Tunnel vision

Danger to the public, environmental clean-up costs and ongoing loss of throughput in a line that remains shut down while regulators assesses an operator’s entire program are major costs that can impact the bottom line and also the operating company’s share price. Needless to say, executive liability is also a serious issue. With this in mind, monitoring pipeline integrity and ensuring safe operation and inspection have become hot issues in the oil and gas industry. O&G spoke to FOX-TEK’s Dr Essam Zaghloul and Netherlocks Safety Systems BV’s Albert Buschgens to find out how they are tackling the some of the problem areas.

O&G. What traditionally have been the limitations and challenges in effectively inspecting and measuring pipeline points of concern?

EZ. We believe that, over the years, the operating companies have done a really good job of maintenance. In the past, inspection was done from the ground and was perhaps not as frequent as desired for critical points. Airborne surveying with remote sensing was an advance, as was pigging for lines that are amenable to that technique. Cathodic protection and advances in coating have reduced challenges associated with external integrity. It is fair to say that the number of dollars spent on maintenance today is much more effective than in prior years. Cleaning pigs and inhibitors are assisting today.

However, there are more kilometers of pipe than ever before, and there is a larger driver then ever to operate at top efficiency. We believe that the operator’s biggest problem today is to spend the dollar he has as wisely as possible. The age of the pipeline need not be a factor. The biggest issue (e.g. from corrosion, deformation such as bending or structural fatigue/cracking from older seam welds) is to inspect the ‘points of concern’ as often as needed, without the costs of inspecting the entire line, without site access charges, without digging, but with high sensitivity. If the goal is to see changes of one or two millions per year as a threshold for action, then the tools an operator uses must have the sensitivity to do that.

AB. In terms of pipeline points of concern, we are focused more on the safety of the pigging procedure rather than the quality of the pipeline itself. Before an intelligent pig or standard pig can be inserted into the pipeline, we have to use a launcher or receiver. The procedure is extremely dangerous, and there are operating companies that neglect the danger and do not protect this operation from human error. Our challenge is to convince users to add interlocking systems to safeguard people and the system. Incorrectly operated valves could lead to damaged valves, doors and could even injure or kill people. Unfortunately, some loss-of-life has happened already.

O&G. The safety of workers in the O&G industry is paramount. How do technologies such as your own contribute to the industry’s efforts in this area?

EZ. FOX-TEK monitoring systems work at points of concern in a non-intrusive manner. The sensors work on buried/insulated pipelines, so there is a need to expose workers to risk only once to make the installation. As the pipeline degrades, the condition can be measured from a safe remote location. Telemetry options mean there is no need for staff site visits and this lowers the cost of labor and reduces concerns over safe access. For sites that only need inspection a few times per year easy access (up to 2km away from the monitoring point) remote monitoring means simpler staff visits – no hiking in from a road to trail. FOX-TEK systems do not require a line to be de-rated or shut down for installation or use of the sensors, unlike some systems in which a probe is pulled out for replacement or cleaning. Staff do not have to work with valves, tee fittings, probe holders or open lines.

AB. This is our area of expertise. Pipeline maintenance always starts with the insertion of standard or intelligent pigs. It sounds simple; however, the procedure to launch or receive a pig is quite complex. Since the procedure of launching and receiving involves the operation of many valves in a predetermined strict procedure, it is subject to human error. Most of the international operating companies integrate key transfer devices in their valve switchover procedure. The key transfer devices guide the operator step-by-step and the safety of workers is guaranteed.

O&G. How do your products/technologies provide a viable alternative?

EZ. Our monitoring systems reduce risk because monitoring data is available whenever it is needed. For example, if an inspection for bending and soil stability is done at the start of the wet season and movement is seen, a monitor can be immediately placed there with remote telemetry and data can be analyzed up to several times a day, to monitor essentially in real time. Work crews dispatching can be done as required.

FOX-TEK systems also improve asset life. If a cleaning and inhibitor program is in place, sensors can monitor until no wall thinning is seen to prove that the program is working. With this information, chemical dosage and cleaning frequency can be adjusted to optimize benefits versus costs.

AB. Key transfer systems are mechanical ADD ON products that ensure nobody can make a mistake: a vessel closure can only be opened if the system has been purged, drained, free from over-pressure or released from dangerous gases like H2S. Furthermore, key locks assure that the main or kicker line valve can be opened while the door is opened while somebody could be in the vessel. Key interlocks eliminate all possible danger.

O&G. Have you seen any particular trends in demand and, if so, what do you think is driving that?

EZ. We have many clients that are very interested in our systems. This interest is related to the paradigm shift I have been alluding to above. If one invests a little to monitor wisely, the payoffs are huge – not just in reduced maintenance, but also in increased throughput, longer asset life and reduced risks. Many departments benefit.

AB. The demand for valve key transfer locking systems is now greater than ever before. The global trend for contracting outside operations inevitably translates into the ‘casualization’ of labor, which in turn leads to an increased risk of accidents through human error or deliberate violation. Well-designed interlocking systems can mitigate these risks, either by eliminating error or by greatly inhibiting the potential for violations. Such systems are always operator friendly – they require no additional effort on the behalf of the operator than normal procedures would require and, most importantly, should never permit more than one key to be free at any one time. The message is ‘keep it simple and let’s make it safe’.

O&G. How are you investing in R&D to further improve the performance or range of your technology? What untappped potential do they hold?

EZ. FOX-TEK is a leader in new methods of monitoring. We have ideas queued up already to implement and prove in the field. Ideas are not the limiting factor. Field access and operators willing to try new methods are the barriers for us.

AB. R&D is a daily process. Everything that we design is aimed at improving the operators’ performance. The following often-quoted, unattributed statistic is an interesting illustration why: 70 percent of reported incidents in the oil and gas industry worldwide are attributable to human error and account for in excess of 90 percent of the financial loss to the industry. Pipeline pigging is an extremely dangerous operation when not done safely. Key interlocks guarantee safety by eliminating human error.

O&G. When a new product or service saves money in many departments but only one department has spent money on the initial purchase, how does that department get budgetary relief (and also time and credit) for ensuring others hear about the benefits and buy-in?

EZ. We find that oil and gas producers, pipeline companies, refiners and bitumen (tar sands) processors have different departments. These groups do speak to each other, but it is not clear that they can trade budgeted funds, or that they are able to share credit when an advance occurs or an incident is prevented. The risk department may have one timeframe and set of success metrics, while central engineering has another. Central engineering may be thinking three years ahead, while the regional managers (who frequently have line responsibility) have immediate challenges and funds fully committed one or two years in advance. All departments respond to overall cost controls. The organizations work and deliver, but as is often the case, inter-group communication may at times suffer due to pressure of work.

AB. We always discuss with the users the total installation and operation costs. Procurement does often buy on price, and too often they have a list with approved suppliers so that they can pick the cheapest. However, these lists are often outdated. For a company to have a better idea of what they buy requires them to add more disciplines to their decision-making strategy, and these should include initial cost, measuring cost, mounting cost, maintenance cost and operator friendliness. This is why we prefer to speak to purchasers, operators and trouble-shooters. These three disciplines understand that the final installed and operational cost of our products is often the lowest, and that they are often the most operator-friendly.

Buying-in is difficult if you work with contractors that have an EPC contract. They can buy each product that is mentioned on the approved vendors list. If they save money, they will. This means that the end-user must be involved and accept to pay a premium in case a contractor asks for that. Another solution is to have a properly written project specification that excludes all improper products.

O&G. When new systems, products or services are rolled out and proven in service, how can companies ensure benefits and operating issues are documented? Why is this important?

EZ. We always ask a client if he is interested in publishing a case study with us, after a system has proven itself in terms of benefits delivered and all company security issues have been addressed. Many companies are delighted to have this occur, as the paper will first appear in their internal company news bulletin. Staff see advances and can apply the advance to suit their needs. After that, the presentation at a major conference allows benefits and the positive operational impact to be discussed with peers. Peer discussion always adds more value to the advance, by enhancing the application, or validating its usefulness from similar experience.

AB. The systems that we supply need to be transparent, easy-to-operate and strong, and because our products are so widely used, we know that operators will feedback immediately as to whether they work or not. Our after-sales service will report and document any findings from the feedback, whilst the benefits will be recognized immediately during a technical review. Of course, everybody knows that the requirements of ISO mean you need to offer a company satisfaction review, and therefore we always look for feedback from the users after a certain period.

For suppliers, items that are good sellers need to be well documented so that you can discuss the benefits of these solutions with the users and also improve your own knowledge. For end-users, it is important to have a documenting process in order to select the product that benefits the company most in the future.

O&G. Research departments do not appear to have a mandate to assist in rollouts; intra-department charge-back schemes exist, tight budgets are the norm and workloads are high. Are these disincentives for line groups to take extra time to assist on introductions? Does innovation suffer as a result?

EZ. We have the highest regard for our clients and all the departments that support operations and maintenance. It may be that ‘devolution of authority’ and ‘every department as a profit center’ management styles occasionally mean that line groups end up feeling isolated. Sometimes corporate policies also produce longer decision times, due to the need for everyone to buy in, share budgets, etc. One of our major clients has just organized a new ‘corporate SWOT team’ with its own capital and operating budget and engineering staff, to help the line departments roll out and run new systems for the first year. The SWOT team operates with central engineering, but is oriented to field success, not forward-looking assessment and lab trials. The line departments do not have to spend time to make a special budget change that year, and they do not have to stretch their heavy workload to examine the new method, do the analysis and figure out how to integrate the data back into daily operations. Perhaps such teams are the wave of the future. Other clients have an implementation team that takes R&D ideas and rolls them out across the company.

AB. Netherlocks has a dedicated design and research department with its own budget to ensure this doesn’t happen. After all, if you kill innovation, you shoot yourself in the foot. If you try to supply products of lower quality, the stigma will follow you for years – not just in terms of cost (i.e. maintenance), but also in terms of loss of reputation as well.

Dr Essam Zaghloul joined FOX-TEK as President and CEO in 2006, and is charged with building the foundation for FOX-TEK to assume leadership in the oil and gas industry with its corrosion monitoring and structural integrity systems. With strategic relationships in key markets, Dr Zaghloul brings to FOX-TEK an impressive track record of growing oil and gas and technology companies.

In 1993, Albert Buschgens started Netherlocks Safety Systems BV, a manufacturer of safety and drive systems. Over the past 10 years, Netherlocks has created the unique ADD ON safety philosophy, enabling it to purpose-design units that can be mounted onto the host valve in order to increase safety and operability without downtime. In the last five years, Netherlocks has specialized in safeguarding launcher and receiver procedures.