Reliability & Maintenance Conference & Exhibition

May 24-28, 2004

Henry B. Gonzalez Convention Center
San Antonio, TX

RMC-04-86 Excellence in Stationary Equipment

Reliability

Presented By:

F. Walter Pinto
Manager, Stationary
Equipment
Lyondell Chemical
Company
Channelview, Texas

National Petrochemical & Refiners Association 1899 L Street, NW 202.457.0480 voice

Suite 1000 202.429.7726 fax
Washington, DC www.npra.org
20036.3896
This paper has been reproduced for the author or authors as a courtesy by the National
Petrochemical & Refiners Association. Publication of this paper does not signify that the
contents necessarily reflect the opinions of the NPRA, its officers, directors, members, or staff.
Requests for authorization to quote or use the contents should be addressed directly to the
author(s)
Abstract

This paper describes the elements for a successful stationary equipment reliability program in a
petrochemical facility. The paper addresses management systems, engineering practices,
preventive/predictive maintenance/inspection systems, performance metrics and resources.
The paper shares the stationary equipment reliability program at Lyondell Chemical Company /
Equistar Chemicals, LP a number of best practices developed as part of the reliability program.
Also, some success stories and lessons learned are shared. A model stationary equipment
reliability program outlined in Attachment 1.0 can be used to evaluate the reliability program at
any site. A list of abbreviations used in this paper is provided in Attachment 8.0.

Introduction

A plant engineer is driving to work in the morning. He sees the emergency flare light up and
says to himself, “There it goes again!! We must have had another major leak due to Corrosion-
under-Insulation (CUI).” Later, he finds that it was indeed a leak due to CUI, and the associated
cost was in excess of two million dollars in lost opportunity and hydrocarbons flared. I am sure
all of us have experienced repeated equipment failures and said to ourselves, “Why can we not
learn from these incidents and prevent them from occurring again?” Some companies do and
some don’t. The only way unplanned equipment failures can be avoided is by having a
sustained “reliability culture” and not by “bandage approach.”

This paper focuses on stationary equipment reliability. However, the principles can be applied
to other disciplines. A number of papers have been published in the area of reliability. Science
and the tools in this area are well known and available. The challenge always is in
implementation because it requires resources. A reliability culture can only exist if it has
“reliability lobbyists” to make a constant case with the decision makers.

Reliability at Lyondell/Equistar is defined as “the availability of operating units on demand.” The

focus is on “excellence” not “compliance.” The reliability program covers all equipment not just
“process safety management (PSM) covered” equipment. We believe that reliability drives
excellence in safety, cost, quality and environmental performance. Our experience shows that
all roads lead to reliability. The most reliable plants have the lowest maintenance cost and
excellent safety performance. Attachment 2.0 illustrates this experience within
Lyondell/Equistar. The first graph shows the relationship between reliability and safety
performance at a site. The second graph shows the relationship between reliability and
maintenance cost performance at another site. Reliability is a competitive advantage.

Why Focus on Stationary Equipment?

Stationary equipment includes equipment types such as pressure vessels, heat exchangers,
piping, storage tanks, valves, pressure relieving devices, boilers, furnaces/heaters and
structures. In a typical refinery or petrochemical facility a significant portion (generally more
than 50%) of the capital/maintenance cost and reliability events or failures are associated with
stationary equipment. The risks from stationary equipment are highest compared to other
equipment types because of the shear number of equipment and quantity of stored fluid. A
significant percentage of industry incidents that resulted in injuries or asset loss also have been
associated with stationary equipment.

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In cases like heat exchanger tubes or expansion bellows, the critical components are made of
thin sections by design. Stationary equipment is often subjected to extreme operating
conditions and varying damage mechanisms. In most of the cases, the damage is not
immediate. A good example is CUI damage. How many times have you seen insulation cut
open during maintenance or a turnaround and left open, exposing the previously covered pipes
to weather conditions for months with no protection? Operations and maintenance personnel
forget that rain water has made the insulation wet, thus creating a perfect condition for CUI. Of
course, in addition to CUI, the insulation is rendered useless due to increased conductivity and
heat loss. Why is this allowed? This behavior is accepted because the leak is not immediate.
The consequences will only be realized after a few years, but by then everyone has forgotten
about how the water got inside the insulation.

Unlike machinery, stationary equipment is not fitted with “bells and whistles” for monitoring
conditions on-line. Stationary equipment conditions are generally monitored at specified
intervals, depending on damage mechanisms, and even then only a small percentage of area
generally is inspected. This makes it especially critical to have a robust reliability program. In
best-in-class organizations, stationary equipment reliability always leads overall reliability.

Focus Areas of Stationary Equipment Reliability

There are multiple approaches for designing a reliability program. We believe there are seven
focus areas for the stationary equipment reliability program. They are:

1. Management Systems
2. Engineering Practices
3. Reliability Practices
4. Operations Discipline
5. Implementation Discipline
6. People
7. Management Support

One can compare stationary equipment reliability to a knock-out punch. The first five focus
areas represent the fingers of the fist. None of these focus areas can be effective without a
high-performing trained workforce. The people represent the palm that holds all the fingers. Of
course, one can not deliver a knock-out punch without the supporting force delivered by the
arm. Similarly, reliability programs can not be successful without a strong management support.
Each of these focus areas is discussed in detail in the following sections. The scenarios given
are fictitious but based on industry experience.

Management Systems

There is a major fire due to a leak caused by CUI. During the investigation it was found that this
line not only was overdue for inspection, but that it had never been inspected. This was not an
oversight, but a case of “budget blinders.” The inspection would have required scaffolding, and
the operations superintendent did not want to spend money on scaffolding. After the fact, the
plant manager asked why he had not been told about this past-due inspection.

This type of situation can be avoided by establishing strong management systems.

Management systems are procedures that define and control the work process and define roles
and responsibilities. We suggest the following six steps for implementing effective management
systems:

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1. Reliability Beliefs and Principles: These define the vision and strategic direction for the
reliability program and set the foundation for it. Executive management must endorse this
document and continually communicate their belief in these beliefs and principles. Although
this document might contain “motherhood and apple pie” language, it is critical to have this
document as a guiding principle. Lists of reliability taboos also help engrain the reliability
culture.

2. Performance Standards: These are high level standards that define the required
management systems. An example of a requirement is “A management system for timely
notification to site management of past due inspections and recommendations.” We
suggest these documents be approved by an executive officer, preferably the chief
operating officer.

3. Inspection and Maintenance Standards: These standards define the technical

requirements for inspection, repair and maintenance of existing equipment. These
standards should have a single owner with responsibility and accountability for technical
content. A management system should be established for processing and approving
addenda and deviations.

4. Inspection and Maintenance Procedures: These procedures define workflow, roles and
responsibilities and are controlled and approved by the plant management. These
procedures are consistent with the requirements of Performance Standards. A flow chart
format is preferred for specifying workflow. Suggested inspection and maintenance
procedures are included in Attachment 3.0.

5. Key Performance Indicators: Establishing key performance indicators (KPI) is critical for
measuring current performance and indicating opportunities for improvement. These are
performance-related actionable metrics designed to improve reliability and cost objectives.
Often organizations report KPIs but never analyze and act upon them. There is absolutely
no benefit in reporting KPIs if improvement projects are not implemented.

Some of the KPIs used at Lyondell/Equistar in the stationary equipment area are:

• Past due inspections

• Past due recommendations
• Number of pressure boundary leaks
• Relief valve pre-test failures
• Weld reject rate
• Receiving inspection reject rate

Internal and external benchmarking is performed to evaluate staffing and cost structure.
The main sources for external bench marking are Solomon Study results and the API
Inspection Survey.

Attachment 4.0 shows the reduction in pressure boundary leaks due to CUI at a facility in
Europe. Investment for CUI remediation was increased in early years, resulting in dramatic
reduction in the leaks. Note that a constant $500M is spent every year for CUI inspections
and maintenance.

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6. Compliance Audits: Audits are a mechanism to determine performance of management
systems and programs. These audits can be viewed positively or negatively. At
Lyondell/Equistar, these audits are considered opportunity for improvement. Rigorous
audits are performed at a fixed interval (generally every three years). Auditors are company
employees but are from outside the site being audited. A detailed audit protocol exists. The
auditors are trained in the audit protocol and are knowledgeable in the company
performance, inspection and maintenance standards. The auditors verify existence of
management systems to meet the corporate requirements. Performance is verified through
a vertical slice audit. Evidence is required for verification.

The findings and observations are documented and reviewed with plant management staff
at the end of the audit. Inspection management audits last about two weeks. The action
items are monitored by management. Closure is required within a fixed time frame (usually
one year).

Engineering Practices

The unit experienced numerous outages because of heat exchanger leaks. This unit was
constructed just five years ago and built in accordance to the contractor standards. An
investigation indicated a series of problems. The design did not consider minimum velocities in
the exchanger tubes and a number of process exchangers were designed with welded U-tube
bundles, requiring cutting the bundle for removal. Moreover, the contractor standard was used
only as a guideline, a number of deviations were allowed.

This type of situation can be avoided with the implementation of strong engineering practices.
The two elements of engineering practices are:

1. Engineering Standards
2. Engineering Data Management

1. Engineering Standards: Every organization must have Engineering Standards that define
design, fabrication, inspection, testing, shipping and field construction requirements.
Reliability requirements are built into the Engineering Standards. The requirements of these
standards are mandatory. This is a big challenge and can be perceived as introducing
bureaucracy and stifling creativity. However, experience indicates that a properly managed
program can cut debate, eliminate costly mistakes and implement lessons learned. To
make the standards program successful, manufacturing and engineering senior
management must mandate that the standards be followed.

The Engineering Standards have a single owner who is held responsible and accountable
for technical requirements. A process exists to capture plant or project- specific technical
requirements in the form of addenda to the Engineering Standards. There is a process for
managing deviations to the Engineering Standards. The addenda and deviations are
approved by the standards owner. The standards are administered by a dedicated group
and are easily accessible through the company intranet. Standards are constantly evolving
documents. Lessons learned from every application is captured, evaluated and
implemented by the standards owner.

There are significant benefits in having a Global Piping and Valve Specifications as part of
Engineering Standards. Cost savings can be realized by streamlining procurement of piping
components, eliminating duplicate efforts at multiple sites, engineering efficiency and

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 minimizing errors through automation. Of course, there are challenges for implementing
new specifications at an existing site. The best way to accomplish this is to develop a cross-
reference list between the old and new piping and valve specifications. Having a cross-
reference list will avoid revising P&IDs to reflect new specification numbers. Any new lines
added will have the new specification numbers specified in the P&IDs.

2. Engineering Data Management: Plants tend to have design-specification data at multiple

locations such as Computer-Based Maintenance Management System (CMMS),
spreadsheets and Inspection Data Management System. Quite often the data is conflicting.
Best-in-class companies establish master systems for each data or document type. Other
systems copy data for display from the master database. Data can be altered only in the
master database. Manufacturing mission-critical documents such as P&IDs, PFDs,
equipment drawings and design calculations are stored in a central computer-based system.
This allows employees and contractors efficient access and reuse of information over the
equipment life cycle. Equipment purchase specification data are stored in a query-able
format in a master database. Engineering data are loaded into the system at the end of
each project and turnaround. P&IDs, PFDs, equipment lists, equipment drawings and
datasheets are updated promptly when modifications or repairs are made to the equipment.

Reliability Practices

Within two months after a turnaround, three critical heat exchangers experienced tube leaks,
resulting in plant shutdowns. These exchanger tubes were tested during the turnaround by a
contract crew. The leaking tubes were pulled and split, and pits were measured. All the leaking
tubes had multiple pits with wall loss in excess of 75%, including the holes where the tubes
leaked. The testing crew had tested these tubes and concluded the tube wall loss to be less
than 20%. The technicians had a level 2 certificate for performing tube tests from their
employer. Serious questions were raised on the rest of the test results. Later, an exchanger
tube testing qualification program developed within the company found that the crew was not
competent to perform tube testing.

These types of incidents are common in organizations where good reliability practices lacking.
The three key elements of reliability practices are:

1. Inspection Management
2. Focused Reliability Improvement Programs
3. Failure Reporting and Investigation

1. Inspection Management: This is a critical element and helps monitor the condition of each
piece of equipment. The goal is to detect deterioration prior to actual failure. The following
seven steps are suggested to establish an inspection program:

a. Establish a corrosion manual. This is the foundation for the inspection program. It is
developed with the input of process, inspection and metallurgical engineers. Operators
and engineers are trained on the content of this corrosion manual. A corrosion manual
contains:

• Process description for each unit and section.

• Corrosion table listing product characteristics, process conditions, corrosion
mechanism and failures.
• Failure history at similar process plants and industries.

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 • Current metallurgy and improvements made to the metallurgy over the plant life.
• Key corrosion variables and operating envelope. This requires investigation when
operating conditions deviate from the operating envelope.

b. Perform risk analysis to determine inspection priority and develop an inspection plan.
Quantitative risk analysis in accordance with API 580/581 is suggested for pressure
vessels, heat exchanger shells and piping circuits. API 580, Appendix O, can be used
with some enhancement for storage tanks. It is strongly recommended that a plant
inspector or engineer perform the Risk Based Inspection (RBI) analysis. Many a times,
due to resource constraints, plants hire outside consultants to perform RBI analysis. RBI
analysis by outside consultants can be successful only if plant inspection personnel are
fully engaged and verify input and output data.

At Lyondell/Equistar, the RBI results are being used to identify equipment for CUI
remediation, determine predictive inspection scope for turnarounds and focus resource
spending on damage source and on high-risk equipment. In a typical petrochemical
facility more than 80% of the failures are due to external corrosion; yet, in the past the
facilities have spent more than 80% of the total inspection cost in performing internal
inspection. In non-corrosive services, significant cost savings can be realized by
performing external inspection in lieu of internal inspection.

A qualitative or semi-quantitative tool works well for evaluating the risk in heat exchanger
bundles. The tool used at Lyondell/Equistar is called the Retube Analysis Tool (RAT).
This is a point-based system with 0 and 16 being the lowest and highest risk,
respectively. Four risk factors are used in the matrix. They are Tube Age Factor,
Remaining Life Factor, Production Criticality Factor and Service Factor. A maximum of
4 points can be obtained for each factor, with the higher numbers indicating worsening
conditions, and the lower numbers indicating better conditions.

The inspection and retube priorities are based on the total number of points. The
following are the three risk categories:

Risk Category Total Points

Retube 11 – 16
Priority Inspection 8 – 10
Normal Inspection 0–7

Reference (1) provides more information on the heat exchanger reliability program at
Lyondell/Equistar.

Similarly, a point-based qualitative tool works well for relief valve inspection and testing.
This tool is designed to include past inspection and test data to help determine
inspection interval.

c. Ensure that personnel performing NDE and inspections required by API standards are
qualified. Contract inspection and NDE personnel must be qualified to the industry-
accepted standards. It is recommended that an internal qualification program be
developed to qualify technicians for ultrasonic shear wave inspection, heat exchanger
tube testing, acoustic emission testing and other high technology inspection methods. A
core group of contract personnel should be identified for these inspection methods.

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 At Lyondell/Equistar, a program was developed to qualify tube-testing NDE technology,
hardware and technicians through performance tests. The purpose of the program was
to test, rank and use only the top tier technologies, hardware and technicians to obtain
reliable tube test data during turnarounds. A mock exchanger was fabricated using the
most common tube sizes and materials found in Lyondell facilities. Each tube had a
known set of flaws. The types and locations of flaws simulated actual situations. In
addition, tubes removed from plant exchangers with actual flaws were used to satisfy
quantitative needs and to simulate the liftoff effect that exists in dirty tubes. Random
placebo tubes (tubes with no defects) were installed to further validate operator
performance. More than 50% of the ASNT level 2 and 3 operators were disqualified
using this qualification process. References (1) and (2) provide more information.

d. Perform inspections on a timely basis. This is where the “rubber meets the road.” To be
successful in this activity, follow these steps:

• Develop the following year unit inspection plan in the 2nd quarter of the previous year.
This will help the maintenance department budget cost of maintenance support for
inspection activities. Operations can plan to make specified equipment available.

• Publish 90-day look-ahead inspection activity each month to plant management and
other stake holders. This will ensure timely planning of inspection activities.

• Develop the inspection plan and checklist for performing and documenting
inspections.

• Publish past-due inspection report at a prescribed regular interval to management to

focus attention to inspection back log.

e. Evaluate inspection results (condition assessment). It is the responsibility of the unit

inspector to review the inspection results to determine if findings and observations meet
the acceptance criteria. Generally, this exercise is limited to API 510, 570, 653 and API
579 level 1 methods. Engineering assistance will be required to perform level 2 or 3
fitness-for-service evaluation. Each company should decide at what damage level the
inspection personnel notifies management and if a more formal process is required.

At Lyondell/Equistar a Mechanical Integrity Risk Assessment (MIRA) program is used to

justify continued operation of equipment with damage failing level 2 assessment.
Management is notified immediately and resources are allocated. A multi-discipline
team is assembled to perform the MIRA. Technical evaluation includes review of failure
modes, fitness-for-service evaluation, potential risks, justification for continued operation,
action plan to mitigate risk and safety, operational and maintenance issues. The MIRA
requires approval by the plant manager. Corporate specialists have expertise in API 579
methods, stress analysis, finite element methods and fracture mechanics for evaluating
damage. Several computer programs are available for stress analysis (static and
dynamic) of pressure equipment and determining stress intensities at the flaws.

f. Set corrective recommendations and an action plan. Evaluation of inspection

information often results in recommendation to remediate deficiency. Management of
these recommendations is critical to the success of a reliability program. Integral to this

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 system is the management of inspection data. Inspection activities generate the
following documents and data:

• RBI analysis data including risk category, inspection due date and required type of
inspection effectiveness;
• Unit and equipment inspection plan for executing inspections;
• Annual and 90-day look ahead plans;
• Inspection plan date and notification number for maintenance support;
• Inspection report documenting findings and observations;
• Thickness data and corrosion rate;
• Condition assessment and fitness-for-service evaluation reports; and
• Recommendations, associated maintenance notification number and closure report.

The Inspection Data Management System at Lyondell/Equistar allows management of

the above data in one application. The hierarchy used for data management is site,
plant, unit, area and equipment. Under each equipments folder are folders for
equipment data, RBI data, inspection plans, inspections results and recommendations.
The application interfaces with CMMS for work order and cost information, condition
monitoring application for corrosion rate and RBI software for analysis results.
Inspection key performance reports (such as past due inspections) can be viewed on the
intranet by anyone within the company without logging into the Inspection Data
Management System.

g. Reassess risk analysis. In an ideal situation, level of damage should be predictable

using the risk-based tools. In the real world, there is always a variation. The only way to
come closer to reality is to continuously correct the input. Any time the damage is not at
the predicted level, the RBI input should be checked to determine the cause for
variation. Also, input for similar service equipment should be reviewed and corrected.
Long term, this process will help predict the damage accurately.

2. Focused Reliability Improvement Programs: Ideally, this element is not required if

properly functioning inspection management exists. However, having focused reliability
improvement programs to address issues common to multi sites can make a step
improvement. Generally these programs require significant spending. A systematic
approach should be used to “sell” the program. It is critical to collect past failure history and
associated cost due to lost production, reactive maintenance, safety and environmental
issues. The CUI triangle given in Attachment 5.0 is a good example of a metric to justify a
CUI program. The number in the top red section is the incidents that resulted in plant
outages, flaring, fires and major losses. The number in the middle yellow section is near
leaks or near misses found during CUI inspections that required mechanical repairs.
Examples are permanent and temporary repairs made during plant operation, repairs
required during the next turnaround and pin holes leaks where a leak clamp was installed.
Without the CUI program, a significant number of incidents in the middle yellow section
would have moved up to the top red section resulting in plant outages or fires. The number
in the bottom green section is the CUI findings not requiring mechanical repairs. These
findings are those where metal loss is within the acceptable limits. These areas are blast
cleaned, painted and insulated. Ideally CUI damage should be predicted and arrested in the
bottom “green” section. Otherwise, these incidents will move up in the CUI triangle and will
show up as incidents involving plant outages, fires or major asset loss.

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 Develop a risk-based remediation plan that includes the investment amount and return on
investment. It will be evident from this exercise that these programs are truly profit-
generating initiatives. These are long-term initiatives, and it is critical to have continuous
and sustained management support. Quite often in a large company, the reliability and
inspection personnel are faced with new management personnel due to rotation. The
success of these programs lies in having management and technical champions who
continuously educate the stake holders and decision makers on the impact of these
programs on the profitability of the company.

At Lyondell/Equistar, the focused reliability programs include CUI remediation, heat

exchanger reliability(1), furnace tubes, storage tank inspections and auto-refrigeration and
brittle fracture studies(3). Detail technical requirements and work processes are developed
for executing these programs. Justification for annual spending is continuously updated and
communicated to management. The company is on track to spend over $200MM on these
programs over 8-10 year time frame. CUI remediation is one of the major programs. Some
of the key elements of this program are (4):

• Use of ceramic coating for personnel protection. This eliminates insulation and CUI.
• Elimination of insulation where it is not required for personnel protection or energy
conservation. This could result in eliminating 20-40% of the insulation in the CUI
temperature range. Remember, if there is no insulation, there can be corrosion under
insulation.
• Use of rope access technique to seal insulation termination points to prevent water
ingress. Also this technique is used for CUI remediation work where it is cost effective(5)
• Use of subliming type fireproofing to replace high maintenance light weight fireproofing.
• Use of coating that can be applied on damp or sweating service to reduce work during a
turnaround.

At Lyondell/Equistar, “technical directives” are issued to address reliability and safety issues
that are global in nature and require immediate attention. These documents are issued by
the vice president of engineering or manufacturing to the plant manager, and they contain
very specific action items and due dates for completion. One good example is the technical
directive issued to remediate small bore piping branch connections.

3. Failure Reporting and Investigation: Ideally, there should not be any failures if a properly
functioning inspection program exists. However, in reality, some failures are bound to occur.
The saying, “If only we knew what we already know” is too true for the process industry.
There are so many failures and near misses at each facility that significant improvements
can be made just by learning from those incidents.

Best-in-class companies have strong management systems for incident reporting and
investigation. In the stationary equipment area, leaks and near leaks are key data for
improving reliability. Every leak is an opportunity to learn why the inspections program failed
to predict it. Classifying leaks into reliability, environmental and safety categories help
prioritize action items and gain visibility. The level of investigation depends on the
significance of the incident. Metallurgical failure analysis is required wherever the failure is
not obvious. Engineered solutions and action plans are developed to prevent similar failures
in the future. The critical activity is to IMPLEMENT the recommendations(6). This is where
most of the systems break down. We suggest having a central system to capture all action
items and issue past-due action-item lists to management and the action owner at specified

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 time intervals. The cycle is not complete until the equipment or system is monitored to
determine if the action plan was successful. Only then is the root cause eliminated or
managed within the acceptable tolerance.

Operations Discipline

A unit experienced a major leak in a column due to internal corrosion. The incident investigation
indicated that a process change was documented and approved through the Management of
Change (MOC) Process. RBI analysis did not predict the leak and suggested inspection 10
years from now. What happened? The investigation further indicated that inspection personnel
were not included in the MOC approval process; therefore, the RBI analysis was not updated
with the higher corrosion rate expected from the change in process.

It is critical to the success of a mechanical integrity program that operations, process and
maintenance personnel understand the inspection activities and work processes. At best-in-
class facilities, the applicable MOC forms are routed through the inspection department for
review, approval and updating of inspection planning tools. Operators are trained on
mechanical integrity critical variables. When these critical variables are exceeded, inspection
personnel are notified, an investigation is performed and an action plan is developed.

Some other examples where operations activities and work processes can greatly enhance
stationary equipment reliability are:

• Integrating the routine visual inspection of equipment and piping into operators’ rounds. Use
of operators as first line inspectors greatly enhances the inspection program. An example is
visual inspection of insulation for damage to jacket and caulking. This activity helps avoid
CUI by maintaining insulation integrity.

• Maintaining cooling water quality and back flushing cooling water exchangers. This will
have a significant positive impact on heat exchanger tube bundle reliability.

• Reporting all pressure boundary leaks irrespective of leak rate. Inspection personnel must
be notified whenever there is a leak of any degree.

Implementation Discipline

An exchanger leaked within a few months after a turnaround. This exchanger was retubed
during the turnaround. Tube metallurgy was upgraded from carbon steel to duplex stainless
steel (SS), and tube-to-tubesheet joints were welded to prevent leaks to the shell side. An
investigation indicated that the tube-to-tubesheet welds had cracked. Engineering Standards,
which normally would be used for procuring new exchangers, had not been applied to this work.
This omission resulted in the weld procedure for duplex SS to carbon steel weld not having
been reviewed. Also, NDE requirements for the welds had not been specified.

Projects, maintenance and turnaround activities are intended to improve reliability of the plant.
This is the time when a change in terms of adding new equipment, modification or replacement
is made. Generally, most of the activities are related to preventive or predictive maintenance. If
the engineering and quality requirements are not rigorously applied, the result could be an
incident similar to the one described above. The four key elements in this focus area, when
properly implemented, should prevent such incidents. They are:

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 1. Maintenance / Turnaround Planning and Execution
2. Project Engineering and Execution
3. Purchasing and Materials Management
4. QA / QC Programs

1. Maintenance / Turnaround Planning and Execution: The following steps are suggested
to make a turnaround cost effective and achieve expected reliability results.

a. Plan the inspection and maintenance activities based on RBI analysis. Significant
cost savings can be realized by performing external inspections in lieu of internal
inspections where the equipment is in non-corrosive service.

b. Perform pre-turnaround inspections if there are deficiencies in the evergreen

inspection program. This will minimize surprises and unplanned expenses during the
turnaround.

c. Set the technical and quality requirements in the job package for each scope item.
Both engineering and inspection personnel must review and approve the package.
Inspection and test plans are included in each package.

d. Define the job closure process to include inspection personnel sign off to indicate
that all work and associated inspection activities are complete.

e. Establish performance metrics such as weld reject rate, rework rate and non-
conformance rate and publish them daily during the turnaround.

Remember, the maintenance and turnaround opportunities are meant to solve and eliminate
the problem, not cause new ones. Do it right the first time.

2. Project Engineering and Execution: Use the total-cost-of-ownership philosophy. Best-in-

class companies establish design life for each equipment type and design the equipment to
meet those criteria. The following steps are critical for constructing a highly reliable plant or
equipment:

a. Use consistent work practices, workflows and tools for justifying projects.

b. Use Engineering Standards that define mandatory minimum requirements. These

standards provide design, fabrication, inspection, testing and construction
requirements. Management systems exist for disposition of deviations to
engineering standards.

c. Use a qualified engineer (with functional knowledge) to review and approve data
sheets and specifications during the design phase. Reliability and inspection
personnel provide input on applicable jobs. Front-end loading of the project is critical
to minimize total project cost.

d. Add inspection and test plans for shop and field work. A surveillance plan is in place
to monitor QA and QC.

e. Establish alliances with engineering contractors for large and small projects. Most
often engineering contractors that manage large projects can not effectively execute

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 small projects and vice versa. Working with the same contractor has benefits in their
knowing the customers’ work processes and technical and quality requirements.

f. Use an approved vendor list to supply equipment (both commodity and engineered)
and services. A management system exists for disposition of deviations to the
approved vendor list.

g. Perform shop and field surveillance to assure that the requirements are met. A
management system exists for disposition of non-conformances.

h. Provide project documents to the plant for updating equipment files. The plant
develops a condition monitoring plan.

3. Purchasing and Materials Management: The purchasing and materials departments play
a key role in the reliability program. An approved vendor list for equipment (engineered and
commodity) and services is critical for success. Best-in-class companies have provider
qualification programs that consist of a review of safety, technical, quality and commercial
capabilities. The system at Lyondell/Equistar is called Global Approved Providers System
(GAPS). The system requires a rigorous vertical slice audit to verify technical and quality
capabilities. Randomly a job is selected and walked through all stages - from raw material
receipt to finished product - to verify implementation of all the elements of the vendor quality
manual. Findings and observations are documented and reviewed with the vendor
management for acceptance. The vendor is required to close the audit findings prior to
being included in the company vendor list. The auditors will specify a rating, range of
qualifications and restrictions which will be documented in GAPS. Purchasing personnel
use this information prior to ordering equipment or services. The need for follow-up audit is
determined based on vendor performance.

It is important to have a limited number of vendors for each equipment or service type.
Where spending is large, alliance with a few key vendors is suggested to reduce total
purchasing cost and also ensure quality product. Alliance vendors are generally more
familiar with company workflow and technical and quality requirements. Examples where
Lyondell/Equistar has established alliances are heat exchanger fabrication, NDE, inspection
and QA services, commodity valves, PSV testing and inspection and gaskets. The system
allows end users to enter discrepancies so that feedback can be collected and analyzed for
further action. Purchase requisitions have clear technical and quality requirements.
Purchasing personnel are trained in company standards and quality systems to ensure that
all appropriate documents are included in the request for quotation (RFQ) document.

The warehouse also plays an important role in reliability. Receiving inspections, including
positive material identification (PMI) and dimensions checks, are defined by the individuals
submitting the requisition. Warehouse personnel are responsible for arranging receipt
inspections, marking, storing and issuing the correct material. Major incidents could occur if
the focus is just on receiving correct material rather receiving, storing and issuing correct
material. Good examples are loose items such as gaskets, plugs, nipples, nuts and bolts.
Proper controls in the warehouse are essential to ensure that correct materials are issued.
Risk-based field PMI checks are required to verify the materials.

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4. QA/QC Programs: QA/QC programs are critical to ensure that engineering, inspection and
testing requirements are incorporated during design, fabrication and construction activities.
This is a requirement per OSHA 1910.119 rules. There are four steps to a quality
assurance program:

a. Pre-qualify suppliers
b. Specify quality assurance / control requirements
c. Implement supplier oversight
d. Control deviations

Qualification of suppliers was discussed in the preceding section. Best-in-class companies

have quality assurance standards. These standards assure that appropriate QA
requirements are uniformly specified to contractors, sub-contractors and vendors. The
standards are applied to major projects, turnarounds and minor projects. Inspection,
surveillance and auditing responsibilities are defined for the company, Engineering,
Procurement and Construction (EPC) contractor, equipment vendor and sub-contractor or
sub-supplier. For major projects, the EPC contractor is required to develop a Quality
System and Project Quality Plan. This plan consists of a Procurement Surveillance Plan for
EPC purchases, a Construction Surveillance Plan for EPC subcontracting and Field
Inspection/Test Plans for EPC construction.

For engineered equipment a Supplier Surveillance Requirements (SSR) are included with
the purchase order to define surveillance requirements. This document describes the hold,
witness and verification points. The extent of surveillance is dependent on equipment
criticality, which is determined by a multi-discipline team. Standard Inspection and Test
Plans (ITP) are developed for each type of field construction. The extent of field
surveillance for each subcontractor is specified.

People

The individual who performed fitness-for-service evaluation resigned and left the company. This
individual provided solutions to various sites but never documented assumptions and
calculations in the report. Also, lessons learned and best practices identified through various
fitness-for-service evaluations were not documented. Suddenly the company found itself in a
vacuum. There was no knowledgeable person available to perform the calculations. Also, it
was impossible to reproduce past calculations.

When personnel rotate, retire or resign, much corporate memory leaves with the individual. Due
to cost pressures, companies cut back on training and development. Succession planning for
technical specialists is literally non-existent in some companies. Yet, very few companies have
systems to capture individual knowledge. The following methods are used to capture
knowledge at Lyondell/Equistar:

• Standards and Guidelines: Work processes and technical requirements that must be
followed are incorporated in the standards. Engineering Guidelines are a series of
documents that capture best practices identified across the company. Examples of
Engineering Guidelines are API level 1 and level 2 fitness-for-service evaluations, CUI
program development, inspecting for external stress corrosion cracking and heat exchanger
tube testing methods.

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• Best Practice Teams and Annual Reliability Forum: Best practice teams are formed in
each discipline. The Stationary Equipment Best Practice Team is a forum to discuss and
gain alignment on engineering, reliability, mechanical integrity and inspection technology
issues. The team consists of inspection supervisors from worldwide sites and stationary
equipment specialists from the plants and central engineering. The team shares best
practices, successes and lessons learned. The team meets formally every quarter for 1-1/2
days. The team provides direction for major programs such as CUI, tank inspection
program and risk based inspection.

Worldwide Reliability Forums are conducted every year at one of the major manufacturing
facilities. Approximately 250-300 engineers, specialists and management personnel from
worldwide facilities attend the 3-day forum. This presents an opportunity to share and learn
best practices in various disciplines.

• Technical training: This training is conducted by company technical specialists. The

training focuses on technical requirements, work processes and applicable company
standards. Training is custom-designed for the audience. Training materials are made
available on the company intranet for individuals to refresh themselves at anytime.

• Technical Advisory Series: This series is a communication tool for distributing technical
information across the company. They are one-page documents intended to create
awareness of pertinent reliability and technology issues.

• Mentoring: This program is an excellent opportunity to train younger engineers to become

discipline specialists. Younger engineers are assigned to a certain field and asked to work
closely with the senior specialist. A good example is development of engineers for
performing fitness-for-service evaluation.

Organization structure, job description, workflow, roles and responsibilities are very critical to
the success of reliability programs. At Lyondell/Equistar, the unit inspector concept has worked
well to make a step improvement in the stationary equipment inspection and reliability
programs. Unit inspectors coordinate stationary equipment inspection program for a unit or
area. These individuals manage the inspection program rather than simply perform inspections.
They are knowledgeable in all applicable company and industry standards, RBI, inspection
methods and workflow. Unit inspectors must be company employees in order have ownership,
responsibility and accountability. (Field API inspections and NDE can be performed using
qualified contract personnel.) There is a technical ladder for unit inspectors with three positions
on the ladder (entry level, career level, advanced level). Core competencies, expectations and
job description for each position are defined. Attachment 6.0 specifies core competencies used
at Lyondell/Equistar and an example of behaviors expected.

Benchmarking is done to determine inspection department optimum staffing level for each site.
The number of pressure vessels (drums, columns and heat exchangers) per inspector is a good
measure to determine the required number of unit inspectors. The rest of the workload
becomes proportional to pressure vessel count. Depending on the complexity of the unit, 225 to
300 is the optimum number of pressure vessels per inspector. Operating units should be
divided among inspectors based on pressure vessel count. Attachment 7.0 provides a
suggested inspection organization.

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The reliability superintendent is a key position in a plant. In general, successful reliability
superintendents have functional knowledge and experience in inspection management. The
following are the key factors for success (6):

• Leadership
• Credibility
• Communication skills
• Interested in this job, not the next job
• Business perspective
• Broad view
• Technical competence

The engineer development program makes the stationary equipment engineers well rounded
and knowledgeable in process, maintenance, design, reliability and project engineering. Core
competencies and expectations are developed for inspection supervisors and stationary
equipment engineers. Corporate technical specialists are well integrated in the manufacturing
organization. Corporate specialist costs are divided among plants at a very high level rather
than charged out by job number. This approach helps improve dialog between the plant
personnel and corporate specialist and increases utilization of specialists on value-added
assignments.

The technical specialists participate in the industry technical committees and channel industry
best practices to the company. Some of the industry organizations are API, American Society
of Mechanical Engineers (ASME), State Boiler Board, Materials Technology Institute (MTI) and
National Association for Corrosion Engineers (NACE). Engineers make presentations at
conferences and publish technical papers.

A reward program exists to recognize accomplishments and celebrate successes. This

recognition program exists at department, site and company wide levels. This is key for
improving moral and motivation.

Management Support

The plant was assigned a new plant manager. Suddenly the reliability organization received the
edict to stop spending on maintenance painting, CUI and other key reliability programs.

This is what happens if the reliability programs do not have support at all levels of management.
Management support is very critical for the success of reliability programs. It should be
consistent, continuous and at all levels. Management should exhibit long-term vision,
leadership and commitment. To accomplish this, persistent effort is required to educate
management personnel and bring visibility to reliability issues. Best-in-class organizations have
strong support for reliability programs among executive management. These organizations
have reliability champions or “lobbyists” in the management ranks to make a continuous case
and foster a reliability culture. In these companies, reliability culture is evident among business,
research and development, Information Systems and other non-manufacturing organizations.

The test for management support and commitment is during financially difficult years. Has your
manufacturing vice president or plant manager refused to reduce reliability program budget
during financially difficult years? Ours have.

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Summary

Reliability drives excellence in safety, cost, quality and environmental performance. In world
class organizations, stationary equipment reliability always leads overall reliability. This paper
presents 7 focus areas for a successful stationary equipment reliability program. Success can
only be realized if these elements are IMPLEMENTED. A very critical element among them is
management support. We suggest selling the reliability programs as “profit centers” rather than
“cost centers.” Return on investment should be demonstrated to gain support. Attachment 1.0
provides a check list to evaluate a Stationary reliability program. Perform a gap analysis and
IMPLEMENT the elements that are missing and you will see a step improvement in reliability.

References

1. Gamio, Carlos and Pinto, Walter, “Shell and Tube Exchanger Reliability Study,” NPRA
Maintenance Conference, New Orleans, Louisiana, May 1999.
2. Hardy, Allison, Qualification Program for Heat Exchanger Tube Test Operators, NPRA
Maintenance Conference, Austin, Texas, May 2000.
3. King, Ralph and Kelly, Thomas, “Auto-Refrigeration/Brittle Fracture Analysis of an Existing
Olefins Plant – Lessons Learned,” NPRA Maintenance Conference, San Antonio, Texas,
May 2002.
4. Sanders, Joe Don, “Effectively Using Risk-Based Inspection Results to Implement a
Corrosion Under Insulation Program,” NPRA Maintenance Conference, New Orleans,
Louisiana, May 2001.
5. Klein, Paul, “The Use of Rope Access Techniques to Inspect for Corrosion Under Insulation
on Towers in an Operating Process Plant,” NPRA Maintenance Conference, San Antonio,
Texas, May 2002.
6. Hoffman, M. Rick, “Back to Basics, A Down to Earth Approach to Sell, Implement and
Sustain Your Reliability Program,” 8th International Process Plant Reliability Conference,
Houston, Texas, October, 1999.

BIOGRAPHY

Walter Pinto is manager of stationary equipment engineering for Lyondell Chemical Company
and Equistar Chemicals, LP. He has worldwide responsibility for corporate stationary
equipment engineering and supports 22 manufacturing sites located in the United States,
Europe and Asia. His group provides technical support for reliability program development,
mechanical integrity, inspection technology, capital projects, turnarounds, engineering
standards and troubleshooting. He has 17 years of industry experience in stationary equipment
design, fabrication, inspection, maintenance and troubleshooting. He holds a MS degree in
mechanical engineering from the University of Wisconsin, Milwaukee.

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Attachment 1.0

MODEL STATIONARY EQUIPMENT RELIABILITY PROGRAM

Management Systems

1. The company has reliability principles and beliefs.

2. The company has standards identifying required management systems. These

standards are approved by an executive officer of the company. The standards include
management systems for:

a. Developing, reviewing and approving standards and procedures;

b. Approving addenda and deviations to the standards and procedures;
c. Establishing inspection priority and dates using RBI methodology;
d. Developing, approving, implementing and updating inspection plans;
e. Timely notifying Site Management of upcoming inspections and recommendations,
past due inspections and recommendations, and deficiency;
f. Performing condition assessment on all equipment inspection results/data in a timely
manner;
g. Performing fitness-for-service evaluation to resolve deficient stationary equipment
conditions found during condition assessments;
h. Prioritizing, reviewing, tracking, and closing inspection recommendations and
corrective actions;
i. Approving inspections deferrals and recommendations. Deferral form contains
reasons for not executing action, consequences, resolution plan including a new date
for completing the action and technical justification for delaying inspections and
recommendations. Plant Manager approves this request;
j. Conforming to standards and specifications for maintenance materials, maintenance
repairs, alterations, and new stationary equipment procurement and construction;
k. Documenting non-conformances, their resolution and approval of the resolution plan;
l. Reporting and analyzing inspection key performance indicators (KPI) and to take
improvement actions; and
m. Ensuring equipment history and inspection records are maintained.

3. Each site has plant procedures defining requirements for inspections and maintenance
activities. The procedures include roles and responsibilities and workflow. Suggested
inspection and maintenance procedures are given in Attachment 3.0.

4. The company has inspection and maintenance standards for defining technical
requirements related to stationary equipment maintenance.

5. Each inspection and maintenance standard and procedure has a single owner who is
held responsible and accountable for its content.

6. Addenda and deviations to the standards and procedures are approved by the standards
owner.

7. Performance-related actionable key performance indicators are established to improve

reliability and cost objectives. As a minimum, the following KPIs are reported:

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 a. Past due inspections: Inspections that have not been performed in accordance with
the original equipment inspection plan.
b. Past due recommendations: Recommendations that have not been completed by
the original due date.
c. Relief valve failing pretest: Separate data for number of valves failing to open
>110% of set pressure and number of valves lifted <90% of set pressure.
d. Number of Leaks: Number of pressure boundary leaks.
e. Weld reject rate: Butt weld radiography pass/fail percentage.
f. Percentage of parts Rejected: Percentage of parts inspected that did not meet the
defined criteria.

8. KPIs are analyzed and action plans are implemented.

9. Internal and external bench marking is done to evaluate staffing and cost structure.

10. Audits are performed at a fixed interval to verify performance of management systems
and programs.

11. A detail audit protocol exists.

12. The auditors are trained in the audit protocol and are knowledgeable in the company’s
performance, inspection and maintenance standards.

13. Audit findings and observations are documented and reviewed with the plant manager
and his/her staff at the end of the audit. The action items are monitored by
management. Closure is required within a fixed time frame.

Engineering Practices

14. The company has global Engineering Standards defining technical requirements for
design, construction, inspection, testing, erection and commissioning of new equipment
and plants.

15. The company has global piping and valve specifications.

16. Each Engineering Standard has a single owner who is held responsible and accountable
for its content. The piping and valve specifications have single ownership.

17. Use of Engineering Standards is mandatory for all new and existing equipment. This
has been endorsed by the executive management.

18. Plant and project specific technical requirements are captured in addenda to the
Engineering Standards. These addenda are reviewed and approved by the original
standard owner.

19. A deviation to an Engineering Standard is approved by the owner of the standard.

20. Engineering, Inspection and Maintenance standards and procedures are administered
by a dedicated group.

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21. All standards and procedures are available on the company intranet for easy access.

22. A system exists for receiving and disposition of improvements suggested to the
standards. Lessons learned from projects and turnarounds are promptly implemented
by the standard owner.

23. An accurate list of stationary equipment including pressure relief devices and piping
circuits/line numbers exists.

24. Equipment purchase specification data are stored in a query-able format in a master
database. Duplicate databases are strictly prohibited.

25. Design calculations, drawings, vendor documentation and regulatory documents are
stored in a central master system.

26. P&IDs, PFDs, equipment lists, equipment drawings and datasheets are updated
promptly when modifications or repairs are made to the equipment.

27. Computer-Based Maintenance Management System (CMMS) exists to document

equipment maintenance work history, failure history and cost.

Reliability Practices

28. Each site has a corrosion manual. It is developed with the input of process, inspection
and metallurgical engineers. The corrosion manual contains:

a. Process description for each unit and section;

b. Corrosion table listing product characteristics, process conditions, corrosion
mechanism and failure history;
c. Failure history at similar process plants within the company and in the industry;
d. Information on current metallurgy and improvements made to the metallurgy over the
plant life; and
e. Key corrosion variables and operating envelopes.

29. Operators and engineers are trained in the content of the corrosion manual.

30. Investigation is performed when operating conditions deviate from mechanical integrity
critical variables and the operating envelope.

31. Quantitative and/or qualitative risk analysis is performed for prioritizing equipment for
inspection and developing inspection plans. As a minimum, the following risk based
tools are available:

a. Pressure vessels, heat exchangers and piping circuits (such as RBI)

b. Heat exchanger bundles
c. Pressure relieving devices
d. Storage tanks

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32. Unit inspection plans are developed in the second quarter for next calendar year. This
plan is used to develop inspection and associate maintenance activity budget for the
unit.

33. 90-day look ahead report indicating upcoming inspections is published each month to
concerned plant personnel.

34. Company and contract inspection and non-destructive examination personnel are
qualified to the industry-accepted standards.

35. A core group of contract non-destructive examination personnel are identified for
ultrasonic shear wave inspection, heat exchanger tube testing, acoustic emission testing
and other high technology inspection methods. An in-house qualification program exists
to qualify tube-testing technicians.

36. A computer-based system exists to document and store condition-monitoring data such
as thickness data (examples, UltraPipe, Meridium Condition Manager).

37. A computer-based system exists to document the following:

a. Data used for risk analysis and inspection priority

b. Equipment specific data
c. Unit inspection plans and specific equipment inspection plans
d. Inspection due date
e. Inspection results and reports
f. Findings and observations
g. Condition assessment and fitness-for-service evaluation reports
h. Recommendations prioritization and closure
i. Work order information related to recommendations

38. Inspections are performed on a timely basis in accordance with the due date. Findings
and observations are documented in the inspection report.

39. Evaluation of inspection results (condition assessment) is performed to determine if

findings and observations meet the acceptance criteria.

40. Corrective actions are developed to remediate equipment deficiency and tracked to
closure. A system exists to prioritize recommendations.

41. Inspection results are used to reevaluate RBI risk and determine next inspection date.

42. Focused reliability programs exist for issues common to multi-units or sites and
situations requiring intensive resources. Examples: Corrosion-under-insulation
remediation and heat exchanger reliability programs.

43. A mechanism exists for senior management to direct plants to prioritize and address
specific reliability or safety issues that are global in nature and require immediate and
sustained attention.

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44. Detail technical requirements and work processes are developed for executing focused
reliability improvement programs.

45. All pressure boundary leaks, irrespective of how small, are being reported as incidents.

46. Metallurgical analysis is performed where cause of the failure is not known.

47. Engineered solutions and action plans are developed to prevent similar failures in the
future.

48. Solutions are applied to similar service equipment or systems.

49. System exists to capture and track all action items to closure.

50. A past due action item list is issued to management at a fixed time interval.

51. The failed equipment or system is monitored to determine if the action plan was
successful.

Operations Discipline

52. Operators perform and document routine visual inspection of equipment and piping.
Deficiencies are identified and communicated to inspection organization.

53. Operators are trained on mechanical integrity critical variables and operating envelope.

54. Investigations are performed and action plans are developed when mechanical integrity
critical variables are exceeded.

55. A management of change (MOC) process exists to document and approve changes to
process chemicals, technology, equipment and procedures.

56. Applicable MOC forms are routed to the inspection department for review, approval and
updating inspection planning tools.

Implementation Discipline

57. An evergreen turnaround scope item log is maintained to document required inspections
and maintenance work as a result of inspection recommendations. Risk based tools are
used for identifying inspection and maintenance scope items.

58. Pre-turnaround inspections are performed where deficiency exists in the evergreen
inspection program.

59. A job package is developed for each scope item. Technical and quality (Inspection and
Test Plans) requirements are included.

60. Engineering and inspection personnel review and approve the job packages.

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61. The job closure process requires inspection personnel sign off to indicate that all work
and associated inspection activities are complete.

62. Performance metrics such as weld reject rate, rework rate and non-conformance rate
are established and published.

63. Total cost of ownership philosophy is used to justify projects. Consistent work practices,
workflows and tools are used.

64. Engineering standards that define mandatory minimum requirements are used.
Management systems exist for disposition of deviations to engineering standards.

65. Data sheets and specifications are reviewed and approved by a qualified engineer
during the design phase. Reliability and inspection personnel provide input on
applicable jobs.

66. Inspection and test plans are added for shop and field work. A surveillance plan is in
place to monitor QA/QC.

67. Alliances agreements are established with engineering contractors for large and small
projects.

68. An approved vendor list is used to procure equipment (commodity and engineered) and
services. A management system exists for disposition of deviations to the approved
vendor list.

69. Shop and field surveillance is performed to assure that the requirements are met. A
management system exists for disposition of non-conformances.

70. Project documents are turned over to the plant in a timely manner for updating
equipment files and developing condition monitoring plan.

71. The approved vendor list is maintained for supplying equipment (commodity and
engineered) and services.

72. The provider qualification program exists to qualify vendors. This program reviews
safety, technical, quality and commercial capabilities. Audits are performed to verify
vendor’s technical and quality programs.

73. Alliance agreements exist with critical suppliers.

74. A system exists to collect feedback on the current vendors. Non-conformances are
analyzed and actions taken.

75. Purchasing personnel are trained in company standards and quality systems.

76. Purchase requisitions contain technical and quality requirements. Receiving inspection
requirements including positive material identification (PMI) and dimensions checks are
specified.

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77. A management system exists for performing receipt inspections, marking, storing and
issuing materials.

78. Quality assurance standards exist for defining QA requirements for contractors, sub-
contractors and vendors.

79. Inspection, surveillance and auditing responsibilities are defined for the owner company,
EPC (engineering, procurement and construction) contractor, equipment vendor and
sub-contractor or sub-supplier.

80. Supplier Surveillance Requirements (SSR) is included with the equipment purchase
order.

81. Inspection and test plans are developed for field work.

82. Non conformances are reported and corrective actions to rectify non conformance are
taken.

People

83. A system exists to document and publish best practices, lessons learned and
successes.

84. Best practice teams exist to gain alignment on engineering, reliability, mechanical
integrity and inspection technology issues.

85. Technical training is conducted to educate and train engineers, inspectors, operators
and technicians.

86. Communication tools exist for distributing technical information and creating awareness
of pertinent reliability and technology issues.

87. A mentoring program exists.

88. Unit inspectors manage the inspection program for their unit.

89. A technical ladder exists for unit inspectors.

90. Core competencies and expectations are developed for each position.

91. Benchmarking is done to determine the optimum number of inspectors, NDE technicians
and clerical support. The optimum number of pressure vessel count per inspector is in
the range of 225 to 300.

92. A dedicated inspection supervisor exists for sites with more than 600 pressure vessels.

93. A development and rotation program exists for engineers. Core competencies and
expectations are developed for inspection supervisors and stationary equipment
engineers.

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94. Corporate specialist costs are divided among plants at a very high level rather than
charged out by job number.

95. Technical specialists participate in the industry technical committees and they channel
industry best practices back to the company. They make presentations at conferences
and publish technical papers.

96. A reward program exists at multiple levels of the organization to recognize

accomplishments and celebrate success.

Management Support

97. Management has long-term vision and is committed to investing in reliability

improvement programs. Support and commitment is obvious during financially difficult
years.

98. Strong support exists for reliability programs among executive management.

99. Return on investment is calculated to support investment on reliability improvement

programs.

100. Reliability champions or “lobbyists” exists in the management ranks to foster a reliability
culture.

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Attachment 2.0: Reliability Related to Safety and Cost Performance

Reliability & Safety Performance at a Site

Reliability Safety

96% 3.00
94%
92% 2.50
3 Year Rolling Average

OSHA Recordable
90%
2.00
88%
86%
1.50
84%
82%
1.00
80%
78% 0.50
76%
74% 0.00
93

94

95

96

97

98

99

00

01

02

03
19

19

19

19

19

19

19

20

20

20

20
6

Reliability & Cost Performance at a Site

Reliability Maintenance Cost Index

100 2

99 1.9
Maintenance Cost Index
3 Year Rolling Average

98 1.8

97 1.7

96 1.6

95 1.5

94 1.4

93 1.3

92 1.2

91 1.1

90 1
90

91

92

93

94

95

96

97

98

99

00

01

02
19

19

19

19

19

19

19

19

19

19

20

20

20

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Attachment 3.0: Suggested inspection and maintenance procedures

Procedure Title
Administrative Procedures
Organization and Responsibilities
Management of Inspection Procedures
Inspection Personnel Qualifications
Past Due Inspection and Recommendation Notification
Management of Recommendations
Inspection Records and Security Management
Reporting and Analyzing Inspection Key Performance Indicators
Management of Non-Conformance
Inspection Procedures
Equipment Classifications
Unit and Equipment Inspection Plans
Equipment Condition Assessment
Mechanical Integrity Risk Assessment (MIRA)
Equipment Failure Investigation
Receipt Materials Quality Control
Equipment Procurement QA and Construction QC
Heat Exchanger Tube Inspection, Retubing and Plugging
RV Inspection and Repair
Turnaround Inspection and Repair Scope Development and Execution
Inspection Work Instructions
Pressure Vessel Inspections
Heat Exchanger Bundle Inspections
Piping Inspections
Dynamic Equipment Inspections
Atmospheric and Low Pressure Storage Tank Inspections
Fired Boilers and Heaters Inspections
Structures and Building Inspections
Radiographic Film Interpretation
Ultrasonic Thickness Measurement
Liquid Dye Penetrant Inspection
Magnetic Particle Inspection
Eddy Current Inspection
Hydrostatic and Pneumatic Testing
Maintenance Procedures
Hot-taping and Stoppling
Welding Repairs, Alteration and Rerate of Stationary Equipment
Flange Bolt-up Procedures
Temporary Repairs (leak clamps)
Maintenance of Coating, Insulation Systems, and Fireproofing

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Attachment 4.0:

Leak Reduction Success

Leaks Investment, ($ in millions)

90 1.6

80 1.4

70
1.2

Investment ($ in Millions)
60
Number of Leaks

1
50
0.8
40
0.6
30

0.4
20

10 0.2

0 0
82

84

86

88

90

92

94

96

98

00

02
19

19

19

19

19

19

19

19

19

20

58 20

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Attachment 5.0: CUI Triangle

CORROSION-UNDER-INSULATION FINDINGS

Plant Outages; Flaring;

Fires; Major Losses
XX

•Permanent repairs done on the run

•Temp. Repairs, Leak Boxes Findings Requiring
•OK to run, but must repair at T/A Mechanical Repair
•Repairs completed during T/A XXX
•Pin hole leaks, installed leak clamp

CUI active, metal loss acceptable, CUI Findings, Not

blast, clean and paint XXXX Requiring Repair

33

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Attachment 6.0: Inspector Core Competencies

The following core competencies are used for inspectors at Lyondell/Equistar. Required
qualification for each position is defined in the job description.

1. Technical Knowledge
2. Industry Codes and Standards
3. Inspection Workflow Process, Internal Standards and Procedures
4. Equipment Classification (RBI)
5. Routine Inspection Planning and Execution
6. Turnaround/Shutdown Inspection Planning and Execution
7. Inspection Personnel Qualification
8. Evaluation of Inspection Information
9. Inspections Recommendations Management
10. Maintenance QA/QC
11. Failure Analysis, KPI and Evergreening Inspection Plans
12. Inspection Records Management
13. Reliability Improvement Programs
14. Business Ethics and Personnel Standards
15. Communication Skills and Customer Orientation
16. Leadership Skills, Team Work, Initiative and Develop Others
17. Inspection Management Tools

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Example of expectations for “Equipment Classification” competency:

Expectations
Competencies (Note 1)
Inspector Senior Inspector Principal Inspector
Equipment • Independently • Independently • Demonstrates thorough
Classification performs qualitative performs knowledge of likelihood
(Level I) RBI quantitative (Level and consequence
analysis to III) RBI analysis to analysis per API 580
determine total risk, determine total risk, and 581.
next inspection date next inspection date • Demonstrates thorough
and type of and type of knowledge of the logic
inspection. inspection. in software tools for
• Demonstrates ability • Demonstrates inspection (e.g. RAT,
to perform understanding of API API-RBI). Understands
quantitative (level III) 580 and 581 sensitivity of the output
RBI analysis under requirements. on each input field in the
supervision. • Independently software.
• Determines priorities determines priorities • Proactively initiates
for heat exchanger for heat exchanger discussions with
bundle inspections bundle inspections Reliability and Process
using Enterprise using Enterprise Engineering on alternate
tools (e.g. RAT) tools (e.g RAT). designs to meet
under supervision. • Proactively optimum RV testing
• Determines RV optimizes RV interval.
criticality under testing interval using • Considered an expert in
supervision. past Enterprise qualitative
Determines inspection/testing tools for inspection (e.g.
inspection interval data. API-RBI, RAT)
for State/Local • Interacts with • Proactively establishes
regulatory body operations for systems to ensure
controlled information timely input from
equipment. impacting damage operations when
• Reviews mechanism and RBI operating variables
management of analysis. impacting equipment
change documents damage exceeds the
for impact on RBI acceptable limits.
analysis.

Note 1: Expectations are cumulative. Individuals must demonstrate all expectations at their
grade level and all levels below.

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Attachment 7.0: Suggested Inspection Organization Structure

Best in Class Inspection Organization Structure

Pressure vessels per unit inspector : 220

Reliability Supt.
Note: All four unit inspectors
are company employees

Inspection
Supervisor

CAD Draftsman Data Clerk

Inspector #1 Inspector #2 Inspector #3 Inspector #4

Plant 1 Plant 2 Plant 3 Tank Farm, QA/QC

NDE Tech #1 NDE Tech #2 NDE Tech #3 NDE Tech #4 QC Inspector

Inspector #1 Inspector #2 Inspector #4

Inspector #3

280 pressure vessels
329 pressure vessels
83 pressure vessels

186 pressure vessels

504 piping circuits
592 piping circuits
149 piping circuits

335 piping circuits

254 PSVs
332 PSV's
78 ASTs

200 PSV's

186 PSV's

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Attachment 8.0: List of Abbreviations

API American Petroleum Institute

ASME American Society of Mechanical Engineers
ASNT American Society of Nondestructive Testing
CMMS Computer Based Maintenance Management System
CUI Corrosion-under-Insulation
EPC Engineering, Procurement and Construction
GAPS Global Approved Procurement System
ITP Inspection and Test Plans
KPI Key Performance Indicators
MIRA Mechanical Integrity Risk Assessment
MOC Management of Change
MTI Materials Technology Institute
NACE National Association for Corrosion Engineers
NDE Nondestructive Examination
OSHA Occupational Safety and Health Administration
P&ID Process and Instrumentation Diagram
PFD Process Flow Diagram
PMI Positive Material Identification
PSM Process Safety Management
QA Quality Assurance
QC Quality Control
RAT Retube Analysis Tool
RBI Risk Based Inspection
RFQ Request for Quotation
SS Stainless Steel
SSR Supplier Surveillance Requirement

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