Planning for a refinery turnaround

A consistent approach, coupled with an aligned team, leads to successful preparation at the front end of a turnaround.

T.A. Cook

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Article Summary

Preparing for a refinery turnaround is no easy task. Large, medium or small, all turnarounds can be challenging, and some require years of thought and debate before actual event planning can even begin. And that can often be the easy part. Once timing is decided, things become even more hectic and can easily spiral out of control. The following article will provide a view on some of the key elements that go into planning a turnaround, from the importance of a forecast model to leadership training the week before execution starts, and why a standardised approach is the key to being successful.

Long term strategy
Does a refinery begin planning for a turnaround two years before execution is scheduled to begin? The quick answer might be yes. Event specific planning might begin at that time, but long term strategic planning should begin well in advance of those two years, and in most cases several years in advance of when it will actually be executed. Having a five year forecast is a necessity, but 10 years is even better. This outlook provides all levels of the company, from the C-suite to each individual plant, with a realistic overview of the potential impacts that each event may have on the entire company. I am not talking about an entire event’s scope being defined that far in advance. But what I am talking about is an outline of when each site thinks it will need to execute its turnarounds. Sure, specific dates and exact durations for events five to 10 years into the future will not be exact, but historical data can be used as a starting point. And the window from current day to five years into the future should be a little easier to predict, especially with organisations looking to extend run times to five or six years when possible. Either way, a corporate turnaround forecast that outlines when these events might occur is required to be able to maximise profits and minimise losses.

According to the US Energy Information Administration, in the first five months of 2018 US refiners produced on average almost three times more finished gasoline products, which include finished motor gasoline (for spark ignition engines contained in automobiles) and distillate fuel oil (such as diesel for automobiles, locomotives and agricultural equipment) than all other finished products. For the last full year of data – 2017 – the number is about the same – 74% – for these two types of products (see Figure 1). In early August 2018 the same agency stated that the amount of motor gasoline delivered in the US is expected to match the record high of the last two summers. With that, profit margin on gasoline and diesel is up sharply over the past year, and for the second quarter of 2018 it averaged over $21 per barrel. This spells opportunity for refineries. Instead of scheduling turnarounds after the summer months, as some typically do, they may consider deferring work (in order to reduce duration) to take further advantage of current market conditions. In this case that is a good thing. But there are many geopolitical events around the world that could have negative impacts as well. Russia, China and the Middle East are all a factor, as are new tariffs that are being imposed. Having that system wide refinery roadmap, and understanding what is driving each event, can help navigate the unpredictable world that we live in today. The ability to make educated decisions in a relatively short amount of time can greatly impact results on profitability.   
Having a long range forecast is also necessary for other reasons. Due to an event’s cost (hundreds of millions of dollars in some instances) and duration (lost profit occurs when the unit is offline), a company must be aligned several years in advance to even conceive and plan for the notion of a turnaround. Corporate executives will likely want to know the potential cost, return on investment and impact on profits (and shareholders). Site leadership will likely focus on the potential impact to the site itself, including impacts on the current (contract) labour force and whether or not current staffing levels (own resources) are sufficient for proper event planning. This long term forecast should provide an adequate window to help alleviate some of these concerns, and provide all levels of leadership with some clarity of the challenges that they will face in the future.

Standardised approach to the front end loading (FEL) phase
Once the date for turnaround is set, event planning must begin. Earlier I mentioned that the turnaround forecast is a roadmap, and can be an invaluable tool in managing system wide events. A different roadmap that should be used to manage every singular event, is a Turnaround Handbook. I know what you may be thinking: “We have a 500 page turnaround manual and nobody has read it because it’s so big” and “Why do I need a handbook – I’ve been managing turnarounds for 10 years now.” Yes, you need a handbook. And secondly, the handbook cannot be complicated. A Turnaround Handbook is a tool that helps the entire organisation prepare for the event. It is that easy. If it is 500 pages it is too large. An effective handbook’s primary function is to be a roadmap for event preparation – what needs to be done, when it needs to be done by, and who needs to do it. It creates clear accountability and ensures that all key departments are aligned and know exactly what they need to produce to ensure that preparation for the event is on track. And best of all, once it is developed and signed off on (by all of those people who will be held accountable for input in the future), it is a tool that can be used for every event. Can modifications and updates be made? Sure they can, but they must be approved by all relevant stakeholders to ensure their impacts are understood. Note that a handbook that provides a holistic approach to the entire turnaround lifecycle will also cover execution and post-turnaround activities.

The handbook itself cannot be overcomplicated. I have seen a 500 page version and it was not user friendly nor was it utilised for the event I was supporting. There are a few key topics that are a necessity. The first should be an introduction as to why the handbook is important to the entire organisation. (It should be implemented at all sites.) This introduction should provide a clear message to each site that the activities and methodologies within the handbook will be followed by all of those involved. While simple, this message aligns the team to ensure that turnaround preparation is completed on schedule. A section on governance supports that message at the site level. Scope development and management and risk management processes are other topics that should be included. A section to determine event complexity can be used to allot the proper FEL timeframe. If event complexity is unclear, so is the window in which to prep. For instance, a turnaround with a high percentage of capital work will tend to be more complex, necessitating a longer period to prepare (see Table 1). Additional inputs to determine complexity can include total execution window manhours, quantity of resources and the potential for discovery work. Whatever the complexity scale is, it will likely provide the basis for the most important item in the handbook, the milestone schedule.

The milestone schedule is a list of all key activities that must be completed prior to the execution of a turnaround. It is typically broken down into four or five FEL phases, depending on which best suits the company. I prefer four, which include: strategy, scoping, planning, and pre-turnaround. (Two additional phases – execution and post-turnaround – support the event and event closure.) Regardless of the number, each contains major milestones and the associated activities that must be completed. (Though not typically indicated, some organisations may also create intermediate milestones and due dates to increase transparency during the FEL timeframe.) Each activity and milestone must have a due date and an owner assigned to it. FEL windows run anywhere between 12 months for a low complexity event and 30 months for a high complexity event. Twelve months is not much time, and this shorter preparation window can in itself add to event complexity if it is not considered ahead of time (hence the need for a long term forecast). Table 2 is an example of what a milestone schedule could look like, with associated T-minus due dates before execution and T-plus date after execution. (One used for an actual event would provide additional detail, such as description of each milestone, additional activities that support milestones, person assigned, and expected completion date.) Keep in mind that regardless of the complexity of the event, the same activities will usually have to be completed.    
Key elements of front end loading
Each phase of the FEL timeframe consists of several important activities. I will review several of the most critical.

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