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Look beyond capital costs to find savings

Oct. 26, 2016
Some upfront investments quickly pay off from a lifecycle perspective.

A capital expenditure is incurred to create a future benefit, explained Mark Murphy, technical director, electrical & control systems engineering, Fluor Enterprises. Operational expenses are money spent to turn inventory into throughput. And lifecycle cost is the total cost of ownership.

“Lifecycle cost includes initial capital cost, installation and commissioning, operation, maintenance and loss of revenue due to failure,” explained Murphy during a presentation this week at the Emerson Global Users Exchange. “We need to look beyond the capital costs and look at what the cost of our project really is. We need to compare capital costs and lifecycle costs and explain why the lifecycle costs are more important. Some extra capital costs will improve reliability. Monitoring equipment such as for steam traps, relief valves, heat exchangers, cooling towers and rotating equipment—some of the expensive assets you have in your plant—will reduce lifecycle costs.”

Results based on a typical 25,000-bbl/day refinery include total $7.7-10 million lifecycle-cost savings per year. The implementation cost would be $4.8 million with an average return on investment (ROI) of seven months. “Capital costs shouldn’t be the only consideration,” explained Murphy. “If we want the plant to run for 20 years, we need to make sure those assets are going to be available to us over the next 20 years.”

There are two drivers in projects—lifecycle costs and capital costs. “The capital-cost driver usually wins out, but the lifecycle-cost driver has a slower slope,” said Murphy. “We have potential for a larger savings over the life of the asset. Some of our largest expenditures go to field equipment, exchangers, piping, compressors and valves. Some technologies will give you value over the life of your plant. The wireless acoustic transmitter, the Rosemount 708, provides you with a lot of health information. It listens to what’s going on in the pipe. A failed steam trap can cause a lot of trouble.”

[sidebar id =1]Steam traps remove condensate from piping, preventing erosion and corrosion and inefficient heat transfer. “They can stick closed or stick open,” explained Murphy. “By monitoring, we can listen to what’s happening in that steam trap. Twenty percent of traps cause about 80% of our issues. We can focus on those and make sure we know what’s going on.”

Another application for the acoustic monitor is relief valves. “It will tell us if that relief valve leaks,” said Murphy. “In addition to savings on the installation of wireless devices for monitoring the relief valves, we have savings associated with fugitive emissions. We can make sure we know the relief valve is closed, and that’s potential annual savings of $3.2 million.”

Cooling towers are another critical asset with the potential for savings. “Common threats to cooling-tower health are hydrocarbons leaking into the water, scaling of the water, corrosion, improper blowdown when chemicals build up in the water, biological growth in the water, high vibration or bearing temperature on fans and pumps, and restriction in the water flow,” explained Ed Sanders, senior sales representative in Emerson’s Rosemount business. “Cooling-tower monitoring is often remote, and repairs often come as a result of time-based manual monitoring. When you’re checking the cooling tower manually, it’s easy to miss issues that trending data would tell you.”

There are approximately 200 process pumps in the average refinery, chemical or petrochemical plant, and most of them aren’t monitored, added Sanders. “Only 10% of the most critical pumps have on-line health monitoring, and 40% of process pumps are considered essential,” he said. “Every pump will fail or suffer degraded operation every 12 or 13 months. On pumps, we monitor cavitation, bearing failure, pump seal failures and abnormal operation. Information gets fed into the pre-engineered software algorithm, which can first pull together a baseline, and then you can have a trend and develop alerts and early warning systems.”

“Electrical power also is important for critical asset monitoring,” added Melissa Toten-Simmonds, senior sales representative in Emerson’s Rosemount business. “If you don’t have power, none of the monitoring will matter. The majority of critical assets in the field are greater than 25 years old, and less than 5% of installed critical assets have continuous monitoring integrated. The main factor for failures is temperature. IntelliSAW is a way of wirelessly monitoring electrical assets and reducing the impact of the three main power-failure modes—poor connection, insulation degradation and air dielectric breakdown.”

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