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RESEARCH AND BRIEFINGS

Best Practices When Postponing Inspections in Downstream Energy

 


The energy industry is experiencing record low oil prices and an unprecedented downturn in output, partly due to oversupply, and partly due to decreased demand as a result of COVID-19-related lockdowns. For many companies this may result in financial distress.  

In a recent survey of the energy and power industry, Marsh JLT Specialty found that all respondents were considering cost control measures. Most companies protected critical maintenance, but non-essential maintenance was often reduced or delayed. More than a quarter (28%) of respondents had already reduced or delayed non-essential maintenance. Another 50% were considering or planning to do so.

For those with turnarounds to consider, almost 40% of respondents were either considering postponing turnarounds, or had already done so. We explore some of the key factors when considering deferring inspection dates, and highlight some of the questions businesses need to answer beforehand.

This guidance assumes that the site has well-established management systems that set the foundations for managing inherent process safety risks, including process safety, operational, inspection, maintenance, and emergency response management systems. On that basis, the site is expected to have set inspection dates and established inspection strategies for all fixed equipment.

Inspection Postponement Process

Owners can improve their confidence when inspection postponements are required by following the below process.

Early stakeholder engagement – A multidisciplinary assessment team should work together to consider potential issues, such as equipment integrity and capability of releasing equipment from service (that is, difficult versus impossible). This will help to ensure transparency and a strong technical basis for the postponement.

Standard deferral process – A well-documented standard that defines the deferral process — approved and owned by the inspection manager — ensures that decisions are based on process safety and asset integrity.

Detailed documentation for mass deferrals  – Process unit(s) deferrals can be complicated and require extensive reviews from a range of disciplines.  These deferrals should list and assess each individual piece of equipment regardless of fluid categorisation, regulatory requirements, or risk of a loss of containment. To justify the deferral from a technical perspective, capture all unique equipment numbers and additional information, including regulatory requirements, risk prioritisation, and release options.

Assembling an assessment team of specialists – Although the technical basis for deferral should be formally approved by the inspection manager and asset owner as a minimum, the level of technical assessment required means that for most deferrals additional specialists should be engaged, including:

  • Inspection/corrosion engineer to identify degradation mechanisms that exist and their impact in the event of a deferral.
  • Operations shift leader to determine possible alternatives to release the equipment for inspection without affecting the rest of the unit.
  • Mechanical engineer to assist with determining the equipment’s remaining life by reviewing in more detail the basis for the inspection due date.
  • Process engineer to assess the actual operating condition and likely variance over the extended duration.
  • Process safety engineer to review equipment that could result in major accidents.
  • Maintenance to confirm that the remit set by inspection and engineering is feasible and achievable in the timeline agreed.

Download the full report.