Developing oil
refining and petrochemical industry is an index for success of each country’s
industrialization because it is a spearhead industry with an essential role
that widely influences many aspects of the national economy. Vietnam is one of
the leading countries in Southeast Asia, after China, Indonesia and Malaysia,
having large crude oil reserves.
The project to
build Dung Quat Oil Refinery is a national key project in oil and gas field
that is of great significance for social and economic development in Vietnam’s
Central region in general, and Quang Ngai Province in particular. Investment in
the construction of Dung Quat Oil Refinery will help facilitate domestic crude
oil processing, step by step to ensure energy security and reduce reliance on
petroleum imports, and contribute to boosting national industrialization and
modernization.
In
order to minimize the interfaces and reduce any conflicts between the separated
Contractors and the Owner during executing a grass root refinery project,
Owners normally prefer to award and sign an EPC contract with an EPC
contractor. An EPC contract is generally applied for
developing a Refinery project, in case of problems or disputes happen during
the project execution, then these problems and disputes shall be resolved in
accordance with stipulated clauses in the signed contract, Dinh Van Ngu made a case study which objectives
were to:
1. study organization, roles and responsibilities of EPC
contractors;
2.
study executed and controlled the pre-commissioning and commissioning phase in
accordance with the signed Contract;
Conclusion
To
ensure a successful implementation of this phase of the Project, Owner must
have full support from its Stakeholder and the Government. The Owner must have
a strong leadership and commitment from senior management throughout the
execution of the project. The availability and competency of the Project
Management core team also contribute an important factor during the initial/
preparation phase when the rest of the team will be mobilized. As many
cost-schedule trade-off are may be required, Owner must prepare a strong
financial status and willing to accept or compromise some commercial terms.
The
results from this study have identified that the Managing of Pre-commissioning
and Commissioning phase play important roles of Project. In this report, the
Author’s real experiences lead to identifying
the most important key success in managing EPC pre-commissioning and
commissioning phase such as follows:
1. Safety system and site safety team: it is essential for the success of
commissioning phase that the Safety system must be in place. During the
commissioning phase, there are still many activities that belong to the
construction phase. This makes lots of interfaces, confusion and
complexity while carrying out different type of activity in a area for
example pipe welding activity being carried out on pipe rack/ structure while
below the pipe rack, people performs loop checks for instrumentation or leak
test for sectional of piping, etc. Due to such activies, there are more
potential risk of incident like falling objects,
electrical short-circuit, working at height. Therefore the site safety
inspection team is vital for keeping safe situation at site.....To ensure the
work is in good order and workers strictly follow safety requirements,
management of each parties including subcontractors must strongly commit to
implement safety procedures at work, having enough and adequate Protective
Personal Equipment for every worker; Site safety team should go around the unit
routinely to check and identify any potential safety problem and stop such
action from happening. If necessary, a penalty shall be imposed for every party
who gets their staff violate such safety procedures.
2. Organizational structure that fits to the
Commissioning phase: To
have a suitable organization with full authority at site and proper
coordination procedures is a key for success of commissioning stage. During the
construction phase, EPC and Owner team may have different organization
structure to manage mainly subcontractors’ activities but when the
commissioning phase started, the organization must be modified accordingly due
to nature of the commissioning works. It should note that both EPC and Owner
must nominate the Commissioning Manager position who will take sole
responsibility and single contact point for any decision making related to the
commissioning.
3. Qualified and experience commissioning
staff in all disciplines:
having experienced staff who has several commissioning assignments will be the
key for success. They will share their experience with the rest of the team and
also advice on how to avoid similar commissioning problems that they faced with
in other projects. The experienced staff will lead the team to conduct the
required activities because they know exactly what to do and how to do it
following the general commissioning procedures and guidelines. It will take a
significant time and effort for any new staff to figure out the procedures and
handle plant activities for his first time therefore having experienced staff
in the team will help to reduce risk of schedule slippage, avoid common
problems and failures and help the team do it right first time.
4. Approval authority for site team for any
additional work: During
the commissioning of the plant with such complex like Dung Quat refinery, there
are lots of activities that can not refer to that of the contract’s
requirements or many new issues may raise, site modifications and new
engineering problem findings are very common and such matter must be discussed
and resolved quickly to move the project forwards. For that reason
Commissioning manager and its team must be authorized to take the decision
cross the table without any delay. If for any problem, item that has some
deviations from the contract the Commissioning team have to report to several
authority level for final approval, it will be very costly due to waiting time
before proceeding further. Sometimes the cost of delay due to pending approval
(normaly from the Owner site) has mush more significant than the cost of the
required changes in design or commissioning method itself.
5. Availability of Utilities: service water, electricity, instrument
air, plant air, nitrogen, steam and some chemical for chemical cleaning,
passivation of piping must be available at anytime in sufficient quantity to
meet the commissioning requirement. It was experienced that during the
commissioning phase of Dung Quat refinery project, there were several
electrical cut-off from the EVN net work that make the commissioning activity
interrupted and delayed the overall schedule. Service water must be also
continuously supplied to the refinery site at designate pressure and flow rate.
This water will be used for line flushing, cleaning, hydrotest of tankage and
piping section. The most consumption of such water is for hydrotest of takage,
where the Project has more than 50 tanks and each of those tank needs to filled
up with water for certain period then water will be pumped to other
tank repeat the same kind of test. For this reason, the water supply was
sometimes reached 30.000- 50.000 m3 per week for the period of two to
three months.
6. Work Permit System: Having proper Work Permit System in
place will ensure that work activities are in good order and sequence. It will
make sure a good channel of communication of several parties working in the
same area or sharing the same equipment. Work permit will ensure the review of
readiness stage before conducting any work at that section, interfaces will be
managed to avoid conflict of interest and rework, due to this level of control,
safety will be improved.
7. Coordination between EPC team and OWNER's
team: Owner team will
normally support EPC team for any commissioning activities. Any
misunderstanding between the two parties may have impact to the schedule,
that’s why a clear coordination procedure must be agreed and implemented.
8. Roles of daily coordination meetings: there are many activities happen daily
and new activities raise that require discussion and agreement before
conducting the work.
9. Equipment availability: commissioning equipment like crane,
vaccum trucks, portable pumps, instrument portable devices, tools, analyzers,
etc. must be available at any time for commissioning needs.
10. Maintenance workshop& its equipment
readiness: this will
ensure that many broken part of the equipment, material, etc. can be repaired
at the site workshop to save time of commissioning.
11. Commissioning Spare parts; Tools
& Materials availability: any spare part missing like flanges,
gaskets, bolt and nuts, mechanical seal, thermo couples, etc. that may takes
months to get it delivered at site therefore commissioning spares must be kept
in sufficient quantity at site.
Procedures
and systems, if not already in place, will be implemented to control and
minimize the spare parts and materials inventory to improve profitability.
However the refineries long term production output and efficiency will be
considered when determining basic needs and critical spares that must be
available for unforeseen breakdowns.
The
availability of spares remaining from the commissioning activities and those
ordered as two year operating spares as part of the EPC contract work will form
the basis for the initial stock.
Before
deciding which spares are required, criticality allocation and
quantity/stocking level determination will be made as indicated below:
- Review and quality check the Spare Part
Interchangeability List.
- Evaluate long lead items
- Repair/Replace philosophy
- Identification and lists of proprietary
items.
-
Aggregation of similar and standardized items across equipment (to ensure
optimization of supply).
-
Check warranty implications of using existing stocked components as spares
against new equipment.
-
Opportunities for alternative contract arrangements (Vendor stocking of spares,
spares sharing, maintenance service contracts etc.).
12. Ready stage from Construction phase-
Mechanical Completion:
for any section of Plant or unit, it must be mechanically complete before any
commissioning activities but note that between sections, there may be some
overlapped activities of construction and commissioning can do in parallel.
13. Detailed level III, IV schedule for each
Section and each disciplines: this
will help the team know exactly what to do next for each area, each disciplines
and can plan ahead and prepare for incoming activities.
14. Vendor technical representatives
availability: there are
many major equipment that EPC staff does not have a specialized knowledge to
commission the equipment first time that’s why it is mandatory to have vendor
representative at site to support and advice on commissioning and start-up of
such equipment like compressors, turbines, fired heaters, boilers, major
motors, major pumps, etc.
15. Quick resolution of Punch list and
outstanding technical issues:
from a public source of data, it is known that there are over 100.000 punch
list items found by EPC and Owner team
during the plant check and inspection against specifications and
requirements. It requires lots of time, effort, manpower and cost for fixing,
correcting, replacing, etc. such items. This is considered as most time impact
for the plant completion.
16. Availability of Commissioning procedures: without procedures, commissioning work
may be delayed, prohibited and more chance for mistake.
17. Access of Project database and Vendor
document: these document
must be available for reference, guidelines and also used for making
procedures.
18.Roles of good document control.
19. Rotation of shift work round- the- clock
concept: Commissioning
work is very time consuming and happen in continues manner so the activities
must be taken 24 hour a day and shift work is required.
20. Availability of sub-contractors: they will provide manpower, tool, and
equipment for commissioning therefore it is important to mobilize
subcontractors to work at site.
21. Impact of weather conditions: any rain, thunder storm, flood of water
at site will impact to the schedule. The commissioning if cannot avoid from
raining/ bad weather season, EPC and Owner must be aware and prepare for that
to minimize damages due to flooding or storm. As well as ensuring suitable
condition and schedule to work during the bad weather season.
Ongoing
for further discussions, I want to have identified the following areas of
critical importance to the safe and efficient operation of the Dung Quat
refinery:
·
Power
system reliability
·
Serious
problems in Demineralized Water Plant and Condensate Treatment Plant
·
Commissioning
and lack of availability of many on-stream analyzers
·
Inadequate
functioning of Dung Quat Refinery Laboratory, and the Laboratory Information
System
·
Problems
of performance and reliability of certain machines and valves – e.g. Crude
and Resid Pumps
·
Problems
of performance and reliability of equipment, instruments and communication
systems on Single Buoy Mooring (SBM)
·
Required
change-out of incorrectly specified steam traps
·
Organization
of Harbor Operations to meet the required berth occupancy
·
Construction
Non-Conformance Reports (NCR)/defects
·
Insufficient
availability of 2 year operational spares, and incomplete parts/materials
database for the operation of Dung Quat refinery warehouse;
·
Training
and other,…
The
initial assessment will consider items such as those above to ensure timely
correction of operational and maintenance issues that affect the ongoing
refinery operation.
Finally,
with the limit time, the author was not discussed all the problems in Pre-commissioning
and Commissioning phase in the thesis. Author wants all readers and colleagues
have practical suggestions and comments for the thesis are more effective.
Abstract
In
the process of industrialization and modernization in Vietnam, the construction
of Dung Quat Oil Refinery is considered an extremely important step to lay a
foundation for the spearhead industry of the country. Capitalized at over 2.5
billion USD, the Dung Quat Oil Refinery Project will effectively meet the
demands on jobs, shifting the economic structure, increasing the State budget
and developing other services of the locality during the construction and
operation periods. The construction of Dung Quat Oil Refinery also encourages
domestic and foreign investors to invest in Dung Quat Economic Zone in the
fields of chemical industry, engineering, manufacturing and installation
industry, ship building and repairing, steel refining and laminating,
transport, electronics, processing and other industries. With its scale and
significance Dung Quat Oil Refinery is considered the heart of Dung Quat
Economic Zone.
The
formation and implementation of the project on Dung Quat Oil Refinery, the
first of this kind in Vietnam, have lasted many years and experienced through
different periods and with various forms of investment. The decision to build
Dung Quat Oil Refinery with Vietnam’s own investment in 2003 showed the great
determination of the Vietnamese Party and State in the strategy to ensure national
energy security and promote national industrialization and modernization.
Deeply aware of the project’s significance and with responsibility of an
investor, Vietnam National Oil and Gas Group has been concentrating all sources
on the management and supervision of the project to ensure construction of the
refinery to be completed on schedule, safely and with high quality.
This
study will also discuss on point of view and how to managing the
pre-commissioning and commissioning phase for the EPC contract of DungQuat
refinery project that can be happened during the project execution phase.
