RISK BASED INSPECTION QUALIFICATIONS

Aptech Engineering Services, Inc.

16100 Cairnway Drive, Suite 310 Houston, TX 77084 832-593-0550 www.aptechtexas.com aptechtexas@aptecheng.com

AES093 Rev 1

TABLE OF CONTENTS
Section 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Page

The Company .................................................................................................. 1-1 Asset Integrity Management .......................................................................... 2-1 Risk Based Inspection Introduction .............................................................. 3-1 Risk Based Inspection Experience and References .................................... 4-1 RDMIP Methodology ....................................................................................... 5-1 RDMIP Approach ............................................................................................. 6-1 Software ........................................................................................................... 7-1 Options for Implementation ........................................................................... 8-1 Deliverables and Reporting............................................................................ 9-1 RDMIP Training ............................................................................................. 10-1 Compliance.................................................................................................... 11-1 Benefits .......................................................................................................... 12-1 Asset Management........................................................................................ 13-1 Why Aptech? ................................................................................................. 14-1 Conclusions................................................................................................... 15-1

ALL RIGHTS RESERVED. Material contained herein may not be copied by hand, mechanical, or electronic means, either wholly or in part, without express written consent by Aptech Engineering Services, Inc.
(DLN: 03D039R1)

AES093 Rev 1

Section 1 THE COMPANY

Aptech Engineering Services, Inc. (APTECH) is an internationally recognized engineering consulting firm specializing in performance optimization of equipment and the prediction and extension of condition assessment, risk analysis, performance optimization, and the extension of remaining useful life of equipment. Our engineers and operations specialists have helped a wide variety of clients achieve optimum equipment performance either through improved operating techniques and methods or by cost-effective changes or additions to design. In the past 25 years, APTECH has successfully completed over 6,000 separate projects for over 1,500 clients throughout the United States and abroad. Our clients, many of whom return to APTECH for repeat services, come from numerous business sectors, including oil and gas (both onshore and offshore); chemical/petrochemical companies; municipal and investor owned utility companies; fossil and nuclear utilities; EPRI; GRI; manufacturing and equipment vendors in the aerospace, automotive, electronic sectors, and construction firms; legal firms and insurance companies; and, various public sector and institute clients. APTECH currently has 50 full-time employees and approximately 80 part-time employees engaged in projects spanning the following industries: Fossil Power Nuclear Power Petroleum and Chemical Industry Litigation and Insurance Support General Industry APTECHs corporate office is in Sunnyvale, CA (San Francisco Bay Area) with regional offices in Houston, TX; Charlotte, NC; Upper Marlboro, MD, and Palm Beach Garden, FL. In addition, APTECH has representatives in many countries worldwide, including South Africa, Taiwan, Japan, Indonesia, China, Russia, Singapore, and India. Our offices are staffed by senior project management and performance analysts, engineers, mechanical, and nondestructive examination (NDE) personnel, allowing us to respond quickly to our clients' needs in any geographical location. The use of advanced assessment, control, and management technologies is required to determine the best solutions to minimize capital, operations, and maintenance costs of facilities while maintaining safety, reliability, and productivity. APTECH provides value-added services to industry by using advanced technology and world-class expertise to solve problems and help our clients gain a competitive edge. Our expertise in metallurgy, structural analysis, stress analysis, fracture mechanics, welding, corrosion, heat transfer, nondestructive examination, safety, and risk and/economic analysis ensures that decisions are based on the most reliable evaluations

AES093 03D039 Rev 1 R1

1-1

available. APTECH maintains a complete in-house metallurgical and mechanical test laboratory, extensive computer capabilities, and the resources to perform specialized materials testing. Worldwide competition is forcing many industries to take a hard look at how to minimize capital, operations, and maintenance costs of facilities while maintaining safety, reliability, and productivity. The use of advanced assessment, control, and management technologies is required to determine the best solutions. APTECH provides value-added services to industry by using advanced technology and world-class expertise to solve problems and help our clients gain a competitive edge. APTECHs expertise in metallurgy, structural analysis, stress analysis, fracture mechanics, welding, corrosion, heat transfer, nondestructive examination, safety, risk analysis, reliability centered maintenance, and financial risk/economic analysis ensures that your decisions are based on the most reliable evaluations available. APTECH maintains a complete in-house metallurgical and mechanical test laboratory, extensive computer capabilities, and the resources to perform specialized testing. For risk assessment studies, APTECH commonly uses a combined approach of deterministic engineering analysis with statistical analysis. System and component analysis often calls for a team of specialists including the following disciplines: Thermal-hydraulic analysis Hydrodynamic analysis Stress analysis (static and dynamic) Fracture mechanics analysis Vibration analysis

CORPORATE ORGANIZATION APTECH is organized into several mission-focused divisions, each reporting to the President and Chief Executive Officer. Within the Engineering and Research Division, the various technical disciplines report to the Vice President of Engineering. Project teams are created as needed from the Engineering Division. APTECH uses the matrix management approach to ensure properly trained and experienced personnel are available to provide timely project support. Many of our contracts involve quick response, with one or more professional staff members on site within a matter of days. The duration of such activities can range from a few weeks to several years. APTECH uses a formal project structure for the basic team and a matrix management system for supporting technical and administrative services. Many of our highly technical projects involve risk assessment and risk management, as well as the diagnosis and correction of known or anticipated questions of structural integrity of process system components.

AES093 03D039 Rev 1 R1

1-2

SOFTWARE TOOLS APTECH has an extensive database of software tools that are used on different projects. Some of these tools have been specially developed in house, or others are commercially available programs that APTECH uses for specific clients. Some of these software tools include: PREFIS Fitness for Service Faceup TFDGEN RUL SW LFRAC Balife RDMIP Pipeline Integrity Management Programs

STAFF Performance analysis, reliability, life prediction, and damage assessment require a diverse combination of technical disciplines. APTECH's staff has this combination. Our staff cover operational testing, maintenance optimization, and performance optimization, as well as the classical disciplines of structural design, metallurgy, stress analysis, fracture mechanics, fatigue, welding, corrosion, thermodynamics, heat transfer, materials selection and fabrication, and NDE. The following is a list of key employees and their qualifications and disciplines.

AES093 03D039 Rev 1 R1

1-3

PERSONNEL QUALIFICATIONS
Name
Adams, Bob

Qualifications
A.S., Materials Technology B.S., Metallurgical Engineering P.E. Metallurgical Engineer, California (MT1786) M.S., Mechanical Engineering, Energy Studies B.S., Mechanical Engineering B.S., Physics & Chemistry M.S., Materials Science B.S., Marine Engineering Nondestructive Testing of Metals C-School (highest level) graduate, equivalent to Trade School degree Hull Technician A-School (apprentice level) B.S., Mechanical Engineering M.S., Mechanical Engineering P.E. Mechanical Engineer, California (M17973) B.S., Mechanical Engineering M.S., Mechanical Engineering Ph.D., Mechanical Engineering B.S., Physical Metallurgy M.S., Engineering P.E. Civil Engineer, California (C38007) Nuclear Quality Assurance Lead Auditor, USA (ASNI N45.2.23) P.Eng., Canada (M68997) B.S., Physics B.S., Mathematics P.E. Mechanical Engineer, California (M26448) AWS Certified Welding Inspector, USA (AWS 97120771) B.E., Mechanical Engineering D.I.C., Mechanical Engineering Ph.D., Applied Mechanics B.S., Physics M.S., Ocean Engineering B.S., Mechanical Engineering P.E. Civil Engineer, California (C30451) P.E. Mechanical Engineer, California (M27802) AWS Certified Welding Inspector, USA (AWS 97120831) B.S., Mechanical Engineer B.S., Chemical Engineer M.S., Chemical Engineer Ph.D., Chemical Engineer B.S., Metallurgical Engineering M.S., Materials Science P.E. Metallurgical Engineer, California (MT1853) AWS Certified Welding Inspector, USA (AWS 97120891)

Years of Service
27

Agan, Dwight Anderson, Steve Burnett, Tom Christi, Don

15 15 32 10

Cipolla, Russ

35

Clark, Kimble

35

Cohn, Marvin

25

Cronin, Mike

25

Egan, Geoff

35

Grimsrud, Paul Grover, Jeff

30 28

Hara, Kevin Kohan, Steve

25 30

Kuntz, Todd

15

AES093 03D039 Rev 1 R1

1-4

Name
Lindsay, Phil

Qualifications
B.S., Metallurgical Engineering M.S., Metallurgy P.E. Corrosion Engineer, California (CR349) P.E. Manufacturing Engineer, California (MF1096) B.S., Metallurgy A.S., Welding & Technology B.S., Metallurgy & Welding Engineering M.S., Metallurgy & Materials Engineering AWS Certified Welding Inspector, USA (AWS 97120921) B.S., Engineering P.E. Corrosion Engineer, California (CR687) B.S., Mechanical Engineering M.S., Mechanical Engineering P.E. Mechanical Engineer, California (M20112), Nevada (014786) Certified Fire & Explosion Investigator, National (NAFI 50451274) BATC Refinery Process Safety Orientation, California B.S., Mechanical Engineering Certified EIT, Pursuing PE licensure B.S., Metallurgical Engineering P.E. Metallurgical Engineering, California (MT1771) Hazardous Waste Operations & Emergency Response Training (29 CFR 1910.120) BATC Refinery Process Safety Orientation B.Sc., Metallurgical Engineering P.Eng., Alberta, Canada (M61653) API 653 Inspector (#6427) B.S., Mechanical Engineering M.S., Mechanical Engineering B.S., Chemical Engineering B.S., Chemical Engineering P.Eng, Texas (#42664) B.S., Business Administration

Years of Service
30

Moser, Dick Paterson, Steve

34 23

Rettig, Terry Schreiber, Dick

32 27

Sitton, Ryan Sulllivan, Eric

15 20

Sutherland, Cory

15

Torbov, Steve Tran, Hung Traylor, Shelby Witte, Bill

39 8 30 25

AES093 03D039 Rev 1 R1

1-5

Section 2
ASSET INTEGRITY MANAGEMENT

The APTECH Petrochemical Group is a division of APTECH Engineering Services, Inc. and is located in Houston, Texas to provide a direct focus on Asset Integrity Management solutions to the process industries. Our projects around the globe have raised the performance of our clients facilities so their assets are performing at optimal capacity. This is achieved by using industry best practices driven by the latest technologies and innovative strategies. In addition, APTECH has developed software solutions such as the Risk Directed Mechanical Integrity Program (RDMIP) for use in Risk Based Inspection programs around the world In the future, facilities will have comprehensive, fully integrated systems and culture directed at gaining greater lifetime effectiveness, value, safety, availability, profitability, and return from production and manufacturing assets. APTECH can help your organization, plant, or facility achieve these goals. The APTECH Petrochemical Group provides asset integrity management services to the following industries: Offshore and Shipping Pipelines Chemical and Petrochemical Refineries and Gas Processing LNG and LPG We provide asset and life management support to infrastructure, facility, and equipment through conception, design, construction, commissioning, operations, and decommissioning phases of a facility. The following key services are offered: Inspection (Advanced Technologies) Maintenance (Reliability, Predictive and Preventative Strategies) Operational and Process Support (Operating Windows) Risk Analysis and RBI Process Safety and Mechanical Integrity Services IT Support (Software Tools) Management Strategies Business and Financial Modeling Training in Industry Codes, Standards, and Regulations

AES093 03D039 Rev 1 R1

2-1

Benefits of such a comprehensive asset integrity management program include: Maximizing Reliability, Availability, and Maintainability of Equipment Improving Safety and Reducing Risk Enhancing Plant Performance and Profit Reduction In Maintenance and Inspection Costs Process Optimization and Operational Control Improving Personnel Safety and Performance Optimizing Sparing Compliance with Corporate and Industry Regulation and Legislation

AES093 03D039 Rev 1 R1

2-2

Section 3 RISK BASED INSPECTION INTRODUCTION

Traditional inspection programs consist of baseline inspections and documentation on all equipment. Field inspection data are used to determine degradation mechanisms, corrosion rates, and the RUL of equipment. These programs are both costly and time consuming since resources are not focused on high-risk items, particular damage mechanisms, and specific inspection techniques. RBI philosophy is now being recognized in the USA and elsewhere as an alternate methodology for the planning and implementation of inspection and maintenance programs. The American Petroleum Institute (API) and others have recognized this approach as a means of determining inspection scopes and intervals. APTECH has extensive experience in the development and implementation of these cost-effective inspection and maintenance programs. The purpose of risk ranking equipment is to provide the basis for a riskdirected inspection program where maintenance resources (time and money) can be optimized in the inspection program. The optimization of limited resources based on risk will result in safer, more reliable plant operations. Both the likelihood of failure (LOF) and the consequence of failure (COF) are evaluated for each equipment item. The LOF and COF ratings for each fixed equipment item are multiplied to achieve a combined risk ranking. The results are placed into a matrix for inspection planning purposes. This is the first step in prioritizing the Inspection and Maintenance Planning program. APTECH can take this information and develop risk matrices, summary reports, and specific inspection plans for each equipment item studied. These reports will include possible damage mechanisms for each equipment item, recommended inspection techniques, and the scope and frequency of scheduled inspections. The results of the risk-ranking process can also provide additional information that can be used for allocation of resources and establishing relative priorities for some or all of the following types of activities: Inspection, maintenance, repair, or replacement Reliability studies Risk management and the addition of safety features and alarms Procedures and training improvements Refinements in operations, process parameters, or equipment design The information developed can also assist in improvement of contingency plans, backups, and emergency response plans.

AES093 Rev 1 1

3-1

RBI studies constitute a first step in the practical application of risk management concepts to focus maintenance and inspection activities. It has been shown that this approach can save a plant considerable time and money in the short term, as well as in the long term. By conducting the correct inspections, using the correct inspection techniques, and carefully documenting the inspection findings, a facility can reduce the overall risk associated with equipment items and improve plant reliability. This will result in a safer more reliable plant, which operates cost effectively. A risk assessment is the process of gathering data and analyzing information in order to develop an understanding of the risk of a particular process. Three basic questions are considered to establish the basis for defining risk as follows: What could go wrong (scenario or event)? How often might it happen (likelihood)? What are the effects (consequences)? Risk may in its most simple form be characterized as the product of probability of a given failure event, (LOF) and the consequences of that event, (COF). Risk is the combination of the frequency of some event occurring and the consequences, generally negative, associated with that event Risk assessments can be qualitative, semi-quantitative, or quantitative. Generally, these assessments are denoted as Level I, II, and III assessments. Qualitative answers are often sufficient to make robust decisions, but as more detail is required, more quantitative methods are necessary in order to make difficult risk decisions. The level of information necessary to make decisions varies widely. After identifying the hazards, qualitative methods for assessing the frequency and consequence are often satisfactory to enable the risk analysis to be completed. In other cases a more detailed analysis will be necessary. There are many different analysis techniques and models that have been developed to aid in conducting risk assessments; many of these techniques have been developed by the aerospace and nuclear industries. The key to conducting a successful risk analysis is as follows: Choose the correct method for the particular problem at hand, or choose the appropriate techniques to achieve corporate goals.

AES093 Rev 1 1

3-2

Section 4 RISK BASED INSPECTION EXPERIENCE AND REFERENCES

APTECH maintains a staff of recognized experts in metallurgy, RBI, plant inspection programs and process safety management (PSM), among other things. APTECH developed the "Mechanical Integrity Supplement to the Maintenance Excellence Guide" under contract to CMA for the Responsible Care Program. With respect to RBI, we began developing RBI technology and software tools in the mid-1990s and offer one of the leading software products in this field. The APTECH Houston office has a team of dedicated engineers who have many years of experience at RBI implementation. This implementation has included the APIs methodology, APTECHs in-house program, Risk Directed Mechanical Integrity Program (RDMIP) and other commercial RBI programs. APTECH is also a member of the API RBI task force and has followed all API RBI activities with great interest. Because of this wide range of RBI experience, APTECH personnel can evaluate what programs are suitable and applicable for each clients needs. APTECH personnel who have implemented RBI programs include experienced data clerks who are familiar with refinery operations and documentation. Process engineers who are experienced in refinery unit operations are used to conduct the COF evaluations, and experienced metallurgists or corrosion engineers are used to conduct the LOF. The Houston office has qualified corrosion experts who have many years of refinery experience and are familiar with all degradation mechanisms and corrosion problems associated with the petrochemical industry. In addition to this, APTECH has engineers who regularly conduct Level II and Level III RUL and fitness-for-service evaluations (FFS) (API 579). These personnel are used if the RBI analysis and subsequent inspections merit such evaluations. Additional information regarding our experience and skills may be found on our website at www.aptecheng.com or www.aptechtexas.com. APTECHs August 2, 1999 article in the Oil and Gas Journal entitled, Risk Based Methods Optimize Maintenance Work Scope and The Implementation of RBI Programs published in the January 2002 Hydrocarbon Processing magazine are informative on the overall approach process and benefits. APTECHs approach meets the requirements of APIs API 510, API 570, and API 580, and generally accepted good engineering practices. It is anticipated that over the next five years 80% of the facilities that could take advantage of RBI technologies will be implementing programs to realize the significant benefits. Our article on Process Plant Maintenance, which was also published in the Oil and Gas Journal in May 2000 provides additional information on benefits of our RBI approach.

AES093 Rev 1

4-1

Over the past seven years APTECH has: Analyzed over 25,000 pieces of fixed equipment, piping and pumps Developed an extensive database of units, processes, and equipment items Completed approximately 25 projects worldwide United States, South Africa, South Korea, Australia, Europe

Conducted RBI projects on refineries, gas plants, and chemical plants Interacted with regulatory authorities in Tennessee, South Africa, and Australia Completed RBI training, technology transfers, and turnkey projects

AES093 Rev 1

4-2

PARTIAL LISTING OF RISK AND RELIABILITY ANALYSIS PROJECTS

CLIENT Alcoa - Australia PROJECT DESCRIPTION Pinjarra Power House Reliability and Risk Modeling Pinjarra Boiler Feedpump Reliability Study UNIRAM Reliability Study Caltex Oil (SA) (PTY) Limited Purchase APTECHs Risk Directed Mechanical Integrity Program (RDMIP) Software and Consulting Services Risk Assessment of Storage Tank Generation Reliability Improvement Program (GRIP), Phase 1 Planning Purchase RDMIP Corporate License RDMIP Engineering and Consulting Services ENGEN - A Division of Engen Petroleum Assistance with Engens RDMIP Purchase User License for APTECH's RDMIP Software Equipment and Piping Modules Version 1 and Support Services Risk Assessment Workshop and International Training Mechanical Integrity Implementation Conduct Mechanical Integrity Gap Analysis for the Hampshire Chemical Plant in Owensboro, KY Risk Assessment, Materials Selection for Handling Hazardous Gases Inspection Management System for Stationary Equipment RDMIP Services and Consulting. Perform RBI Study on Vessels and Tanks-D-107, D-1001, D-1002, D1204, D-208, D-210, and T-201. Inhouse Training on Mechanical Integrity and Risk Based Reliability Process Safety Consulting and Operational Integrity Management System KJBC Reliability and Safety Program Komag Company Risk Management and Prevention Program

CH2M Hill Hanford Group City of Austin Eastman Chemical Company Tennessee Eastman Division

Environ Corporation USA H.B. Fuller Company Hampshire Chemical Corporation Hewlett Packard Company Huntsman Chemical Company Australia PTY Limited Huntsman Chemical Company

IIR Holdings Ltd. Kaiser Aluminum Corporation

AES093 Rev 1

4-3

CLIENT Marathon Oil Company Niagra Mohawk Power Corporation Oman India Gas Pipeline

PROJECT DESCRIPTION Reactor Vessel Risk/Integrity Assessment Chemical Risk Assessment and Prevention Program Construction and Operations Phase Risk Analysis (1100 km of Subsea Piping) Subsea and Onshore Reliability Analysis Risk and Reliability Presentation Support Oman-India Pipeline Risk Analysis Including Hazard Identification, Risk Assessment, and Risk Management Process Risk Analysis Study Risk Based Prioritization of Life Extension Program Issues at LNG Plant Risk Based Prioritization of Equipment for Life Extension at Acetocyanahydrine Unit (Approximately 2000 equipment items) UNIRAM Availability Assessment Purchase of RDMIP Software, License, and Installation, and RDMIP Training Safety and Reliability Assessment Project RDMIP Implementation and Consulting Services

Occidental Chemical Company P.T. Badak Rohm & Haas

Samsung General Chemicals Company, Ltd. SK Chemicals (Formerly Yukong Limited)

Suncor, Inc.

Reliability Investigation of Generator Retaining Rings Reliability and Maintainability Analysis of Plant 37 Reliability and Maintainability Analysis of Water Treatment Plant Reliability and Maintainability Analysis of Suncors Millenium Project Probabilistic Risk Analysis, Browns Ferry Plant Covered/Excluded I&C for Refinery Equipment Risk Ranking for BHP Phase 2

Tennessee Valley Authority Tesoro Petroleum Hawaii (Formerly BHP Hawaii, Inc.)

AES093 Rev 1

4-4

CLIENT Tesoro Petroleum Hawaii (Cont.d) (Formerly BHP Hawaii, Inc.)

PROJECT DESCRIPTION Pilot Risk Ranking Project Total Plan Fixed Equipment Risk Directed Inspection Planning Project

Texas Utilities Generating Company TUV Suddeutschland VICO Services, Inc. Washington Public Power Supply System Westinghouse Savannah River Wilfred Baker Engineering

Risk Based Prioritization of Materials Change-out, Comanche Peak Plant Purchase of RDMIP Software Data Transfer into RDMIP Risk Based Maintenance Prioritization, LNG Plant Chemical Risk Assessment and Prevention Program Risk Assessment Study, K-Reactor Risk Based Adjustment of Siting Assessment Quantitative Risk Analysis of Heat Exchangers

Williams Refinery LLC (Formerly MAPCO Petroleum, Inc.)

RDMIP for MAPCO Petroleum, Inc.

AES093 Rev 1

4-5

PARTIAL LISTING OF RISK BASED INSPECTION PROJECTS

(*Designates Refineries)

CLIENT
Ammonia Plant (Completed Under Client Attorney Privilege) Bariven, S.A., PDVSA Services, Inc. Caltex Oil (SA) (Pty) Limited* Coastal Aruba Refining Company N.V.* (Formerly El Paso Corporation) Companhia Portuguesa de Producao de Electricidade, S.A. Eastman Chemical Company* Tennessee Eastman Division

PROJECT
Risk Based Inspection Program and Assistance with Siting Calculations (20 Fixed Equipment Items and Piping) Technical Assistance in Mechanical Integrity and Risk Based Inspection Program Risk Based Inspection Pilot Program (100 Fixed Equipment Items) Risk Based Inspection Pilot Study Using API Methodology (100 Vessels and Related Piping) Risk-Based Workshop in Portugal Risk Directed Mechanical Integrity Program (RDMIP) Corporate License Risk Based Inspection Program of Fixed Equipment (3,000 Fixed Equipment Items) Risk-Based Piping Inspection Pilot Program Risk-Based Inspection Support for Tennessee Eastman Division Risk Based Inspection Program (600 Fixed Equipment Items and Piping) Risk Based Inspection Program and Turnaround Planning (40 Vessels) Risk Based Inspection Program at 7 Facilities (1,500 Fixed Equipment Items and Piping) Risk Based Inspection Program and Mechanical Integrity (700 Fixed Equipment Items) Risk Based Inspection Study of 600 Vessels at A&O Plant Risk Based Inspection Study of 400 Vessels at P&O Plant Purchase RDMIP Software Perform Risk Based Inspection Study at the Propylene Oxide and Methyl Tertiary Butyl Ester Plant in Port Neches, Texas Risk Based Inspection Survey Risk Based Inspection Program Audit (50 Fixed Equipment Items) Development and Implementation of Inspection and Maintenance Program at Gas Filling Plant Risk Based Inspection Pilot Study

Engen A Division of Engen Petroleum* EOTT Energy/Enron* H.B. Fuller Company Huntsman Chemical Company Australia Pty Ltd Huntsman Chemical Company

Japan Tech Services Corporation Jose Cryogenic Plant, PDVSA, Venezuela Kuwait Oil Tanker Co. S.A.K. Marathon Ashland Petroleum LLC*

AES093 Rev 1

4-6

CLIENT
Occidental Permian LTD* (Formerly Altura Energy)

PROJECT
Risk Based Inspection Study and Inspection Planning Report Risk Based Inspection Program for 4 Gas Plants Using API Methodology (2,000 Fixed Equipment Items and Piping) Development of Procedures for Inspecting Fixed Equipment Risk Based Inspection Program (450 Fixed Equipment Items) Assist with Preparation for RBI State Board Hearing Risk Based Prioritization of Life Extension Program Issues at LNG Plant (Trains A and B) Risk Based Prioritization of Equipment for Life Extension for Acetocyanahydrine Unit (Approximately 2,000 Equipment Items) Risk Based Inspection Study of Styrene Unit Risk Based Inspection Management and Implementation

Phibro Energy USA Premcor Refining Group Inc.* (Formerly Williams McKee Refinery)

P.T. Badak Rohm & Haas

Samsung Autofina Chemical (Formerly Samsung General Chemicals)

Sasol Condea Vista* SC Johnson Wax SK Chemical Company LTD* (Formerly Yukong Refinery, Ltd) SK Chemical Company LTD* (Formerly Sunkyong Industries) Star Enterprises Sunoco - Aristech Neal Plant* (Formerly Aristech Chemicals) Tesoro Petroleum Hawaii* (Formerly BHP Hawaii Refinery, Inc.) Tesoro Refining & Marketing Company*

Risk Based Inspection of Ethylene Unit (200 Fixed Equipment Items) Demonstration Project on Risk-Based Inspection Safety Assessment of Category A Equipment for SK Corporation, HOU Plant (300 Fixed Equipment Items and Piping) Risk Based Inspection Program and Safety Assessment (450 Fixed Equipment Items and Piping) Risk Based Inspection Procedures, Butane Sphere Risk Based Inspection Study Risk Based Program of Fixed Equipment and Inspection Program Management (650 Equipment Items and Piping) Risk Based Inspection Study (100 Turnaround Vessels) Risk Based Inspection Pilot Study (10 HF Alkylation Vessels and Perform Fitness-for-Service Evaluation on 3 Vessels.) Conduct Risk Based Inspection on 104 Pieces of Equipment Provide Engineering Services and Conduct Risk Based Inspection Study

Williams Refining LLC

Risk Based Inspection Analytical Services to Develop Equipment Risk Ranking and Specific Equipment Inspection Plans

AES093 Rev 1

4-7

APTECH CLIENT REFERENCE LIST

Project Type
Risk Based Inspection

Client
Eastman Chemical Company* Tennessee Eastman Division

Project Title
1. Purchased Corporate License of RDMIP Software 2. RBI Program of Fixed Equipment (3,000 Fixed Equipment Items) 3. Risk-Based Piping Inspection Pilot Program 4. RBI Support for Tennessee Eastman Division 1. Purchase RDMIP Software Perform Risk Based Inspection Study at the Propylene Oxide and Methyl Tertiary Butyl Ester Plant in Port Neches, Texas 2. RBI Study of 600 Vessels at A&O Plant 3. RBI Study of 400 Vessels at P&O Plant RBI Program for 4 Gas Plants Using API Methodology (2,000 Fixed Equipment Items and Piping) 1. RBI Program (450 Fixed Equipment Items). 2. Assist with Preparation for RBI State Board Hearing Review and Development of Mechanical Integrity Program and Procedures. Determine Covered and Non-Covered Equipment (Prioritize Equipment) Risk Directed Inspection Program Services and Assistance with Development of Huntsmans Mechanical Integrity Program Mechanical Integrity Piping System Inspection and Testing Program

Client Contact Name & Phone

Mr. Tim Malone tdmalone@eastman.com 423-229-8031

Huntsman Chemical Corporation

Mr. Chris Archie 409-724-4481 christopher_archie@huntsman.com

Occidental Permian LTD

Mr. Bob Newberry 806-229-9756 robert_newberry@oxy.com Mr. Rodney Addison 901-947-8351 Rodney.Addison@premcor.com

Premcor Refining Group, Inc.

Mechanical Integrity

Apache Nitrogen Products, Inc.

Mr. Mike ONeill moneill@apachenitro.com

520-720-2119

Huntsman Chemical Corporation Australia PTY Ltd. Tesoro Petroleum Hawaii (Formerly BHP Hawaii, Inc.)

Mr. Frank Orszag [61] 3-93-16-3139 frank_orszag@huntsman.com Mr. Jim Kappel 808-479-0504 jkappel@tesoropetroleum.com

AES093 Rev 1

4-8

Project Type
Metallurgical & Failure Analysis

Client
Premcor Refining Group, Inc. Insul-Therm International, Inc. Tesoro Refining & Marketing Co.

Project Title
Perform Field Metallography on H-1 Heater Outlets at CRU 1344 Root Cause Failure Analysis of Aluminum Cladding Corrosion/Material Technology Development 1. Risk Assessment of Gasco 12-Inch Pipeline 2. Review and Strategy for Remediation of Black Dust Problem on 42-Inch Lean Gas Pipeline from Habshan to Ruwais Oxy Pipeline RBI Program

Client Contact Name & Phone

Mr. Sheldon Bouillion 409-985-1157 sheldon.boullion@premcor.com Mr. Thomas Tuttle 323-728-0558 ttuttle@insultherm.com Mr. Mike Sefcik 701-667-2447 msefcik@tesoropetroleum.com Mr. V.R. Krishnaswamy [971] 2-603-7336 krishnaswamy@gasco.ae Mr. Zafar Akhtar zafar.akhtar@gasco.ae [971] 2-603-1188

Pipeline Integrity

Abu Dhabi Gas Industries Ltd (GASCO)

Occidental Permian LTD

Mr. Bob Newberry 806-229-9756 robert_newberry@oxy.com Mr. Mohammed Ashraf [966] 3-826-1477 info@abdelhadialqahtanisons.com

Training & Seminars

Abdel Hadi Abdullah Al-Qahtani & Sons (Representative for SABIC and Saudi Chevron Philips)

Harvard Technology Kuwait Oil Tanker Co. S.A.K.

1. Training at SABIC Development and Implementation of Process Piping Inspection Programs 2. Training at Saudi Chevron Philips Safety, Life Management, and Technical Integrity Training Training Course of Technical Integrity in Refineries and Petrochemical Plants Risk, Mechanical Integrity, and the Latest Inspection and Maintenance Strategies

Dr. Jalil Ghanem [971] 2-627-7881 jalil@harvard.tc Mr. Fat'hi Ahmad Shamma [965] 326-3924 fsh@kotc.com.kw

AES093 Rev 1

4-9

Section 5 RDMIP METHODOLOGY

Due to proprietary reasons, APTECH cannot divulge all information regarding the methodologies used to calculate risk ranking of equipment. However, APTECHs approach and methodology is fully compliant with industry guidelines and best practice, such as described in API 580. In order to conduct a risk assessment in a systematic and methodical manner, a particular stepwise process is followed. Basic steps would include: Hazard Identification Frequency Assessment Consequence Assessment Risk Evaluation and Reporting The following provides a brief description of the overall method. APTECHs RBI program uses a combination of metallurgical theory, industry experience, and specific plant evidence in order to risk rank equipment. The results of the risk ranking process generally provide additional information that can be used for the allocation of resources and relative priorities for some or all of the following types of activities: Inspection repair or replacement Addition of safety features and alarms Procedures and training improvements Refinements in plant equipment design Frequency and scope of inspections Risk reduction implementation normally can be easily quantifiable in terms of costs in staff time for inspection programs, planning, maintenance upgrades, revisions, training, etc. The information provided by this procedure provides an objective basis for making these potentially difficult decisions for the allocation of resources to risk control and reduction. Traditional risk programs have tended to be based more on historical or theoretical failure probabilities, utilizing experiential data from similar plants, units, systems, and/or components to arrive at a measure of risk expressed in failures per year with numbers typically around 10-5 to 10-6.
AES093 Rev 1

5-1

When dealing with numbers this small, it is often difficult to conceptualize the relative risk weighting of individual components. Since it is APTECHs objective to provide a program where the efforts of the Inspection Department can be managed in the context of risk reduction, the focus is on development of a baseline risk assessment using actual plant evidence of problems and known industry problems to formulate the LOF ratings. Because the project is based on evidence (utilizing documented and anecdotal experience along with industry data), it captures available knowledge on equipment integrity and provides a meaningful tool for future inspection planning purposes. The risk ranking considers the LOF of a component and the consequences of that failure, if it should occur. COF is ranked using a methodology designed to focus on worst-case hazard characterization. Both the LOF and COF evaluations use a ranking scale that ranges from 1 (highest LOF and worst COF) to 4 (lowest LOF and COF). The LOF and COF ratings for each fixed equipment item are multiplied to achieve a combined risk ranking. The output from the LOF and COF analysis is combined in a linear (non-weighted) matrix, which assumes that there is equality between like-ranked elements of LOF and COF. The four-by-four matrix results in ranking values between 1 and 16. This matrix is partitioned back down to a 1 to 4 value for the convenience of assigning inspection frequencies and providing a practical limit to the number of ranking levels to consider. The ultimate goal of this effort is to use the risk ranking to prioritize the maintenance and inspection workload and improve (or lower) the level of risk through increased proactive and focused maintenance and inspection of critical equipment.

DEFINITIONS Likelihood Ranking 1 Likelihood Category Very High Definition Has occurred in the past (at this location). Likelihood of repeated incidents Has occurred in the past. May occur during lifetime. Incident has occurred in industry. Not likely to occur. No historical experience.

2 3

High Medium

Low

AES093 Rev 1

5-2

Consequence Ranking 1 or A

Consequence Category Very serious

Health/Safety Plant fatalities. Serious impact on public.

Environmental Impact Major extended duration. Full scale response.

Financial Impact Corporate-wide (fines, cleanup, significant downtime, replacement costs) Region/Affiliate (fines, downtime, replace, plant downtime) Division/Site (replace equipment)

2 or B

Serious

Serious injury to plant personnel. Limited impact on public. Medical treatment for personnel. No impact on public. Minor or no impact on personnel.

Serious significant resource commitment. Moderate limited response of short duration.

3 or C

Marginal

4 or D

Negligible

Minor little or no response needed.

Minor (replace minor equipment items)

RISK MATRIX

High Risk

L i k e l i h o o d

Very High

High

Medium

Low

Low Risk
Very Serious Serious Marginal Minor

Consequence

AES093 Rev 1

5-3

Risk Categories Very High High Medium Low

The development and utilization of a risk-based ranking program for equipment items differs from traditional inspection programs in that it provides for a systematic, structured approach to analyzing the potential problems, ranking them relative to other problems, and determining the most cost-effective inspection method to reduce risk. The most important aspect of an effective RBI program is that it must be evergreen. That is, after each inspection is conducted the following is done: The state of knowledge is redefined. Potential damage mechanisms are either confirmed to exist or not exist; corrosion rates are established or tracked and compared to predicted rates. Confidence in inspection findings is improved through increased scope or through the use of different/complementing technologies, etc. This new information is then incorporated into the risk model, and the change in risk can be recalculated. The program will also provide for a systematic review of process changes that can affect the life of fixed equipment. With time, the model will self-correct and reduce the LOF through the efficient use of inspection resources.

AES093 Rev 1

5-4

Section 6 RDMIP APPROACH

RBI programs provide a structured method for identifying and assessing the potential impact of deficiencies on an operating plant, as well as ascertaining inspection methods to mitigate these deficiencies. RBI provides a systematic methodology for factoring risk into infrastructure maintenance and inspection decision making. APTECH maintains its own database of damage mechanisms and operational conditions that could cause degradation of materials. The objective of RBI is to focus and prioritize the inspection effort without doing additional work (other than the RBI study). Instead of baselining all equipment, it allows one to focus initially on the high-risk equipment items without jeopardizing plant safety. APTECH has many years experience in the development and implementation of RBI programs for process facilities, worldwide. It is our experience that a complete RBI program consists of the following elements: Training Software Data Collection and Management LOF and COF Analysis Risk Ranking Analysis Reporting Risk Management Dealing with High Risk Items Turnaround Planning Updating and Continuous Improvement

APTECH has a risk management system in place to assist with the development and implementation of a RBI program. The RDMIP system consists of: Volume I Volume II Volume III Volume IV Volume V RDMIP Management Overview RDMIP Implementation RDMIP Work Management Program Software Manual Training Manual

APTECH proposes to assist facility personnel understand the fundamentals of these elements and provide experienced personnel to assist in implementing a RBI program.

AES093 Rev 1

6-1

A typical RBI project, conducted by APTECH personnel, could consist of the following: Provision of software, procedures, training and RBI methodology Facility will provide access to the necessary equipment and plant data for the RBI analysis. APTECH will provide a listing of the information required. Facility will identify plant contacts to assist with questions concerning process details, construction and fabrication, and inspection history data. APTECHs experience is that occasional questions will arise which will require this kind of assistance. Project initiation will begin with a kick-off meeting to assure APTECHs project team is properly aligned with project objectives and schedule, and that there is clear agreement on the deliverables to be provided. APTECH will set up software, procedures and train personnel in methodologies and data collection and input. The facility or APTECH could provide a team of personnel who will collect data and input into the software. APTECH, in conjunction with plant personnel, will provide inspection, metallurgical, and process support to conduct the RBI analysis. A review of the results, conclusions, and recommendations will be conducted with plant management, maintenance, and inspection personnel. APTECH will develop comprehensive inspection plans and conduct QA of the product and periodic updates. The RBI program can be incorporated into current maintenance and inspection programs at a facility, as well as being linked to existing software tools as shown in the next figure.
Field Inspection Data COF LOF

Pressure Vessel Risk Rank Database

UT Maintenance Management System Database

Inspection Plans

Inspection Schedules

Inspection Reports

Workorders
AES093 Rev 1

6-2

The overall program and approach can be divided into three distinct phases and subsequent tasks:
Goal/Objective

Assemble Resources

Determine Technical Approach/Software

Initial Screen (Scope)

Identify Hazards

Step 1

Data Collection

COF

LOF

Quality Assurance (QA)

Initial Risk Rank

Step 2

Risk Management

Others

Risk Reduction (Mitigation)

Inspection Plans

Others

Evergreen Implementation

Fitness For Services

Remedial Actions

Step 3

AES093 Rev 1

6-3

Section 7 SOFTWARE
The APTECH RDMIP software has been in development for over seven years. It is used on refineries, chemical plants, gas plants, and petrochemical facilities worldwide. Over 25 major companies have used the RDMIP system in order to implement RBI programs. Major users are Eastman Chemical (Corporate License), Huntsman Chemical, Samsung Chemical, Caltex Oil, ENGEN refinery (subsidiary of Petronas), and the Tesoro refineries. The software comes in two versions (MS Access and SQL version) and is fully compatible with Windows 95, 98, 2000, and XP. APTECHs RDMIP software meets the specific needs of both the chemical industry and refining, and it also meets the American Petroleum Institute (API) standards. Unlike other products available, RDMIP provides hazard information on over 1,600 chemicals. It is unique in that it is able to evaluate mixtures of both flammable and toxic chemicals. The software is self-contained and does not require the purchase of any further software. The software allows equipment items to be broken down into subcomponents (tube, shell of HE), contains 1,600 chemicals, and approximately 70 damage mechanisms. It is not data intensive like some RBI programs, yet it is robust and easy to understand. It calculates the LOF and COF of subcomponents and risk ranks them. Based on that information, inspection plans are developed for each equipment item. A summary of the RDMIP software follows: Over 7 Years in Development Modules for Fixed Equipment (to Subcomponent Level) Piping (to Circuit and Element Level) Useful for Any Process Facility Levels A and B, Simple to Advanced Reports for Operations, Maintenance, and Inspection Can Interface with Existing Inspection Planning Software 1,600 Chemicals and Toxics, Mixing Rules 70 Damage Mechanisms Different pricing options are available for the RDMIP software. These options can be discussed with APTECH personnel or their appointed agents.

AES093 Rev 1

7-1

FIXED EQUIPMENT DATA ENTRY Fixed Equipment Data Entry has three main sections: The Equipment Information Section (section indicated in red) The Subcomponent Level A/Essential Section (section indicated in green) The Subcomponent Level B/Detail Data Section (section indicated in green)

AES093 Rev 1

7-2

PROCESS STREAM DATA ENTRY (COF ANALYSIS)

AES093 Rev 1

7-3

DAMAGE MECHANISMS DATA ENTRY (LOF ANALYSIS)

AES093 Rev 1

7-4

Section 8 OPTIONS FOR IMPLEMENTATION

When it comes to implementing a RBI program, companies and operators have a range of choices. They can develop and implement the technology themselves; they can buy the technology and implement it themselves; or, they can buy the technology and let someone else do the implementation. By answering the questions described below, a company will get a feel for its expertise and ability to conduct a risk assessment. Why is the assessment being done? What knowledge and skills are required for the assessment? Who is on the RBI team? What are their roles in the RBI process? Who is responsible and accountable for what actions? Which facilities, assets, and components will be included? What technical approach, methodology, software will be used? What data are to be used in the assessment? When will the assessment be completed? How long will the assessment remain in effect, and when will it be updated? How will the results be used? What benefits will be derived from the program? Facilities have several options for implementing a RBI program at its facilities. Some of these options are discussed below.

ORGANIZATIONAL REQUIREMENTS In order to complete a RBI project, personnel with various skills are needed. Typically, a team is used to collect data, input data into a database, liase with plant personnel, conduct the analysis, and complete the reporting. A typical team would consist of: Metallurgical or Corrosion Engineer (or an Experienced Inspector) Process Engineer Part-time Support from a Project Manager, Data Input Clerk, Inspectors, Operations and Maintenance Personnel

AES093 Rev 1

8-1

Such a team can usually complete 50 equipment items a week. If more equipment items need to be completed, the team can double or triple in size. This team can be provided by APTECH, the facility, or a mixture of both, depending on the availability and expertise of the facilitys personnel. The personnel used on the project should be familiar with the process, operations, and metallurgy/corrosion issues associated with the plant. APTECH only uses experienced engineers who are familiar with a clients operation and process, and who also have extensive RBI experience. The input of specific plant personnel is also needed during the duration of the project. This time is usually not more that one to two hours per week (unless the facility wants extensive input), and would consist of interviews or assistance with particular data gathering. These personnel would include operators, inspectors, engineering, maintenance, and safety personnel. These personnel would also be included in a final review of the project results.

Option 1 Single-Site License Fee and Training (Technology Transfer) A single-site license fee can be purchased together with four days of training or RBI certification.

Option 2 Single-Site License, Training, and Consulting A single-site license fee can be purchased together with training and consulting services. If a facility has the personnel and expertise, implementation can be conducted by the facility personnel, after the initial training period. In this instance, APTECH would provide project management and QA support. This approach would minimize APTECHs engineering input and lower costs of implementation, but still ensure that the facility receives a quality product. The facility would need to provide a full-time corrosion engineer (or experienced inspector), a process engineer, and part time data input and management support.

Option 3 Training and Pilot Study Implementation APTECH can provide a team to conduct the implementation of a RBI pilot study on plant equipment. A project would consist of training, data collection by APTECH, RBI analysis of the data by APTECH personnel in Houston, and review and final reporting by APTECH at the plant site. In this instance, the facility would not be required to purchase the RDMIP software.

AES093 Rev 1

8-2

Option 4 Turnkey Implementation A final option would be for APTECH to provide personnel to implement the entire program turnkey. This can be achieved with or without the purchase of the RDMIP software. A project would consist of training, data collection by APTECH, RBI analysis of the data by APTECH engineers, and review and final reporting by APTECH at the plant site. APTECH can provide a facility with training, consulting, quality control checks, and other ongoing support services in the risk analysis, materials technology, FFS, and RBI areas. This work can be conducted on a time and materials basis in accordance with APTECHs standard terms and conditions. A facility may consider additional services or deliverables that may enhance the value of the RBI study. These could include: Development of a proprietary damage mechanism database that is plant, process, or industry specific. This database would be included in the RBI database and would give guidance on corrosion/damage mechanisms, susceptible areas and equipment, process and operating limits to mitigate damage, and NDE techniques most appropriate to discover the damage. Development of a software link to current inspection planning programs so as to achieve maximum benefit from both programs.

AES093 Rev 1

8-3

Section 9 DELIVERABLES AND REPORTING

Typical deliverables for the APTECH RDMIP program can include: Procedures and Software Manual Populated database for future use by facility. Summary report identifying overall conclusions and any assumptions used in the analysis Risk Matrix for each unit Risk Rank Summary Report which includes: Likelihood and consequence ranking for each equipment item Risk ranking for each item Identified damage mechanisms

Inspection plans for each equipment item that include: Equipment overview Potential and historical damage mechanisms Type and extent of inspections, including frequency and scope

Inspection planning spreadsheet and future inspection planning horizon Additional deliverables could include: Simplified process flow diagrams highlighting potential and historical damage mechanisms. These can be used later to define inventory groups for the analysis of piping. Detailed inspection point maps for high-risk items. Cost benefits analysis Examples of a risk matrix, summary report, and specific inspection plan are shown on the next pages.

AES093 Rev 1

9-1

AES093 Rev 1

9-2

AES093 Rev 1

9-3

AES093 Rev 1

9-4

AES093 Rev 1

9-5

Section 10 RDMIP TRAINING COURSES

APTECH can provide a range of RBI training courses for its clients. These courses range from a one-day general RBI course for managers, to a full week course for personnel who are going to implement RDMIP themselves. The following provides a brief summary of the training program:

MODULE 1 RBI/RDMIP OVERVIEW Objective and Contents of Module Upon completion participant should: Understand the background of RBI and RDMIP Understand the similarities and differences between APTECH and API approaches Have a basic understanding of the RDMIP process and software Understand the difference between the RDMIP analysis and day-to-day inspection management

MODULE 2 PROJECT ELEMENTS AND DATA COLLECTION Objective and Contents of Module Upon completion participant should Understand the roles and responsibilities of project team members Understand the elements that make up a successful program Have a working knowledge of why certain data are important Understand the equipment/software data hierarchy Have a working knowledge of data entry in the software

MODULE 3 COF Objective and Contents of Module - Upon completion participant should Understand the COF Analysis Have a working knowledge of data importance and approximations

AES093 Rev 1 1

10-1

Have a working knowledge of the Level A COF calculation done in the software Be acquainted with the Level B calculation

MODULE 4 LOF Objective and Contents of Module Upon completion participant should Understand the LOF analysis Have a working knowledge of data importance Have a working knowledge of how to conduct a Level A LOF analysis, including the importance of documenting the engineering basis for decisions in the software Be acquainted with the Level B evaluation

MODULE 5 SPECIAL FUNCTIONS AND REPORTING Objective and Contents of Module Upon completion participant should Be acquainted with some of the features in the software Understand how to generate standard reports contained in the software Understand the ability to use the software to generate unique plant reports Understand special functions Importing and exporting Copying and updating records Historical archiving (check in, check out) Administration

MODULE 6 INSPECTION AND TURNAROUND PLANNING Objective and Contents of Module Upon completion participant should Understand the difference between the RDMIP analysis and day-to-day inspection program management. Fundamentals of inspection and risk based turnaround planning Evergreen process Deficiency resolution

AES093 Rev 1 1

10-2

MI risk evaluation Turnaround integration Some basic RUL concepts

The above training can be completed in three days. The remainder of the training time will be devoted to use and practical application of APTECHs RDMIP software.

AES093 Rev 1 1

10-3

Section 11 COMPLIANCE
The Occupational Safety and Health Administrations OSHA 29 CFR Part 1910 contains requirements for preventing or minimizing the consequences of catastrophic releases of toxic, flammable, or explosive chemicals. Paragraph (j) relates to MI and applies to pressure vessels, storage tanks, piping systems, relief devices, vent and emergency shutdown systems, as well as controls, alarms, and interlocks. A requirement for compliance is that inspections and tests shall be performed on process equipment.

Inspection and testing procedures shall follow applicable codes and standards, such as those published by ASME, API, AICE, ANSI, ASTM and NFPA, where they exist; or, recognized and generally accepted engineering practices. The frequency of inspections and tests shall be consistent with applicable codes and standards; or, more frequently if determined necessary by prior experience. The employer shall have a certification record that each inspection and test has been performed in accordance with paragraph (j)."

The generally accepted standards for the inspection of petrochemical equipment are found in API Standards 510, 653, and 570. The API 510 Pressure Vessel Inspection Code relates to the maintenance inspection, rating, repair, and alteration of pressure vessels. Barring state, county, or city regulations that are more stringent than the federal code, it is apparent from current industry guidelines and standards that inspections can extend beyond 10-year intervals and that external inspections can be substituted for internal inspections. This can be done by conducting a thorough RBI study in which both the LOF and COF are closely examined for pressure equipment. The RBI study should be conducted according to the guidelines described in API 580 (or any other engineering standard that constitutes good engineering practice).

AES093 Rev 1

11-1

In addition to this, there is justification for doing external inspections over internal inspections, if certain criteria are met, as described in API 510. It is suggested that these criteria become part of the LOF procedure used to conduct the risk ranking of equipment. The decision that certain vessels meet these criteria should be carefully discussed with appropriate personnel when risk ranking is being conducted. Recommendations based on the risk ranking of vessels or equipment meeting these criteria should be carefully analyzed, and the final decision to extend inspection intervals beyond 10 years or to substitute internal inspections must be made by the a chief inspector or engineer, as described and recommended in the standard. If these steps are completed correctly and are well documented, the client will be in compliance, based on the fact that officially accepted standards and guidelines have been used to reach such decisions. API RP 580 provides the basic elements required to implement a RBI program. The document is designed to provide a framework that clarifies the expected attributes of a quality risk assessment, without imposing undue constraints on users, and offers users the flexibility to apply the RBI methodology within the context of existing corporate risk management practices. APTECH has compared its program to API 580 and the inspection codes, to ensure compliance. These comparisons are well documented in the RDMIP procedures.

AES093 Rev 1

11-2

Section 12 BENEFITS
The benefits of implementing a RBI program on a facility are many and varied. Benefits depend on the type of program implemented, the goals of the program, and the facilitys previous inspection and maintenance history. Benefits of a RBI program include improved MI with better identification of probable damage mechanisms at work. The appropriate inspection program can then be developed to manage them. Inspection programs can be developed based on risk (not time based), and priorities can be set according to the LOF and the possibility that certain damage mechanisms will occur. Plants with current RBI programs also report an $8 to $20 return on investment for every dollar spent to establish the program. This return is the result of improved inspection definition and associated labor and plant downtime cost benefits. Additional benefits include reducing thickness monitoring locations (TMLs) on low risk equipment items and improved turnaround planning. A summary of expected benefits from such a program would include: Regulatory Compliance/Acceptance Improved Safety and Reduced Risk Long Term Cost Benefits Focused Inspections TML Reduction Extending Intervals Beyond 10 Years Opportunity to Reduce Internal InspectionsTurnaround Planning

Use of New Inspection (NDE) Technology Informed, Documented, Defensible Decisions PLANT PERFORMANCE BENEFITS FROM RBI PROGRAMS RBI studies provide a detailed understanding of potential hazards and failure mechanisms related to the possible loss of pressure containment in pressure vessels and piping. This information can provide an excellent MI program, resulting in properly managed hazards. This improvement in the MI approach provides substantial cost/performance benefits in four major areas. During the analysis, specific recommendations are made relating to operational, corrosion, and inspection needs that address identified damage mechanisms in equipment. All decisions are documented, allowing management to make informed, defensible decisions based on risk. RBI provides the information necessary to establish a high quality, cost-effective inspection program.
AES093 Rev 1

12-1

Avoided Catastrophic Failure The first priority of any MI system is to avoid catastrophic failure, which could result in injury, environmental damage, or major financial loss. RBI analysis provides the understanding required to properly manage pressure equipment integrity.

Turnaround-Related Impacts RBI can be used to provide the following benefits: Turnaround Intervals RBI is used to define required equipment inspection schedules. This information is then included in turnaround planning. Often, plant turnaround intervals can be lengthened. This can extend average annual operating days by 1 to 2% per year, resulting in substantial increases in production value. Turnaround Duration RBI analysis information often allows reductions of planned turnaround duration. Proper inspection intervals frequently allow the inspection work scope to be substantially reduced. This allows shorter duration when inspection requirements are on the critical path. It also allows better turnaround planning with fewer surprises in execution. Unexpected Damage Findings Often equipment damage is discovered during a turnaround, which requires additional unexpected work, extended turnaround duration, or both. This can have a substantial unplanned cost impact because of both the additional work and the added lost production. Plants can often reduce turnaround costs by 10% or more by using RBI information in the turnaround planning process. Turnaround Inspection Costs Reduction of excessive inspection work during a turnaround is normally achieved by using RBI defined inspection plans. This reduces turnaround costs for these inspections. It also helps the turnaround by allowing planning and execution to focus on fewer things.

Unplanned Outages Due to Pressure Equipment Failure Most equipment failures are not catastrophic. However, they can still have significant impacts. Unscheduled downtime or reduced operating rates may be required to repair damaged equipment. RBI analysis greatly reduces this risk by providing better knowledge of damage mechanisms at work. An appropriate program can be established to manage pressure equipment assets.

Costs Due to Excessive Inspections on Low Risk Equipment The traditional inspection methodology required a baseline thickness inspection for all equipment followed by one to two more inspections over the next three to five years. Corrosion
AES093 Rev 1

12-2

rates are calculated and then used to extend future intervals where appropriate. This approach requires a major inspection cost investment, especially in the first few years of the life of a plant.

Protecting Equipment from Excessive Wear and Corrosion By understanding potential damage mechanisms and using appropriate risk reduction techniques, the life span of equipment items can be increased. Cost savings associated with RBI projects that APTECH has conducted include: Chemical Plant Extension of mandated 2-year turnaround cycle to 4 and 6 year intervals. Savings of more than $11 million dollars every 2 years. API Evaluation of Gas Plant Turnaround times shortened by 10 days. Savings of $10 million dollars every turnaround cycle. Ethylene Oxide Unit A 5-year turnaround cycle was changed to a risk approach where vessels are now inspected according to risk. Eighty percent of the vessels are now inspected at more than 10 years. This resulted in a savings of $4 million dollars every 5 years. Ethylene Unit RBI study on 600 turnaround vessels. Results from study resulted in more than $500,000 savings on turnaround. Refinery RBI study on proposed turnaround vessels resulted in reduction of turnaround scope resulting in substantial cost savings. Primary cost benefit is savings in lost production and avoidance of major incident or catastrophic failure.

AES093 Rev 1

12-3

Section 13 ASSET MANAGEMENT

Many process facilities are searching for new methodologies and systems to inspect and manage the integrity of their pressure equipment. The driving forces for such programs are reduced margins, increased competition, new standards, and more stringent environmental regulations. In order for a facility to extend the operating lifetime of pressure vessels and piping, safely and cost effectively, it is necessary to implement the latest inspection and maintenance strategies. RBI has its roots in PSM and MI programs and is gradually becoming accepted as good engineering practice for the implementation of inspection and maintenance programs. This section describes the methodologies and practices that may be used to implement a Plant Integrity Management System (PIMS) in order to be in compliance with existing regulations and assist with inspection, maintenance, and turnaround planning. The objective of developing a complete asset management program is to raise the performance of a facilitys inspection and maintenance programs so they outperform associated programs worldwide. This can be achieved by using industry best practices to move away from reactive maintenance programs and towards preventative and predictive programs, which incorporate reliability and risk. In the future, a facility will operate using risk-based reliability centered maintenance and inspection programs, which are driven by the latest technologies and practices. The majority of plant maintenance staff operates in a reactive mode. This means that the largest expenditure of maintenance resources in plants typically occurs in the area of corrective maintenance i.e., when problems or failures occur, they are corrected. Most facilities have been operating for extended periods in a reactive maintenance mode. Maintenance resources have been almost totally committed to responding to unexpected equipment failures, and very little is done in the preventative arena. Corrective, not preventative, is frequently the operational mode of the day, and this tends to blur how many people view what is preventative and what is corrective. Some plants actually foster pride in how quickly they can fix things or correct failures under pressure. However, it has been proven that this type of operation is not cost effective in terms of safety, downtime, and efficient use of resources. Some common maintenance problems include: Insufficient proactive maintenance Frequent problem repetition Erroneous maintenance work Not using sound maintenance practices
AES093 Rev 1

13-1

Unnecessary and conservative preventative and predictive maintenance (PM) Poor rationale for conducting PM actions Program lacks traceability and visibility Blind acceptance of original equipment manufactures (OEM) input PM variability between like units Exclusion of new technologies, such as predictive applications, reliability, and risk By addressing these problems and moving towards a preventative and predictive program, a facility can achieve the following: Prevent failures Detect the onset of failures Discover hidden failures Creating a new PM program or updating an existing one involves essentially the same process. One needs to determine what is to be achieved with the PM program and how the program can be built into a new or existing infrastructure. There is a host of supporting technologies that can be included in a PM program. Some of these include: Failure Analysis Technology Incipient Failure Detection Information Management Maintenance Management Information System (MMIS) or Computerized Maintenance Management System (CMMS) Reliability/Availability/Maintainability (RAM) technology Risk Technology A useful philosophy to incorporate into a PM program is the concept of reliability. Reliability Centered Maintenance (RCM) has been so named to emphasize the role that reliability theory and practice play in properly focusing (or centering) preventative maintenance activities on the retention of the equipments inherent design reliability. As the name implies, reliability technology is at the very center of the maintenance philosophy and planning process. Finally, the latest concept in maintenance and inspection activities is the incorporation of risk to prioritize maintenance tasks and schedules. It is no longer practical to choose systems for RCM analysis based on subjective risk importance. The primary systems on refineries and petrochemical plants are not as obvious as in the aircraft and nuclear industries (where RCM was born). Risk-centered maintenance uses the identical functional description of systems, subsystems functional failures, and failure modes that RCM employs. However, it is different from the RCM method in that the criticality class is replaced with an explicit risk calculation.
AES093 Rev 1

13-2

Using quantitative values, instead of coarse assignments, allows a more complete description of the actual hazards that exist in a facility and help to properly focus and prioritize maintenance activities. All of these concepts and tools should be considered in the development of a worlds best practice maintenance and inspection program for a facility. Engineering and management structures, currently in place at a facility, need to be reviewed. Such a review should focus on operational set-up, operating strategies, contracting schemes, organizational structures, and management culture. In addition to this, a review of the facility history, procedures, and inspection and maintenance records should be conducted to determine the current mechanical status of plant assets. This review could include plant walkdowns and comparison with industry practices and general plant conditions. This gap analysis should highlight deficient areas that need correcting in the PM program. During this task, APTECH will review the current inspection program and practices. The review will cover the following: Equipment files Inspection reports and results Inspection procedures Training records for inspectors Inspection plans Inspection schedules Existing local rules and regulations Existing inspection program organizational charts Personnel job duties and responsibilities Interviews with key inspection personnel, including inspectors, inspector supervisors, maintenance manager, and others, as deemed necessary. The purpose of the review can be considered to be three-fold: Determining whether the current inspection program and its practices meets what would be considered generally and accepted good engineering practices Determining whether the current inspection program meets local rules and regulations Determining whether the current inspection program provides sufficient and clear information for deciding whether or not equipment is fit for service

AES093 Rev 1

13-3

In order to implement a corrosion control program (dehydration, filtering, chemical inhibition, cleaning, pigging, planned repair, and maintenance), it is necessary to install an internal corrosion monitoring system so data can be generated that detail the present condition of the production, transportation, and storage facilities. This system will also allow an efficient low maintenance system to be run in the future. The management and implementation of such a PM program requires that much data be collected, analyzed, and stored. Many software programs exist for these tasks, however, many of them are standalone and communication between different disciplines is rare. For the PM program to work effectively, all data should be stored, analyzed, managed, and acted upon from a single source. This source could be a program, portal, or methodology. An example of a computerized maintenance management system is shown in Figure 1. Software systems may include reliability tools such as: UNIRAM Availability Modeling ACOM Cost Optimization UNISAM Spares Analysis OVERT Overhaul, Replacement Decision Analysis BALIFE Bayesian Life Prediction RBI Risk Based Inspection Tools Following the industry review, a system should be agreed upon and incorporated into the PM plan.
Failure Work Orders PM Tasks/ Frequencies PM Work Orders

Root Cause Failure Analysis

Management System

PdM Work Orders

Risk Based Inspection DB

PdM Tasks/ Frequencies

PdM Repair Work Orders

PdM Predictive Maintenance

PM Preventative Maintenance

Figure 1 Maintenance Information Management System.

AES093 Rev 1

13-4

A report will be provided with details of APTECHs observations. We will identify any gaps in the current program in reference to local rules and regulations, as well as what is considered good and generally accepted engineering practices. The report will include APTECHs conclusions and recommendations for improving the program. A key aspect of the report will be APTECHs work plan for the implementation of the proposed management system, including the identification of key positions and their roles and responsibilities in the form of organization charts, mission statements, and job descriptions. The principle deliverable from this task will be to provide a clear and concise guide to improving the performance of plants by improving reliability and inspection and maintenance practices. This roadmap will allow management to clearly identify realistic steps that when implemented will significantly improve the performance of the refinery assets within a set time frame. The roadmap should include the facilitys objectives in implementing such a program, and how these objectives will be met, measured, and in what period (milestones). The reliability improvement program plan should identify changes or improvements to the following: Physical assets Operational strategy Maintenance and inspection practices Asset management systems (including software) Organizational set up and management philosophy Such a program may take years to implement. Milestones and reliability improvement achievements should be carefully tracked and reported on. Within a year, the program should be showing overall improvements and benefits for the facility, which should be reported to management and personnel. This will ensure continued development and implementation of the plan. APTECH can assist with overall implementation by conducting training and reviews. For such a program to be successful and sustainable in the long term, facility personnel will require training. This training may cover the following issues: Damage mechanisms affecting refinery equipment Appropriate means of identifying such damage mechanisms RBI theory Plant life assessment theory Preventative, predictive, and reliability theory Engineering materials selection APTECH can assist with training and periodic reviews of the PM program. These reviews would focus on QA, as well as best-practice issues and methodologies. An example of the overall implementation process is shown in Figure 2.

AES093 Rev 1

13-5

Business Objective

Operational Imperatives

Regulatory Compliance

Current Plant Condition

Design Data

Plant Risk Analysis Concepts - Identify Critical Plant - Identify Highest Priority Components - Assess Safety Risks

Risk Based Inspection Program

Condition Monitoring

Best Practice Maintenance Management

Plant Inspection

Performance Testing

Performance Improvement

Integrity Assessment

Remaining Life Optimization

Fitness for Purpose (Run / Repair / Replace) Repair Procedures Operational Charges Maintenance Requirements Design Modification

Figure 2 Asset Management.

AES093 Rev 1

13-6

Section 14 WHY APTECH?

The advantages of using APTECH to implement your RBI study would include: APTECH conducts engineering work in several industries, including nuclear, fossil fuel and petrochemical. APTECH has conducted risk assessments and asset management programs for decades for the nuclear industry. The APTECH RBI system has been in development for approximately ten years and has its roots in the nuclear industry. APTECH has developed and implemented RBI software for the past seven years for a wide variety of clients in the refinery and petrochemical industry. APTECHs RBI system is used by over 30 clients, on all continents. APTECH has extensive experience working in many different countries and under various conditions. APTECH has a team of dedicated RBI specialists who have process and metallurgical experience in refinery and petrochemical processes. APTECH is an active participant in industry RBI initiatives and has published many papers and articles on RBI implementation. RBI staff at APTECH have worked with several RBI methodologies, including the API and Tischuk systems. APTECH has an extensive database of damage mechanisms and equipment items from a wide variety of process units. The APTECH RDMIP software is considered a leader in its field. The software contains 1,600 chemicals and approximately 70 damage mechanisms. Extensive reporting is provided in the software, including specific inspection plans for each equipment item, detailing damage mechanisms, appropriate NDE techniques and inspection schedules. APTECHs software is flexible and customizable. Software is fully supported by a software development company RDMIP user group provides additional support to all clients. APTECH provides follow-up services and 24/7 engineering support to all its clients.

AES093 Rev 1

14-1

Section 15 CONCLUSIONS

A significant economic advantage can be obtained by applying risk-based prioritization strategies to establish the most effective methods for scheduling and performing maintenance and inspection activities. A risk-assessment program can be developed to assist plant management in meeting corporate objectives of high reliability and low-cost operations. In this age of increasing global competition among producers, programs aimed at lowering production costs without adverse environmental, safety, and health impacts are critical. A risk assessment program will help plant management in meeting these objectives. Pilot studies and full plant implementation have highlighted the benefits that can be obtained from such programs. These studies show the importance of the practical application of this technology in identifying potential damage mechanisms, and the timely prevention of possible failures. Finally, the broader application of these methods will be driven by the need to do more maintenance as equipment ages, with less resources, and, in particular, less manpower. This will establish the need for smart systems that ultimately integrate information from many different sources in order to enable maintenance and inspection decisions to be made effectively and safely.

AES093 Rev 1

15-1