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Case Study

Operational Excellence in midstream

Gas plant at dusk

Advisian supported the client in maximizing the plant’s throughput and profitability to achieve their goal of operational excellence.

The Situation

Our client knew that its flagship facility, north of Calgary, needed help in coordinating these departments if they wanted to maximize the plant’s throughput and profitability achieving its goal of operational excellence.

This midstream gas plant removes and recovers ethane, propane, butane, condensates, CO2, sulfur and natural gas from both raw and pipeline quality natural gas. Additionally, it cogenerates electricity. It is part of a larger natural gas infrastructure that touches more than 2 Bcf/d of natural gas in Canada and includes five other extraction plants, five natural gas transmission systems, three NGL pipelines, more than 70 gathering and processing facilities, and a 6,500 km network of gathering and sales lines.

The plant was built in 1961 and because of its constant metamorphosis over the past 50+ years, the plant is a mix of both new and old equipment. Vintage 1960s slow-speed integrated compressors (that have been reconfigured several times as process conditions changed) still operate in concert with state-of-the-art turbo expanders and gas turbines. Operation of these compressors is well understood by the plant operations and maintenance staff and has proven to be very reliable over the years. However, tuning and synchronizing of entire systems was proving more challenging, so while capacity was being added, production efficiency, in some cases, was falling away.

Typical of Midstream companies, our client has no oil or gas production of its own and makes money on a fee basis for service to gas producers by processing their gas and liquids. The commercial arrangements between our client and its producer customers generally provide the producers with fees at fixed rates over the long term, with small annual increases to reflect consumer price inflation. Our client bears the Operating and Maintenance (O&M) costs, including repair and major overhauls to rotating equipment. Therefore, our client has an incentive to invest in projects that lower O&M costs.

Our Approach

Advisian’s Analysis team began the six-week assessment with the goal of understanding the flow of work through maintenance, operator impact on throughput and yield, and the specific value drivers of the business unit. Key findings were as follows:

  • Compressor reliability and inlet flows contribute to unstable plant operations
  • C2 recovery decline became more pronounced when volume rose above 350MMscfd
  • Process variations caused product to be out of spec — in some cases, up to 30 percent of the time
  • Fractionation train for trucked in NGL unloading only 70 percent utilized
  • 40 percent of maintenance hours were not captured on a work order
  • Customer producers perceived low reliability, hindering Commercial’s ability to demand rate increases and larger volume commitments
  • Key managers spent excessive time in meetings — for one manager, it was over 80 percent of his week.
  • CAPEX projects were not objectively prioritized and misaligned with plant throughput profitability goals

Given the complexity of the situation, Advisian submitted a proposal that started with each area individually, while developing the overarching management system to tie them in together and coordinate activities.

The project deliverables, generally, were to increase plant throughput, product quality and revenue quality, specifically:

  • 30 percent increase in opportunistic trucked in NGL volumes
  • 20 percent increase in raw gas volume throughput
  • 30 percent increase in NGL trim blend sales volumes
  • Implemented processes to improve cross-functional collaboration and decision making between Commercial, Operations and Engineering
  • Design and implement a Work Management System to enable greater productivity of maintenance resources and optimization of maintenance spend
  • Design and install Key Performance Indicators
  • Streamline meetings and install meeting effectiveness measurements
  • Develop and install Production Loss Accounting System (PLAS)

Results

In September, a 38-week project was kicked off comprise of four workstreams: Operations, Maintenance, Commercial and “Integrated Performance Management” (IPM), the management system to tie them all together. After the first quarter, the Operations workstream was complimented with a world-class Process Engineer to help address the technical issues being faced by plant operators.

Almost immediately, employees embraced the opportunity presented to them, which was to become a part of improving their workplace processes and procedures, making it their project, not Advisian’s. Many of them, with decades of experience to draw from, quickly identified where and how they could make things better. Training on topics like change management and root cause analysis gave them the tools to take on the task ahead.

By November, with new client scheduling and communication protocols, NGL offloading records were being broken — more than doubling the 30 percent target. These volumes were believed to be beyond the plant’s capacity, but through the stabilizing, tuning and de-bottlenecking of the system by the Process Engineer, they have become the new norm. This success “turned the lights on” with many of the Operators who started looking for other areas where the system was being sub-optimized.

At the start of the project there was more than $50 million in proposed projects competing for a $12 million budget. Through the implementation of an objective Project Prioritization tool, the list was right-sized and aligned with the plant’s safety, environmental, regulatory, strategic and ROI goals. There was unanimous agreement after the budget review meeting that “it was the easiest one ever” and that “this should become the standard throughout the company.”

Maintenance and Operations supervisors are out daily in the plant, auditing ongoing jobs for safety, tools, work procedures and quality. One hundred percent of maintainer time is now attributed to a work order and those work orders are prioritized and scheduled two weeks out to ensure coordination between trades and parts availability.

These changes in work methods have taken hold. The employees have seen many of the frustrations they previously faced removed and know that they played a part in the improvement. They are not going to let it slip again and will ensure not only sustainability, but continuous improvement.

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