The Importance of On-Site Observations and Witnessing at Refineries

In our capacity as refinery planning and economics consultants , a pivotal facet of our initial assessment involves meticulous observations and active engagement in operations. This approach enables us to firsthand gather information on existing workflows, identify potential issues, and unearth opportunities for value creation. Engaging in discussions with frontline operators and witnessing operations allows us to discern any deviations between planned steps in Standard Operating Procedures (SOPs) and the actual steps performed.

During a recent site visit to a client facility, a significant discovery was made concerning the over-utilization of diluent in the crude blending process to meet the pipeline viscosity requirement. This discrepancy was attributed to a non-ASTM compliant sampling location, methodology, and frequency, prompting a comprehensive review of the blend control process. Implementing our standardized audit and witnessing tools revealed the need for a revised sampling program, leading to substantial cost savings.

For successful site visits, adhere to these guidelines:

1. Ask questions and observe: Engage with frontline workers, formulate pertinent questions, and be mindful of time constraints. This approach helps uncover insights  and perspectives, validating information from reports.

2. Document everything: Thoroughly document discussions, take pictures or videos with permission, and summarize insights immediately after the visit. Visual documentation aids in data collection and retention, facilitating the identification of opportunities and implementation of solutions.

Additionally, as implementation consultants, it is crucial to build trust during field visits. Spend time explaining project objectives, emphasizing collaboration, and addressing concerns. Operations personnel should feel integral to the problem-solving process, fostering ongoing dialogue beyond the site visit(s).

Observation and witnessing are integral to Trindent’s solutions, aligning seamlessly with our client's sustainability plan. As refinery planning and economics consultants, we bring a fresh perspective to optimize  processes and drive economic efficiency.

Reach out to our team on LinkedIn.

This article was written by Tareq Chowdhury, a Senior Consultant at Trindent Consulting.


Path To Net Zero


Introduction

The 24th World Petroleum Congress (WPC) held in Calgary, Alberta brought over 15,000 visitors and 5,000 delegates worldwide to discuss the industry’s energy transition and path to net zero. The United Nations projects that the world population will reach 8.5 billion by 2030 and 9.7 billion by 2050, leaving billions of people who must be brought out of energy poverty. There is clearly a challenge at a play – how should the industry that is currently supplying approximately 30% of the world’s energy demand lead its energy transformation, while balancing social governance, reliability, economic viability, and a sustainable future?


Key Takeaways

At this year’s WPC, it was encouraging to see innovative technologies and solutions that are in the pipeline to help achieve net zero. One of the presentations that caught my attention was around the application of dimethyl ether (DME) and its recovery technology – while the steam assisted gravity drainage (SAGD) helped pioneer the rise of Canadian oil sands and its direct land footprint is relatively small, the process is costly, energy intensive, and extensively consumes water and natural gas. Most of the water from SAGD operations can be recycled, but approximately 10% must still be disposed and carbon dioxide emissions are at par with combined operations from mining and upgrading. DME displays affinity to bitumen and DME based recovery technology promises to reduce breakeven cost from $40/bbl to $8/bbl, mitigate energy consumption by 90%, eliminate water and steam generation facilities, and increase recovery rate by up to 300%. The provincial government also announced at the WPC that it will invest $7 million into a study conducted by Cenovus Energy on how small modular reactors (SMRs) can be used on oilsands operations. Having also worked in the nuclear industry, this announcement was also particularly interesting as SMRs have been thought to have applications in both public and private institutions. SMRs have a smaller footprint, allowing them to be prefabricated, shipped, and installed on locations not suitable for traditional nuclear power plants.

The examples provided above are two of many initiatives that are being taken by the oil and gas industry. However, the biggest challenge and a common theme that emerges is commercialization. Taking the DME recovery technology as an example, there are no practical applications to date and there is no concrete timeline on when it may be adopted. DME can be produced indirectly from methanol via dehydration reaction and a combination of auto-thermal reformer and direct DME synthesis, but the supply of DME is currently limited. With SMRs, there are still many unknowns surrounding cost and efficiency. Between Canadian Nuclear Safety Commission approval process, public hearings, site preparation, licensing, and construction, it can easily take 10 years start to finish. Even on the most aggressive timeline in Ontario where Ontario Power Generation is building SMRs as part of the Darlington New Nuclear Project, SMRs will not produce power until 2029. Finally, access to infrastructure, limited grid coverage in rural areas, and cost of grid connection for rural electrification can extend the timeline.


Conclusion

So what does this all mean? For realistic energy transition, where energy security, affordability, and economic prosperity can continue to occur, investment in oil and gas must continue. We must stabilize our climate and protect the environment, but in my view, turning off 30% of our energy supply is not the solution. There must be a balance where we hold the government and companies accountable, while working with the industry to implement sustainable solutions.

Reach out to our team on LinkedIn.

This article is written by Kevin Kim, Associate Principal at Trindent Consulting.

 


Optimizing the Hydrocarbon Value Chain

Overview

Refining companies have a multitude of lucrative coordination opportunities in their efforts to turn hydrocarbon resources into finished products.

In recent years, refiners have suffered with skills shortages, where crucial skillsets left the organization. At the same time, there has been a proliferation of data that makes decision-making more complicated, and after constant reorganization, the inter-departmental siloing of responsibility makes optimization across the total value chain more difficult to achieve.

Any hydrocarbon value chain improvement initiative must first have a clear set of objectives. Some companies seek to optimize working capital, and deployment of liquid inventories. Others seek to configure for optimal margins, while others are most interested in operational flexibility, and ensuring maximum throughput from refining assets.



Organizational Participants

In our view, there are as many as ten discrete departments that must work together to maximize the total hydrocarbon value chain.  In general terms, they are:

Trading – Product exchange for alternatives to production, and getting the right crudes and feedstocks to maximize added value.

Planning – Identifying decision drivers through optimization including crude selection, operating conditions, stream dispositions, product blending and demand allocations;

Scheduling – Translating the planning decision drivers into a feasible and achievable set of execution instructions while minimizing logistics cost;

Process Engineering – Providing rigorous, technical process insight and direction that informs operations and planning and scheduling modelling requirements;

Refinery Operations & Maintenance – Executing safe, reliable and optimal production and providing current information that enables well informed plans and schedules;

Logistics – The movement of refined products to their final destinations efficiently and by the lowest practical cost.

Distribution – Placing product in quantity into the highest margin markets;

Production Accounting – Managing hydrocarbon losses and providing quality reconciled “actual” data;

Master Data Management – Providing a unified quality data for performance analysis;

Performance Analysis – Providing measurement and visualization capabilities that facilitate collaborative enterprise optimization and management of past, present and predicted performance.


The Functional Landscape

Below is a map of the functional landscape that illustrates some of the opportunities that are available for optimization at any given time:



Starting Points

Ensuring a uniform, latent and accurate set of data is helpful. Often outdated prices, incentives, and inventory positions make ‘optimizing for yesterday’ a phenomenon. We typically will commence an improvement project with a focused effort on making the refinery material balance more accurate and trustworthy. Further, there are number of techniques to improve the physical visibility of crudes and products in transit, giving them more of a real-time.

The planning process and cycle is also very important. Does manufacturing disregard aspects of the plan? Are changes to the plan adjudicated swiftly, with clear roles and accountabilities? When market opportunities present themselves, how long does it take to amend the plan? Does manufacturing chase day-to-day economics, or look to optimize over the longer term?

Better communication around maintenance events and upsets is also a common starting point. Although no one can accurately predict when an asset or unit will resume operation following a period of unplanned downtime, better focus on progress communication can help to mitigate maintenance changes to the plan. While a lot of focus has been placed on maintenance backlog reduction, overall expense reduction and reliability improvements, there needs to be an acute focus on mean time to repair (MTTR) and how status updates are provided beyond the refinery fence line.


Emerging Considerations

Carbon accounting will undoubtedly become a more important consideration in optimization. With carbon pricing, carbon capture and storage, green hydrogen, and renewables of all forms are becoming part of the equation to optimize, value chain optimization professionals need to at the total bottom-line.  Recent changes instituted by the US Inflation Reduction Act only make these considerations more financially relevant.


The Payoff

In our experience, the optimization benefits available will include hundreds of millions of dollars in free-flowing cash from better working capital management and decisions. The achievement of a sustainable cost reduction across the value chain equivalent to between fifty and one hundred fifty cents is also entirely achievable. A well-oiled hydrocarbon value chain is also less susceptible to shocks, more responsive to capturing general interest economics, as well as delivers a more robust supply to ensure that refining assets perform at their optimal rate.

Looking to connect? Reach out to our team on LinkedIn.

This article was written by Adrian Travis, President of Trindent Consulting

 


The Path To Turnaround Time Improvement

We’ve all used John Ray’s adage, “Haste makes waste” to demonstrate that doing something too quickly causes mistakes and results in the waste of time, effort, and materials.   And we’ve all experienced situations where we were asked to “work faster” only to subsequently face quality problems.  

Similarly, many organizations who strive to eliminate waste often go about it the wrong way, making mistakes at the expense of Turnaround Time.  At Trindent Consulting, we specialize in helping your teams accelerate work while maintaining quality and reducing waste.

Be Little to Increase Speed

Turnaround Time is the amount of time it takes to complete a process or request.  It’s made up of Lead Time (the time between the initiation and completion of a process), Non-Value Time (time spent on a step in the process that adds nothing to the finished product), and Value-Added Time (time spent that improves the outcomes of a process), and has a direct impact on labor efficiency and cost.  

Companies frequently address slow Turnaround Times by focusing on the average completion rate of tasks through process automation or digitization, but then miss much bigger opportunities by forgetting to use Little’s Law to address issues with Lead Time.   

Little’s Law states that Lead Time equals the amount of Work-in-Process divided by Average Task Completion Rate.  The speed of any process is inversely proportional to the amount of Work-in-Process.  Therefore, identifying and eliminating unnecessary activity will inevitably improve Lead Time.  Decreasing Work-in-Progress increases speed and shortens Turnaround Time without needing to address average completion rate.  

Optimizing Turnaround Time: What’s Your Process Cycle Efficiency?

Often organizations don’t know if their Turnaround Time can be improved, or how to begin to tackle the issue.  They don’t have the tools or knowledge to measure Process Cycle Efficiency (PCE), which shows what percentage of Turnaround Time is waste.  Process Cycle Efficiency is calculated by dividing Value-Added Time by Total Lead Time.  Decreasing Lead Time increases speed and decreases process Turnaround Time.  

Measuring PCE allows companies to quantify the opportunity by process or workstream. A low PCE indicates opportunity to initiate improvement engagements.

Conclusion

Legendary UCLA Basketball Coach John Wooden used to say, “Be quick but don’t hurry”, meaning do the activities that matter with speed but with accuracy.  

Speed doesn’t have to hurt quality and can provide a competitive advantage in service cost if you decrease Turnaround Time by focusing on the biggest part of processes using Little’s Law and Process Cycle Efficiency.

 


Oil and Gas Industry: The Path Forward

As 2021 unwinds, the Oil & Gas Industry and the global energy landscape are experiencing significant shifts. After an extremely challenging year in 2020—wherein this sector experienced major disruption caused by simultaneous price collapse, supply glut, unprecedented demand decline, and a health/economic crisis—the outlook remains uncertain.

Aside from industry fundamentals, other forces remain at play. Amid shifts in major trends, such as emerging technologies, pressure to act on climate change, new regulations, changes in consumer demand preferences and investor activism, most experts agree that a permanent shift in the energy demand curve has taken place. Concerning fossil liquid fuels in particular, there seems to be consensus that demand will rebound to previous levels and grow, albeit at a slow pace, over the next decade and then decline gradually rather than suddenly, depending upon the regulatory pressure on emissions. However, long-term oil demand will remain pressured by several factors such as reduced growth in automobile demand, enhanced engine efficiency in road transportation, and appetite for electrification. As such, oil remains exposed to large swings in all scenarios developed by forecasters. Gas is the lone fossil fuel whose demand is expected to grow significantly in the next decades. Regardless of the outlook and the trends for energy transition, all scenarios have a common theme: that fossil fuels will retain their fundamental role in the energy sector for the next 30 to 40 years.

Recovering From 2020

Worldwide, the Oil & Gas sector experienced great financial turmoil last year during the pandemic. Hundreds of thousands of workers lost their jobs, others were laid off and refinery sites in the U.S. and abroad were permanently shut down. As demand recovers to previous levels, fewer refineries are available to produce the fuels required, and, upstream, about 40 million barrels per day of new production are needed despite severely restricted capital expenditures.

Thus, while the lion share of the attention is focused on electricity, “gray” vs. “green” hydrogen and renewable energy, the 131 remaining refineries in the U.S. still need to refine the petroleum products which drive more than 90% of all transportation; the plastics utilized in PPE manufacturing; the isobutane, propane and propylene used as refrigerant for vaccines and medicines; and the naphtha used as raw material for polypropylene syringes. In addition, about 50-60% of all homes in the U.S. are heated by natural gas. The other half use electricity, though natural gas is responsible for nearly 40% of electricity production, too. In net, fossil hydrocarbons are practically everywhere. Given its role in supplying affordable energy, this sector is too important to fail.

The Path Forward

What then is the path forward for the market participants in the Oil & Gas space? Refining and Marketing independents and Major Oil companies may accelerate their pace to invest in renewable energy due to increased Shareholder pressure to go green driven by the Environmental, Social and Government (ESG) trend and government policies that reward renewables and penalize Oil & Gas. However, despite highly heralded green energy goals, Oil & Gas companies already have a business that is critical to the next few decades. As such, Shareholders and owners need to focus on creating value in the midst of these new conditions, as the industry is entering an era of intense competition and rapid supply response driven by technology.

In the case of refiners there is a heightened incentive to redirect efforts after last year’s turmoil to ensure short- and long-term success. All companies predictably acted to protect employees’ health and safety and to preserve cash, for example by cutting or deferring discretionary capital and operating expenditures and, in many cases, distributions to shareholders. As predicted, these actions were not enough for companies that were financially hard-pressed. Refiners will continue to experience wild swings in inventories, demand uncertainty and changes in the political climate which will continue to affect the stability of this sector. To adapt to these fluctuating environment, leading companies continue their focus on continuous improvement projects with high ROI and short breakeven or payback periods.

The pressure is ever mounting to extract all possible value from optimizing refineries and their supply chains and seizing new opportunities for margin improvement through digitizing refineries. At Trindent, we double down on our recommendation at the beginning of the year: “Refineries should be focused on creating value through precision, limiting product exceedances of minimum-quality requirements by improving product-demand forecasting, blending processes, or using in-line measurement tools. Refiners with optimized operations planning spend less on the components that make up their finished products.”

To operationalize our recommendation, here are some of the areas we have focused on with our clients:

  • Identifying the value and finding the “cash register.”
  • Setting up the right processes and workflows, including identifying and redeploying the team’s roles and responsibilities.
  • Integrating existing software and hardware solutions (e.g., process design, supply chain planning, refinery scheduling, advanced process control, data historians and predictive asset performance management) with real life data and operations to ensure that our clients extract the full value of the tools they have invested in.
  • Making sure that advanced technologies such as in-line analyzers have proper modeling plans, as well as calibration procedures, to ensure property analysis precision and profitability when utilized in conjunction with Distributive Control Systems (DCS) Advanced Process Control strategies for blending refinery fuels.
  • Making sure there are appropriate diagnostic monitoring tools to ensure in-line analyzers quality control.
  • Ensuring a robust Quality Assurance program in data measurement activities, as well as promoting communication between the data testing facilities and operations for validation programs and control & optimization processes.
  • Proper use of statistical tools and models to ensure appropriate input to Advanced Control tools such that the tools are tuned and used with unclamped limits for optimization.
  • Ensuring proper maintenance (preventative and conditions-based) for analyzers and field instrumentation that are part of the refinery digitizing efforts.

Conclusion

In the longer term, significant shifts in the sector’s fundamentals will continue, and government policies will drive the magnitude of the transitions. Meanwhile, success today and in the coming decades is contingent upon developing efficiencies and rapid responses to ever changing conditions. Trindent is uniquely suited to helping our customers achieve those goals and reposition for the future.


Management Consulting in Healthcare

In their work, management consultants use their skills, knowledge, and expertise to enhance management and organizational performance by driving process improvements.  The changes they generate and implement bring value to a company through proactive and reactive improvement efforts that can help any organization course-correct its operations and obtain higher standards of performance and efficiency. 

What Is Healthcare Consulting?

Healthcare consulting is based on the same principles used in other areas of management consulting to help identify and implement improvements.  But healthcare is a complex industry and implementing change in these organizations is often more difficult than in other sectors.

There is an extra level of challenge for consultants in healthcare because it encompasses a wide area; from the smallest hospital operating rooms to the largest global medical manufacturing giants.  Healthcare consulting can mean you’re spending your days at the head office of a hearing aid manufacturer, observing a medical devices warehouse to find supply chain improvements, or donning scrubs in a hospital’s sterile environment to analyze turnaround times for surgical equipment.

The Need for Focus

To be successful in the healthcare industry, and to effectively tackle its unique complexities, consultants need to be highly specialized and have deep but focused expertise.  At Trindent, our focus falls on these three areas:

Medical Devices

This is a rapidly developing area of healthcare, one that’s increasingly facing the need for improved manufacturing and cost reductions to remain competitive while still adhering to strict industry standards.  In this sector, Trindent Consulting has helped clients with supply chain optimization, customer service improvements, and rapid procurement practice responses to eliminate unnecessary losses.

Hospitals

Facing financial constraints and healthcare reform, hospitals are constantly feeling the pressure to do more with less while still trying to improve patient care and safety.   This is often a difficult and overwhelming situation, but another area where Trindent has proven experience.  We work with hospitals to optimize their facility effectiveness so they can keep their focus on the wellbeing of their patients.

Pharmaceuticals

The complexities of this industry sector are no surprise.  With zero-error requirements, new sterilization regulations are putting a strain on the supply chain management efforts of many pharmaceutical companies.  Leaning on the experience of healthcare consultants like Trindent to help manage the ever-increasing intricacy of their supply chains allows pharmaceutical companies to improve their productivity and keep their operations running optimally. 

Unique Ability to Advance Healthcare

Within these three areas, healthcare consultants have the ability to help advance the industry forward.  Using management consulting services allows organizations in the healthcare industry to reach higher standards of performance and efficiency so they can continue to drive progress and innovation.   

Trindent specializes in assisting healthcare companies.  We understand that pricing pressures, healthcare reform, and complex routes to the ultimate point of care are creating unprecedented challenges for the industry, and we use our deep industry knowledge and experience to help you deliver meaningful and sustainable results.