Maintenance Turnarounds are major events for refineries and petrochemical facilities. They typically cost large sums of money to execute. But the cost of executing the turnaround is often dwarfed by the â€śopportunity costâ€ť of production lost while the facility is shut down. Hence, historically, the development of accurate estimates and strong cost controls has taken a back seat while the focus has been placed on driving the turnaround schedule to minimize the lost production time. However, in recent years, refineries have become more interested in accurate costs as refining margins have narrowed. Similarly, petrochemical plants, where the production opportunity cost driver is less, are also beginning to focus on ideas for improving cost estimating and control.
The technical literature available to the cost estimator wishing to learn more about estimating for capital projects is prodigious. But there is a dearth of similar literature on estimating for turnarounds.
This paper examines the different estimate methodologies used to calculate the base estimate for a turnaround and the effectiveness of those methodologies. It then moves onto a discussion of how allowances and contingency are typically dealt with in turnaround estimates and draws on ideas from the project world to suggest how the calculation of these items might be improved.
Many industry turnarounds are executed in conjunction with one or more large capital projects that serve to heighten the complexity of the event. The interface between the capital project and turnaround teams has historically been one of the most difficult to manage and is even more critical when large projects are involved. Case studies and data will be utilized to substantiate the impact a large capital project component will have on the turnaround event and the metrics for success of the outcome. Best and emerging practices for these high complexity turnarounds require more advanced planning, coordination and alignment between the capital project and turnaround execution teams; and these best practices are the focus of this presentation.
This article examines the allowances and contingencies that are needed in Turnaround estimates, the different methods used for calculating them, and how much money is typically allocated and required. From this, it provides some â€śrule of thumbâ€ť benchmarks for turnaround estimators to use.
It then will discuss how the benchmarks might be refined, the advantages of tracking the use of allowances and contingencies during execution of a turnaround, and finally some recommendations for steps that estimators can take to improve their estimating capabilities for allowances and contingencies.
The article is available on the Oil & Gas Journal website, here: www.ogj.com under the article reference â€śLawrence, G.R.: Analysis Yields Turnaround Benchmarks for Allowance, Contingency â€“ Oil & Gas Journal, April 2nd, 2012 pp 106-11â€ť
Approximately 1 in 4 turnarounds are considered to be total â€śtrain wreckâ€ť failures, and nearly 80% of all turnarounds do not meet established goals. Organizations with best in practice processes and procedures can find themselves mired in failure. The reasons for these failures can be complex, subtle and rooted in an organizationâ€™s fabric. As such, teams often do not identify their functional shortcomings until it is too late to effect positive change.
A compelling case will be presented for aggressively driving towards an optimum state of readiness by showing industry data relationships between turnaround readiness and outcomes. The paper will describe the preparation practices that are critical for achieving optimal readiness. The paper will also focus particular attention to the key deliverables and interfaces of operations, maintenance and reliability plant personnel in the context of turnaround excellence.
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