A small refinery in Africa is considering increasing its capacity. Due to political and economic uncertainty, the company is unsure of future market demand and pricing structure. Because of years of technical neglect, except for essential maintenance and operational requirements, the refinery is not operating efficiently, nor is it using the latest available technology.
Since the refinery’s management does not have enough technical people to optimise the refinery operation or investigate the market, they are considering using experienced engineering contractors or consultants to assist them in feasibility studies.
In addition, if a revamp proves viable, they intend to engage the services of a contractor to design, engineer, construct and commission the modifications.
During the initial phase, AVEC will establish current constraints such as product quality, current market demand, existing refinery capacity and existing refinery condition. Typically, this type of investigation includes physical on site examination of equipment as well as a review of inspection and other records. A process simulation will be performed to obtain a model for use in further design and to establish the operating constraints.
Existing legislation and product standards, locally and internationally, will be reviewed to establish likely future product requirements. Market research based on current economic conditions and expected future conditions, will be used to predict demand. This research is often done using the expertise of consultants with appropriate local experience.
This phase could take 4 to 6 weeks, depending on the complexity of the system. Throughout the period, AVEC will work in close consultation with the client, providing regular feedback on progress.
The predicted future demand is used to establish various revamp scenarios. Using the simulation and existing equipment data, the extent of revamp required to reach different demand cases is determined. Using conceptual estimating techniques, an order-of-magnitude cost estimate for the different scenarios is obtained. The emphasis for this type of cost estimate is on establishing the differences between different options.
The cost estimates for different demands are compared with revenue generated and the information is used to plan a revamp process to meet demand for the required period into the future.
At this stage, a formal value engineering exercise is carried out to establish where opportunity exists for increasing value. Typically, a number of alternate designs or options are generated, the best of which are investigated further. The optimum alternatives are then incorporated into the design for further engineering. As the design progresses and more detail and firmer costs become available, it is often useful to perform another value engineering exercise.
The conceptual phase takes 6 to 8 weeks depending on the required estimating accuracy, complexity of solutions/options and the number of scenarios to be estimated. Typically at the end of this phase the following are available:
After the concept has been finalised and agreed with the refinery management, the design proceeds to firm up details. Process conditions are frozen and detailed equipment specifications are produced. Input from mechanical, piping, control systems, electrical and civil engineering disciplines is included to complete the design. Experts are used from other organisations where specialised skills are required. Detailed Piping and Instrumentation Diagrams (P&ID’s) are produced showing the requirements of all disciplines. Equipment, instrumentation and material specifications are sent to suppliers to obtain quotations and details of required items. Global procurement is used to source material in the most effective manner, from both cost and schedule considerations.
During this phase, which could last about 3 months, reviews are held with clients, suppliers and internally to ensure the refinery’s requirements are met and that the suppliers understand their requirements. Suppliers are often selected at this stage, although orders are not yet placed.
At the end of this phase a Hazard and Operability study (HAZOP) is held to ensure the design is workable and safe. The cost estimate is updated with an improved accuracy, based on the additional information.
Detailed Engineering and Construction
Once all the planning and analysis is complete, AVEC’s engineering departments get into full swing. Orders are placed for equipment, especially long delivery items. Any items not yet firmed up are defined and engineering completed. Any changes or updating are extremely tightly controlled to prevent omissions, schedule threats or escalating costs. The duration of this phase normally depends on equipment delivery. Careful planning is required to reconcile delivery times and commissioning and start-up requirements. Material must arrive on site in time to facilitate construction. Effort is concentrated on expediting and inspection to ensure that items reach site on time and are correct.
Any delays during engineering can cause an impact on the construction team, who need the flexibility to respond appropriately. A key consideration during construction phase is the safety of construction labour and other people in the vicinity of the site. At the end of construction the site is normally handed back to the owner for commissioning and start-up.
Commissioning and Start-Up
During this final phase, AVEC begins the process of transferring the revamped refinery back to the refinery owner. AVEC usually continues to provide some assistance during this phase and for some projects the plant is only handed back to the owner after it is on-line and operating normally. Depending on the kind of contract and what guarantees are involved, a design rate test run is sometimes done once the plant is running.
Because, if you are a small refinery in Africa, operating under difficult and taxing conditions, and trying to plan in uncertain times, you need someone who has the expertise and knowledge to understand your circumstances and propose appropriate solutions and who also has the capability to implement those solutions for your benefit.
If this case study could be you, contact us today to challenge us with your problem. We are convinced that together, we can succeed.
AVEC's commitment to supporting our client's business objectives means that we always try to respond appropriately to requests for our services or assistance. We are not encumbered by the mindset of 'doing what we have always done, because that seemed to work in the past'.
We are committed to quality. All our work is performed to the high standards of auditability and accountability required.
We offer a range of services from feasibility studies, through the various engineering phases, to construction and commissioning support. In addition, we can provide consulting services such as plant or project audits, troubleshooting, value engineering facilitation and participation.
We have many contract types from lump sum professional services through to cost-plus reimbursable projects.
We believe in risk and reward contracting with incentives and would be pleased to discuss bonus/penalty scenarios on any potential contracts.