Justifying an Integrated Offsites Operations Approach

Last week, we cautioned about the use of obsolescence in developing an automation modernization project justification. Sticking on the theme of justification, I received a copy of a presentation, Tank Farm and Terminal Automation: Developing a Business Case. Emerson’s Patrick Truesdale gave this presentation at the 2008 NPRA Annual Meeting.

For those not familiar with tank farms and terminals, they are known as Offsites operations in the industry vernacular. These Offsites operations provide receiving, shipping, and storage facilities for hydrocarbon liquids and gases processed or produced by refineries and petrochemical complexes.

Typical units include tank farms, blenders, and terminals. The terminals handle truck, rail, marine, and/or pipeline-based transport. For a consumer product like gasoline, the terminals are the spot where the gasoline tankers fill up before delivering the gasoline to the gas stations where you fill up your automobile.

Historically, these Offsites have had a piecemeal approach to automation with disparate controls for custody transfer, loading and unloading, blending, and vapor recovery to name a few processes. Making decisions requires tracking down information from many places. Also, for these Offsites facilities in mature markets, operations personnel with this knowledge are approaching retirement age.

Other challenges are the increasing regulatory compliance reporting such as Sarbanes-Oxley in the U.S. and greenhouse emissions regulations in many countries. These regulations have also increased the number of fuel additives and alternative fuel mixes such as ethanol and biodiesel.

Patrick sees the justification opportunity for taking an integrated Offsites operations in increased revenues, reduced working capital, increased capacity, and reduced direct and variable costs. The integrated approach streamlines the business process from production planning where the production orders occur to the work preparation phase where these production orders are prepared. The work details that come out feed the work execution phase where the production orders are executed, followed by the production accounting phase where the production order is completed and performance monitoring steps taken.

These business processes can be integrated based on the ISA95 enterprise-control system integration model, which helps eliminate many of the manual operations including manual data collection and reporting. This integrated approach adds movement control and gentry control on top of the automation system performing the regulatory control across all the processing units. Hydrocarbon movement scheduling is performed above the movement control level. It connects with the order management and production accounting systems. Likewise, slot-blocking operations are performed above the gentry control. They also connect with the order and accounting applications.

The justification process begins by benchmarking current performance in the areas of process unit, tankage, and loading/unloading asset utilization rates. Revenues can be improved by integrating the flow of information on process units such as crude units, cokers, FCCs, HCUs, and Reformers as well as tankage and loading/unloading areas.

Margins can be improved by increasing yields especially on high-value products. Reducing losses in better custody transfer measurement, unaccounted losses, quality giveaway, and lower contamination also improves margins. Improved schedules also reduces demurrage costs.

Soft costs to aid in the justification can be found in reduced fuel and hydrogen consumption, increased staff productivity, and improved supplier/customer relations through more efficient and effective scheduling. Once the benchmarking and expected benefits are tabulated, they should be broken into distinct project phases and prioritized base on projected return on investment. This helps manage the scope and execution of these modernization efforts.

For Offsites operations with piecemeal regulatory controls and manual work processes, Patrick has seen terminal handling efficiency increase 20%, truck turnaround times reduced 33%, annual maintenance costs reduced 60% compared to industry average, and equipment availability exceed 99.7%.

GreenPodcast.gif MP3 | iTunes

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Leave a Reply