where they will have the greatest impact for the entire site.
Drilling down further, individual plant and aggregated site-wide benchmark metrics should cover the following:
With this level of insight and the gaps in these areas tied to industry-leading performance, managers can set realistic improvement targets and goals based on real-world performance data and all areas of the plant can then be held accountable for the improvement goals developed.
Case study: four-site petrochemical complex
A company with four large petrochemical complexes needed to improve performance to demonstrate to investors and the financial rating agencies that they were deserving of reduced interest rates on their corporate debt. The company enlisted Solomon Associates to perform an Integrated Site Performance Analysis, or ISS Study.
Benchmarking of every process on four separate sites was performed. The scope included multiple cracking plants, chlor-alkali, multiple vinyl chloride monomer (VCM) and polyvinyl chloride (PVC) plants, virtually every polyethylene (PE) and polyethylene (PP) industrial process in use today, and a large aromatics facility. Consistent benchmarking methodologies identified more than US$140 million/year in no-/low-capital cost improvement opportunities (gaps).
After the first year of the implementation phase, more than US$110 million/year in benefits had been verified and documented as captured. The company used the verified profit improvements to achieve a reduction in debt interest rates below the country cap, more than doubling the benefits achieved.
Case study: unified refinery and petrochemicals industrial site
In an integrated refining and petrochemical complex, the scope included a fuels refinery, a cracking plant, several PE plants, an ethylene oxide/ethylene glycol plant, and the terminal operation. Financial gaps in each process were identified and ranked. More than US$700 million/year in gap closure opportunities were identified for action.
For managers of complex integrated sites looking to show tangible improvements in operational and financial performance, unifying accepted metrics is critical. Once you have established site-wide metrics and baseline gap analysis, you can work on gap closure and track improvements. Likewise, structuring a performance improvement plan on disparate metrics will be difficult because the guiding benchmarks cannot be accurately combined across processes. This case clearly demonstrates where the sum of the parts is more important than the pieces.
John Havener is the Integrated Site Services Study product manager at Solomon Associates. He can be reached at John.Havener@SolomonOnline.com.