Paper No.

388

RISK BASED INSPECTION DEMONSTRATING VALUE

Greg Alvarado, Lynne Kaley and Ricardo R. Valbuena

Det Norske Veritas (USA), Inc.
16340 Park Ten Place, Suite 100
Houston, TX 77084

ABSTRACT

Tougher environmental and safety regulations and cost cutting are forcing refiiers and petrochemical companies to
search for new tools to manage the integrity of aging equipment. A Risk Based approach to equipment management can be
used to quantify and compare the relative cost benefits of inspection practices and policies. In the refining and petrochemical
industries, the use of risk analysis as a decision-making tool is gaining industry acceptance. Currently, the American
Petroleum Institute (API) is developing a recommended practice for the use of Risk Based Inspection methodology.

Keywords: Risk Based Inspection(RBI), maintenance, inspection, cost benefit analysis, delayed coking, reliability,
hydrotreater, damage factors, crude slate, naphthenic acid, stress corrosion cracking, mean time between failure (MTBF),
toxics, inventory, H2S damage, corrosion

INTRODUCTION

Risk Based Inspection is a method for using risk as a basis to prioritize and manage the efforts of an inspection
program. An effective risk based program results in a reduced level of risk for a given level of inspection activity. In any
operating plant, a relatively large percentage of the risk is usually associated with a small percentage of the equipment. A
Risk Based Inspection methodology permits the shift of inspection and maintenance resources to provide a higher level of
coverage on the high-risk items and an appropriate effort on lower risk equipment. The methodology can be used to:

Copyright
01999 by NACE international. Requests for permission to publish this manuscript in any form, in part or in whole must be made in writing to NACE
International, Conferences DMision, P.O. Box 218340, Houston, Texas 77218-8340. The material prasented and the views expressed in this
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 1. Reduce overall risk while optimizing maintenance and inspection costs.
2. Evaluate the operational benefits or risks associated with extending time between unit shutdowns.
3. Evaluate the risk and increased maintenance and inspection costs associated with refining opportunity crudes,

Three case studies are presented to demonstrate the value of RBI implementation in three refinery units. Various cost
and risk benefit perspectives are covered.

CASE STUDY 1 – REDUCING RISK AND OPTIMIZING INSPECTION BUDGET COKER UNIT

The RBI study was performed to determine which equipment would require inspection over the next 4 years based on
established risk criteria. The study was performed in advance of a scheduled fall shutdown to evaluate the equipment needs
for inspection to safely operate for the next four year run and evaluate the impact of that inspection plan on cost and risk.
The equipment covered in the study is illustrated in Table 1.

The objectives of the study were to create flexible, credible inspection plan guidelines that would allow the client to:

● Reduce plant operating risk

● Optimize inspectionlmaintenance dollars per activity,
● Demonstrate cost benefit of RBI to the plant management,
● Create useful equipment inspection plans.

Methodology

The working process consisted of data collection, which included the interview of Process, Corrosion and Inspection
personnel, as well as review of equipment tiles. The type of data collected included process information, inspection history
and equipment design data. The type, severity and location of the damage mechanisms were identified as well as the
consequence drivers such as; H2S toxics, the fluids and phases, and inventory amounts.

The quality of the data was checked through interviews with plant personnel familiar with the history and process of the
unit. A Risk Based analysis was performed to calculate risk and identify the risk drivers. The results from the RBI study,
combined with good engineering and inspection practices were used to develop recommendations for inspection that would
reduce the overall risk of the unit. The deliverables of the study included:

1. Identification of the active damage mechanisms and susceptibility affecting the Coker unit equipment.
2. Quantification of the overall unit risk, likelihood of failure and consequence of failure for each equipment item.
3. Development of an inspection plan detailing the inspection methods and coverage for each equipment item based on the
damage mechanisms and rate of damage expected.

Results

The cument risk of the unit was compared to the risk after the targeting 4 year run. Risk in 2002 is shown in Figure 1
assuming no inspection was performed and compared to the unit risk in 2002 assuming the recommended inspection plan is
implemented. Risk is shown in terms of Financial Risk. Financial Risk includes the likelihood of failure, consequence of
failure, and production loss.

The reliability of the unit was calculated in terms of mean-time-between-failure (MTBF) and was improved 16-fold
from the current level as a result of implementation of the recommended inspection plan. This reliability measurement is
relative rather than absolute.

These reductions in risk and improvements in unit reliability were achieved by redirecting the inspection dollars to the
high risk items. As a result, 43 pieces of equipment were removed from the work list and 13 were added, showing a net total

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 of 30 pieces of fixed equipment being removed from the work list. The overall maintenance and inspection budget savings
was $225,000 showing a project Cost Benefit of $175,000, as shown in Table 2.

Those 13 equipment items added to the work list represented unacceptable risk due to active damage mechanisms not
previously identified in the unit. These equipment were inspected for wet HZS damage based on the corrosion and materials
engineering review used during this RIM study. The equipment was analyzed using the identified H2S levels, presence of
water, pH and fabrication practices. Inspection revealed one drum with significant wet H2S damage that had gone
undetected.

CASE STUDY 2- PRODUCTION AND INSPECTION COST BENEFITS NAPHTHA HYDROTREATER UNIT

A common industry practice is to inspect equipment based on fixed intervals, rarely taking credit for 20 to 30 year
design life of equipment and past inspection, operating, and maintenance experiences for similar or identical types of
equipment operating in the same types of service. The equipment inspection interval for this unit was set at four years. Since
this unit was originally commissioned in 1994, the operator used RBI methodology to study the impact of postponing the
scheduled shutdown for 2 more years.

The objectives of the study were to measure, manage and mitigate risks through the use of the RBI methodology
within the constraints of a fixed inspection budget. The Risk Based approach uses a consistent methodology to differentiate
“High” risk equipment from the “Low” risk equipment. This differentiation allows resources to be re-directed toward
equipment identified as “Higher” risk. The study produces relative risk rankings, quantified risk for each equipment item to
determine the overall unit risk. The primary objective was to optimize inspection-related costs and activities. A benefit was
the identification of equipment not requiring inspection until after 2000 as well as identifying candidates for less expensive,
on-stream inspection.

Methodology

The study included 116 pieces of fixed equipment, including reactors, heat exchangers, drums, and piping. Risks
related to likelihoods and consequences of failure (loss of containment/leak) were calculated in terms of injury to employees,
production loss, equipment damage and financial risk exposure costs.

Current risk values were calculated and compared to risk in the year 2000, assuming no inspection was performed, and
then to the unit when the inspection plan is implemented. The total risk presented in this manner gives a graphic perspective
of the increasing risk over time, with and without implementation of the inspection plan (see Table 3). Discreet risk values
were used for each individual piece of equipment to discriminate between equipment in the same risk category (see Table 4).

Development of the inspection plan is performed by evaluating the damage factors for each active damage
mechanism. The focus of inspection planning by damage mechanism provides guidelines for what equipment to inspect,
where to inspect, and what methods are most effective to detect damage.

Inspection tlequency and effectiveness impact the confidence of what the operator believes the actual condition of the
equipment to be, for example;
If the equipment has been in service for 7 years and never inspected and.lor inspected with a relatively “ineffective”
NDE technique then cotildence is low and a higher than expected corrosion rate is calculated.ksed for the likelihood of
failure (leak) probability. Typically, the contldence is increased to optimal, i.e. the corrosion rate or cracking susceptibility
and state are no higher than expected, when the most effective techniques are used at the most appropriate frequencies. This
impacts the probability of leak calculation, which is factored with the consequence calculation to produce the risk rankings.
Results

Only 16’%0 (19 pieces) of the 166 pieces in the study required inspection to satisfy the risk criteria established for this
unit. This involved equipment classified as “High” and “Medium High” risk that were susceptible to thinning (localized and
general), stress corrosion cracking and wet HzS damage. These plans involve visual inspection, ultrasonics, radiography,
automated ultrasonics, magnetic particle, and eddy current testing. Inspections were recommended as on-stream prior to the
2000 scheduled shutdown or internal inspection scheduled during the shutdown.

As a result of the inspections performed between the years 1998 and 2000 or during the shutdown 2000, the
equipment in the high risk category will be reduced from 15 (1‘2.93°/0) to 8 (6.9’ZO).

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 The annualized inspection related costs benefits associated with this unit study were reduced by a conservative
$108,334 per year. Costs to perform the RBI study were $30,000 or 28% of the initial savings (see Table 5), It is anticipated
that less than 10% of this effort will be required to maintain the RBI database per year. The majority of cost was in the initial
population of data and analysis.

Finally, risk exposure reduction was measured for a sample vessel. Safety, equipment damage arealcost and
production loss exposures were considered. Relative financial risk exposure before inspection in 2000 was approximately $2
MM before inspection but was reduced to $61,000 as a result of implementing the recommended inspection planning.

CASE STUDY 3 – EVALUATING THE IMPACT OF CRUDE SLATE CHANGES ON RISK, INSPECTION, AND
ASSOCIATED COSTS CRUDE UNIT

BACKGROUND

In general, refineries have increased the corrosivity of crude slates in recent years. In the continuing drive to improve
profitability, one refinery requested an evaluation to measure the impact of increasing sulfur and naphthenic acid crude
content on the equipment life and inspection requirements and costs of a sweet crude facility.

The refinery typically runs a 0.194.sulfhr crude with naphthenic acid of 0.15 TAN and has experienced few corrosion
related problems in the last 30 years of operation. A study was initiated to evaluate the impact of increasing crude sulfur and
naphthenic acid composition. The objectives of this case study were to:

1. Identify equipment that would experience significantly increased corrosion as a result of the crude slate changes;
2. Quantify the impact of the test crude slates on unit risk compared to the current operation;
3. Quantify the potential inspection and maintenance cost increases when compared to the current inspection program; and
4. Provide guidelines and recommendations to manage equipment risk in the future.

Methodology

A study of the plant history and equipment records was performed including documentation of operational process
conditions through an interview process. The result of the study was a current condition assessment of the unit based on
sweet crude characteristics and available inspection data.

As mentioned earlier, a benefit of implementing a risk based approach is the ability to manage risk and plan inspection
activities over a specified time period. The plan period selected for this study was 10 years (2008) for comparison of risk and
inspection costs. The three crude characteristics run in the study were:

● 0.1% Sulfur and 0.15 TAN

● 0.5% Sulfur and 0.28 TAN
● 0.8% Sulfur and 0.67 TAN
The operational conditions were maintained for each case. No velocity rates were assumed to increase during the
composition changes.

Results

Current risk of the crude unit was evaluated to provide the baseline equipment condition. A 5 X 5-risk matrix of the
equipment showing current risk is shown in Figure 2. Three different crude corrosivities were modeled and risk evaluated for
a ten year plan period to determine the impact of the feed changes on risk and maintenance and inspection costs.

Table 6 shows the number of equipment items in the crude unit study in the four Risk Rank categories after ten years of
processing. Note that the total number of items in the Medium High and High categories increases with increasing sulfur and
naphthenic acid contents.

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 Figure 3 shows the unit accumulated risk for each of the crude slates modeled at the end of the ten-year plan period assuming
the same inspection activity. The risk increases by 16% over 0,1% sulfur for processing of 0.5% sulfiu and 0.28 TAN.
Similarly, there is a 45?4.risk increase for the unit when processing 0.8’XO
sulfur crude and 0.67 TAN compared to the O.l%
sulfur feed.

The impact of processing different corrosivity crudes through the crude unit can be analyzed on the basis of associated
financial risk for each feed. As shown in Figure 4, the relative financial risk of processing o.s~o sulfiu and 0.28 TAN would
be 24% higher than that for processing a O.1% sulfur crude feed for the same 10 year operating period. At the end of the 10
year plan period, the financial risk of processing 0.8% sulfkr and 0.67 TAN crude would be 44V0higher than the financial
risk of processing a 0.1‘Yosulfur crude.

As shown in Figure 5, the impact of processing different crude composition can also be shown in terms of financial risk. If
risk was held constant, the cost of inspection can be determined for each case. The cost of inspection between O.1’?4.and
0.57. crudes did not change. However, the difference in costs of inspection for the 0.894. sulfur crude modeled were
significant. The model indicated that for the ten year plan period, the cost of inspection for processing the 0.8% sulfur, 0.26
TAN feed would increase 66% over the O.1% and 0.5% crude, as shown in Figure 5.

Processing the 0.8’%0sulfur, 0.67 TAN feed significantly increases the inspection costs for the plan period. If an increase in
inspection is not considered, the total unit risk and financial risk exposure of the unit will increase by over 50’Yo.
Investigating the results shows that the 50% items affected by sulfidation would have a higher failure frequency as a result of
the increased sulfiu content. This increase in the number of failures increases the Financial Risk Exposure of the unit. If the
higher sulfir crude were to be processed as a permanent operational change, appreciable risk reduction would only be
possible through material upgrades, i.e. negligible, if any, risk benefits could be attained through firther inspection.

CONCLUSIONS

Case Study 1- Reducing Risk and Optimizing the Inspection Budget in the Coker Unit

1. The RBI study of this coker unit allowed the reduction of the overall risk of the unit by redirecting the inspection dollars
to those items carrying over 80% of the risk.

2, Maintenance and inspection costs were reduced by removing low risk equipment from the work list and identi~ing
vessel alternative inspection methods where vessel entry was not required.

3. A RBI program provided corrosion and materials engineering review that identified equipment where wet H2S
inspection was active but had not previously been recognized. An inspection confirmed the presence of such active
damage in one vessel.

Case Study 2 – Production and Inspection Cost Benefits in a Naphtha Hydrotreater Unit

1. RBI methodology measures risk and allows a relative ranking to differentiate between unit equipment items to optimize
maintenance and impection effort,

2. RBI provides a consistent approach to manage risk over time and selectively mitigate those risks within a fixed budget.
As a result, some of the lower risk items will “float” upward as resources are redirected to higher risk areas to drive risk
exposures down. The result is an overall risk reduction with the potential to reduce inspection and maintenance effort.

3. RBI provides the user with a decision-making tool to increase the inspection interval of this unit by two years. This
approach provided a shorter shutdown for catalyst replacement only and safely deferred inspection, significantly
shortening the unit shutdown time. The inspection and maintenance effort will be spread over a two year period to
inspect equipment using onstream methods whenever possible.

Case Study 3- Evaluating the Impact of Crude Slate Changes on RislG Inspection and Associated Costs in the Crude
Unit

1. Different crude compositions can be modeled to determine the increased risk as a result of higher corrosive composition.

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 2. The operating risk for the unit during the 10 year plan period showed a 16% increase in risk when processing a 0.5~o
sulfur crude versus a O.10/0sulfur crude, An 450/. increase for the unit operating risk was the result of processing 0.80/0
sulfur crude over the 0.1YOsulfur and 0.15 TAN case.
3. The current financial risk of processing 0,8’% sulfur feed would be 24’%.higher than the financial risk of processing a
O.1?4.sulfiu feed. After ten years of operation, the financial risk of processing 0,8’XO
sulfur crude would be 44% higher
than the financial risk of processing a O.l?Losulfur crude.
4. Over the next ten years, the cost of inspection when processing a 0.8’% sulfiu feed would be 66’%0higher than the
inspection cost when processing a 0.1‘Afeed.
5. Cost benefit analysis can provide a basis for decision making-. by considering the overall cost of processing more
corrosive crudes. The increased cost of inspection to maintain the same level of risk can be compared to the savings to
purchase less expensive, and most often, more corrosive feedstock. In addition, the shorter equipment life and impact on
the cost for material replacement and upgrade can be added to show the true cost of opportunity crude on equipment
integrity and remaining life.

REFERENCES
API 581, Risk Based Inspection Base Resource Document.
API 580, Recommended Practice for Risk Based Inspection

TABLE1
SCOPE OF THE RBI STUDY

Type of Equipment Number of % of Total

Equipment !

Drums and Towers 66 10

Heat Exchangers 51 7
I
Piping Segments 571 83
TOTAL 688 100

TABLE 2
CANDIDATE FOR AVOIDING VESSEL ENTRY AND COST BENEFITS

Number of Equipment taken Dollars Saved cost of Overall

out of Turnaround List due by Avoiding the Savings
to their low risk levels Vessel Entry study

30 $225,000 $50,000 $175,000

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 TABLE 3
COMPARISONS SHOWING SHIFTING OF RISK OVER FUTURE PROJECTED TIME PERIODS
COMPARED TO CURRENT (1998) RISK LEVELS

Year 4 (1998)
v Year 6 (2000) Year 6 (2000)
Before Inspection After Inspection
Risk Rankings Pieces % of Pieces % of Pieces % of
I
Total Total Total
High 15 12.93 17 14.66 8 6.90
Medium High 58 50,0 56 48.28 62 53.45
Medium 43 37.07 43 37.07 46 39.66
Low o 0 0 0 0 0
Equipment Total 116 116 116
I

TABLE 4
DEMONSTRATION OF QUANTITATIVE VALUES FOR DIFFERENTIATING OVERALL RISK, SHOWN
HERE IN SQUARE FEET PER YE~ BETWEEN EQUIPMENT ITEMS AND COMPARISON OF THE
VARIOUS DAMAGE MECHANISMS AND THEIR SEVERITIES FOR INSPECTION PLANNING

r
Unique Description 1
Thinning Scc Likelihood Consequence Risk
Equipment Factor Factor Factor Area Sq.’l
ID Yr.
11-V-11 Drum 0.00 412 1 421 520 .010
12-V-12 Accumulator 970 0 970 1530 .148

TABLE 5
TURNAROUND RELATED INSPECTION/MAINTENANCE COSTS AVERAGED PER YEAR ON 4 AND 6 YEAR
BASES TO SHOW SAVINGS. THIS IS COMPARED TO THE COST OF THE INITIAL STUDY WHICH
INCLUDED DATABASE POPULATION AND ANALYSES FOR CURRENT, FOUR, AND SIX YEAR
PROJECTED RISK LEVELS

Turnaround ‘ Cost/Year Cost/Year Annual cost of

costs @ 4 Year @ 6 Year Savings RBI Study
i Frequency Frequency
$2,500,000 $625,000 $416,666 $108,33 $30,000
4

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 TABLE 6
RISK RANKING VERSUS EQUIPMENT COUNT FOR EACH CRUDE UNIT SLATE EVALUATED

Risk
I Current
Equipment

0.1% s;
Count (10 Year Plan)
v 0.5’%0s; 0.8% s;
Ranking I
0.15 TAN 0.28 TAN 0.67 TAN

High 3 4 7 14
I
51 63 61

Medium 1 337 314 303 298

Low 125 121 117 117

4

$1,250,000

$1,000,000

$750,000

$500,000

$250,000

$-
1998 2002 without the 2002 with the
1998 Inspection 1998 Inspection

FIGURE 1: Financial risk in $/year

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 LikdlhwdcatqwY

5 8

4 7

3 25

2 37

1 413

Tatals 71 57 239 123

A B c o E
c~a-mm C.ltalolv

Rid( Rd( Tdak 490

Hidx 3 0.61%

Hun Hidw 25 5,10%

Wdiu’m 337 68.78%

Low 125 25.51%

FIGURE 2: Current risk

Risk comparison for 0,1%, 0.5’?4.and 0.8’%.sulfhr feed

at the end of the plan period with no additional inspection

9,500
8,500
7,500
6,500
5,500
4,500
3.500
0.1% s 0.5% s 0.8% S
Sulfur content in the crude feed

FIGURE 3: Risk comparison at end of plan period with no additional inspection

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 0.1?40s 0.5% s 0.8% S
Sulfur content in the feed

FIGURE 4: Financial risk exposure after inspection

Cost of Inspection by Sulfur Content

0.1 ‘%.Sulfur 0.5~o SU]fUr 0.8”A Sulfur

Y. Sulfur in Crude

FIGURE 5: Cost of inspection by sulfur content

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