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Counting the Cost of Cutting Corners in the Oil and Gas Industry

Posted by Process Control Team on 8 Aug 2017

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Counting the Cost of Cutting Corners in the Oil and Gas Industry, Offshore Rig, Parker Hannifin -- Instrumentation Products Division History is littered with examples of how cutting corners has led to near or actual disaster. Despite advances in instrumentation and tubing, small bore tubing assemblies still represent the second largest source of hydrocarbon releases from offshore installations.   

There are around 45 million tube fitting assemblies installed in the UK and the North Sea alone. Statistics show that as many as 26% of these may have the potential for allowing a leak or worse. Furthermore, 20% of all reported leaks are related to small bore tubing assemblies. Around 11% of these cases are classified as major severity events, yet there is a culture to install product manufactured at the lowest cost by sub optimum vendors and install with low grade, essentially unskilled and untrained operators.

There are also environmental consequences to consider, with fines now running into millions for any breaches, the simple fact is that specifying a lower cost product and installation practices may not be the most prudent financial decision in the long run.

Drive towards lower costs can compromise safety

An important reason for this unacceptable situation may well be the decision to select and install product being made purely for cost reasons, without proper consideration of test data or long term performance. This can result in inferior materials or workmanship and/or untested designs being selected, which can seriously impact on safety. Often a manufacturer, even European-based and relatively credible at first glance, can recommend a product to an EPC or end customer without taking into account the demanding nature of certain applications in the oil and gas industry. Validating the credentials of manufacturers and contractors right at the start is essential to avoid issues further down the line.

Counting the Cost of Cutting Corners in the Oil and Gas Industry, Parker Hannifin, Instrumentation Products DivisionOne reason that some companies are able to produce valves and fittings at a lower cost may be because they have not invested in years of engineering leadership, research and development, metallurgists and rigorous testing and they do not have the backup of a strong global technical resource.

Correct performance at recognised boundaries may not be as critical if these products were being used in less demanding applications but in the offshore oil and gas industry, there is zero margin for error when it comes to process integrity.

The main considerations when specifying fittings and valves for critical applications, where safety is a priority, include a detailed review of competency with respect to the selected vendor. Do they have, for example;

  • A long term, proven track record in supplying this type of product safely and effectively?  
  • A financial strength and technical capacity sufficient to be able to sustain the contract or support the customer post sale and in to the future through any eventuality? 
  • In-house engineering departments, R&D/technical support, and their own metallurgists, all of whom have carried out the relevant research, analysis, and test to confidently ensure that the product will offer long term performance? 

Finally, can these companies offer accredited end user training and support covering, for example, such activities as; 

  • How to design the system safely
  • How to install the fitting or valve safely and how to maintain it correctly.  

The Parker Instrumentation training and support program is highly valued by customers who appreciate that it ensures they are best equipped to ensure a safe and secure installation that will give many years of reliable and long service. 

True cost 

Low cost at specification stage may often result in unexpected and high costs later in the project or after project completion. This is not only disruptive to business and a potential environmental issue but can cost companies dearly in terms of damage to a brand and its reputation. This can result in corporate litigation or corporate manslaughter charges where operators are injured. There are also the replacement costs of failed systems and components to consider. The true lifetime asset cost of poor specification with inferior products can, therefore, be extremely high. 

Involving Technical Managers/Engineering Managers in the decision-making process is essential to ensure that safety is not compromised.

Oil and gas companies should also ensure that instrumentation, tubing, and valves are correctly installed by competent and fully trained installers, in order to minimise risks. Buyers need to be supported in their bid to achieve the best value and that means not compromising on quality.  In these safety critical applications, it is essential that selection of suppliers and products is based on quality and whole life costings.  

Find out about Parker's instrumentation products here.

 

Counting the Cost of Cutting Corners - Spencer Nicholson - Parker Hannifin, Instrumentation Products DivisionSpencer Nicholson is Parker’s Division Innovation & Technology Manager, Instrumentation Products Division Europe

 

 

 

 

 

 

Related content:

10 Steps to Cost Effective & Safe Installation of Instrumentation Tube and Fittings Systems - White Paper

Fittings, Materials and Tubing Guide

Why Standardisation Matters in the Oil and Gas Industry

Mixing Materials in Corrosive Environments

 

 

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    Surface water supply matrix changes

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    Coagulant evaluation test

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    Real-time monitoring of THM sampling locations

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    Water quality model evaluation/water quality trend

    Hydraulic modeling of a water distribution system is an important tool for water quality management. In addition to basic hydraulic characteristics, modeling identifies water aging and predicts disinfectant decay and DBP formation. Incorporating new data from frequent THM analysis in combination with disinfectant level data will help plant operators build an improved hydraulic model for water quality trend analysis, providing critical information for more targeted and efficient water plant operation.

    Flushing program

    Water quality levels throughout the distribution system are maintained by systematic flushing programs designed to reduce stationary water in dead end lines and increase flow volume to minimize water age. The distance of water from the water plant, dead ends in the pipe, and low water usage may cause water quality deterioration. Lower residual disinfectant levels indicate the need to flush, which can cause a significant water loss. By measuring THM concentration in addition to disinfectant levels, operators can better decide on the location and length of flushing to minimize treated water loss.

    Water age evaluation

    Water age is emerging as an important issue due to increased THM formation in water distribution systems. Excessive contact time caused by dampened peak-hour demands, distribution piping configurations, areas of reduced water requirements, and fire protection storage can result in elevated THM concentration. Identifying and then reducing dead spaces and stagnation in water storage tanks and looping pipe configurations in water distribution systems will reduce water age. These actions can be triggered appropriately by monitoring THM levels in storage tanks and key locations in the distribution system.

    The Parker THM analyzers

    THM Analysis Applications in Water Treatment. On-Line THM Analyzer. Parker Hannifin. Instrumentation Products Division. Parker’s On-Line THM Analyzer and benchtop THM Analyzer are easy to operate, integrated Purge-and-Trap Gas Chromatographs (GC) that measure THM concentration at ppb levels in less than 30 minutes right at your own facility without tedious sample preparation.
    This integrated system is a powerful tool that can help operators optimize water treatment at the plant and evaluate water age in the distribution system for improved control over the formation of THMs.

    Pic. 1. Parker's On-Line THM Analyzer.

    Download Parker On-Line THM analyzer bulletin.

     

     

     

    THM Analysis Applications in Water Treatment. Bench top THM Analyzer. Parker Hannifin, Instrumentation Products Division.Pic. 2. Parker's benchtop THM Analyzer.

    Download Parker benchtop THM analyzer product catalog.

     

     

     

    THM Analysis Applications in Water Treatment. Kazi Hassan, technology development manager (water). Parker Hannifin, Instrumentation Products DivArticle contributed by Kazi Hassan - technology development manager (water) at Parker Hannifin, Instrumentation Products Division.

     

     

     

     

     

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    Parker has taken NACE compliance very seriously and invested a lot of time to ensure that not only did we understand the consequences of the standard but what we actually put out to our customers in the market place was accurate and met the criteria of what the standard is advising the Oil and Gas Industry.

    Engineers from Instrumentation Products Division Europe attended a conference organized by the authors of the NACE MR0175/ ISO 15156 document and arranged for one of the authors to visit our manufacturing facility at Barnstaple to discuss its implications and how we as a manufacturer of saleable goods should be certifying the materials we use for NACE compliant products.

    Declaration of Conformity 

    Meeting NACE Requirements For Materials Used In The Manufacturing Of Fittings_Declaration of Conformity_Instrumentation Products Division

     

     

     

     

     

     

     

     

     

     

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    Reducing Fugitive Emissions - Meeting ISO Standards with Process to Instrument Valves. Lloyds Register certificate. Parker Hannifin. Instrumentation Products Division.
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    Pic.1. Lloyd’s Register verification for the Pro-Bloc® 15mm process to instrument valves dates back as far as July 2007.

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    Reducing Fugitive Emissions - Meeting ISO Standards with Process to Instrument Valves.Shell TAMAP valve. Parker Hannifin. Instrumentation Products Division.Experience supporting major companies and being on approved vendor lists can also be a useful indicator of supply quality. Manufacturers of process to instrument valves who are working with oil majors typically have to pass stringent pre-qualification checks and approval systems. For example, Shell’s robust enterprise framework agreement requires suppliers to:

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    Pic.2. Parker’s MESC compliant Double Block and Bleed valve.

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    Reducing Fugitive Emissions - Meeting ISO Standards with Process to Instrument Valves. Jim Breeze, Flange Products Product Manager, Parker Hannifin, Instrumentation Products Division Europe.Article contributed by Jim Breeze - Flange Products Product Manager at Parker Hannifin, Instrumentation Products Division Europe.

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