Top Ways a Refinery Can Use to Help Weather Current Market Conditions
By John Aumuller, P.Eng.
In general, a $1 improvement in the bottom line is equivalent to $10 - $25
needed on the top line.
- Reduce labor costs by adjusting the organization to match current
- Reduce input costs (e.g., cost of fuel gas, electrical power).
Negotiate / renegotiate contracts.
- Operate equipment to its available capacity (know your equipment).
- Identify incremental upgrades with big returns (e.g., equipment,
- People. Are the best people being accessed, either via direct hire
or contract, and used to their maximum capabilities and potential
(e.g., engineering, inspection, operations)?
- Are rational management processes in place to support operational
- Reduce maintenance costs
Review maintenance operations. Identify:
- Recurring “bad actors”, such as repetitive equipment failures.
Identify the root cause for repeat failures and potential improvement
- Review maintenance schedules to identify opportunities to delay or
extend maintenance activity without impacting reliability or safety.
- Is maintenance activity based on long time past practices or are
they best practices? Review turnaround schedules to identify
opportunities to delay or extend time between turnarounds. Can on-line
maintenance / unit squat be used to avoid a full unit turnaround?
- Are industry best practices known and implemented?
- What is your competitor doing that is better?
- Learn the equipment, improve operations.
- Case Study. Recently reviewed a cogeneration heat recovery boiler
and found unit running 12% under design unbeknownst to site operations
- Case Study. Reviewed production capacity of steam generating units
and found 3% - 5% additional capacity, which translated directly to
the same percent increase in oil field recovery.
- Ensure that any new projects have equipment capacities verified by
field acceptance testing.
- Case Study. Found steam generators were being placed into
production without verifying design capacities by normally conducted
standard performance testing.
- Run performance test of any critical equipment to confirm
- Consider use of third parties to perform the work as a benchmark
against OEM practices.
- Reduce auxiliary fuel gas use in fired equipment using plant waste
fuel streams. Fuel gas minimum rates may be adjusted downwards, say
from 10% to 2½ % support, by proving new operation.
- Attend industry trade conferences with focus on technical and
operations to learn from others experiences, innovations,
improvements. (Ask Carmagen for recommendations.)
- Apply rigorous engineering-based decision making. Be on
guard against decisions that are based on intuition, fad, trend, or
- A recent trend in upstream oil recovery facilities is to use low
alloy Cr – Mo alloy piping in heat recovery steam generators [HRSG],
adding a substantial premium to investment costs. The metallurgical
evidence suggests that standard carbon steel components are adequate
when correctly specified with the addition of minor alloying elements
that are already identified in the specification.
- A recent trend in delayed coker units is to use a weld overlay
(WOL) technique to restore the service life of damaged drums; however,
the WOL technique is not sufficiently proven and may pose future
reliability and safety issues.
©2010 Carmagen Engineering, Inc.