Residue Fluid Catalytic Cracker (RFCC) Project in Korea achieved remarkable benchmark targets

Transcription

1 Residue Fluid Catalytic Cracker (RFCC) Project in Korea achieved remarkable benchmark targets Nov. 11, 2009 Presented by Mr. Sook-Hyung(Sam) Kwon

2 Table of Contents I. Introduction of SK Energy II. Background of the No.2 FCC Project III. General Description of the No.2 FCC Plant IV. Initial Project Goals V. Project Execution Strategies VI. Work Breakdown Structures VII. Implementation of Project Execution Strategies VIII. Performance of the No.2 FCC Project IX. Key Success Factors X. Pictures of the No.2 FCC Plant 2

3 I. Introduction of SK Energy Asia s Leading Energy Company - Asia s No.4 CDU Capacity of 1,115,000 B/D - World No.1 API Group III Lube Base Oil Manufacturer - Ranked No.29 in 2007 Forbes Global Top Oil & Gas Companies - Ranked No.74 in 2009 Fortune Global 500 Asia s Leading Energy Company Korea s No.1 Energy Provider - Korea s first oil refining company which was established in Largest domestic market share of 35% in petroleum product sales 3

4 I. Introduction of SK Energy Overall Process Block Diagram of SK Ulsan Complex AR #1~5 CDU LSR NAPH KERO LGO G/C & Me LSR Me Naphtha Cracker Propylene Reformate Reformate Reformer VDU RHDS Acetylene S/B Me MDU Ethylene BRU/Sul/ AEU Mixed Xylene XFU HC VRDS RFCC PE PO/SM PP Bz LBO PX CHx LCO LCN Propylene C3/C4 Acetylene Ethylene PE PO / SM PP Propylene Cyclohexane Benzene Toluene PX Gasoline Jet Fuel Kerosene Diesel Lube Base Oil Fuel Oil Asphalt B-C 4

5 I. Introduction of SK Energy Plant Capacity of SK Energy Refinery Process CDU MDU #1~5VDU CDU 7 (2) 8 (1) Capacity (MBPD) 1,115 (275) 329 (70) BRU(Benzene) 1 30 Reformer Units 4 (1) 5 (2) 137 (22) 121 (34) Hydrocracker 1 45 LBO 2 23 RHDS RFCC Petrochemical Plants Process Ethylene Unit Butadiene Ext raction Unit Butene-1 Sulfolane PX MTBE CHx PE PP Units (2) * ( ) : Incheon Refinery Capacity ( KMT/Yr) 860(C2=) 115(BD) 42(B-1) 3,020(BTX) (880) 958(PX/OX) 250(MTBE) 180(CHx) 396(PE) 366(PP) 5

6 II. Background of the No.2 FCC Project To Enhance SK s Competitiveness No.2 FCC Project SK s Lower Ratio of Up-grading Facilities Increased Premium Gasoline Demand Enhance Price Competitiveness Fulfill Environmental Regulations 6

7 III. General Description of the No.2 FCC Plant Process Scheme Unit : MB/D H2S SRP (620 T/ D ) Sulfur (510 T/D) Fuel Gas (2) AR Fuel Gas ( 0.3 ) C3/C4 (0.6) C3 ( 15.1 ) C4 (8.0) PRU (972 T/ D ) Propylene (11.8) Propane ( 3.2 ) Butamer (13) nc4 (13) H2 (80) HP (110 MSCFD ) No.2 RHDS ( 80 ) Naph (2.2) DSL (16.8 ) L/S B-C (60) B-C (3.6) No.2 RFCC ( 60 ) C4= (14.5) SHP (14.5) Gasoline ( 22 ) HCN ( 7.4 ) LCO ( 2.9 ) Alkylation Alkylate ( 18 ) ( 17.5 ) Sulfuric Acid SAR (180T/D) GDS ( 30 ) SLO ( 5.0 ) T-Gasoline ( 22 ) No.2 FCC plant consists of more than 10 process units and its supporting utility and offsite facilities. 7

8 III. General Description of the No.2 FCC Plant Utility & Offsite Facilities Area System Capacity Utilities Offsites Water Treatment System Cooling Water System Instrument & Plant Air System Nitrogen System Electrical Supply System (154 kv) Storage Tanks Raw Water Intake System Waste Water Treatment System Flare System 2,000 m3/h (Clarifier Base) 48,000 m3/h 37,000 Nm3/h (Dry Air Base) 5,000 ~ 20,000 Nm3/h (Contract) 160 MVA 1,500 MBbl (30 EA) 1,400 t/h (32 x 3.5 km) 7,000 t/d 1,000,000 kg/h Fire Fighting System & so on. Buildings Main Control Building, Admin. Building, Fire House, Maintenance Building, MCC/SW GR Rooms & so on. 8

9 IV. Initial Project Goals To enjoy big cracking margins before downturn, SK sets the schedule driven project goals while maintaining project qualities and not exceeding the budget. Description Project Goals Remarks Schedule 35 months from the start of FEED to commercial operation Unprecedented tight schedule Quality On-Stream Factor 0.95 (Note) No.1 FCC Project Record : 0.93 Cost Within the budget (US$ 2.0 Billion) Estimated TIC during Feasibility Study was US$ 2.3bil. Safety No Serious injury No-Death No-Serious Injury requiring hospitalization more than 3 months (Note) On-stream Factor = Actual treated quantities for 90 days after initial start-up divided by design capacity 9

10 V. Project Execution Strategies To establish the project execution strategies, SK evaluated and identified SQC risks through SWOT analysis of project environments. Project Environments Project Risks A lot of project experience - Know-how - Internal technical support - Trouble history A lot of operation experience Good cracking margin Leveled-up LECs capability Enhanced local manufacturers capability Manufacturers good will for SK S W O T O Limited space - Lay-down area - Construction space Limited engineers W World-wide project rushes Heavy workload of eng g company and manufacturers High price and long delivery Unstable construction workers union Schedule - Limited engineering companies resources - Longer procurement cycles - Construction workers union Cost - Seller s market - Increasing trend of equipment & material cost - Labor cost increase Quality - Lack of qualified engineers due to heavy workload - Manufacturers poor workmanship - Short construction period 10

11 V. Project Execution Strategies To overcome several project risks, SK established the following project execution strategies. Project Risks Required Actions Project Execution Strategies Schedule - Limited engineering companies resources - Longer procurement cycles - Construction workers union - Cost - - Seller s market - Increasing trend of equipment & material cost - Labor cost increase Quick decision making Minimize engineering periods Secure qualified engineers Secure manufacturing periods Early buying is buying chief Early selection of FEED and EPC contractors Incentive systems for schedule acceleration Strong owner management team with single responsibility Early selection of FEED and EPC contractors for parallel execution Early procurement of equipment and materials Promote teamwork among all partners Quality - Lack of qualified Engineers due to heavy workload - Manufacturers poor workmanship - Short construction period Quality Management tools Engineering quality check Enhance manufacturers workmanship Maintain design consistency Reinforced Quality Management driven by SK 11

12 VI. Work Breakdown Structures Considering project scale, fast-track schedule and limited engineering resources of contractors, SK divided the process area into four sections. [Work Breakdown Structures] Process Section FEED Detailed Engineering Critical Procurement Non-Critical Construction RHDS, HPU FEC LEC-1 FEC LEC-1 LEC-1 RFCC, GDS, PRU FEC LEC-2 FEC LEC-2 LEC-2 Sulfur, Alkylation FEC LEC-3 FEC LEC-3 LEC-3 Utilities & Offsites LEC-4 LEC-4 - LEC-4 LEC-4 FEC : Front-end Engineering Contractor, Shaw Group. LEC-1 : Local Engineering Contractor-1, Daelim Industrial Co, Ltd. LEC-2 & 4 : SK Engineering & Construction LEC-3 : Hyundai Engineering & Construction 12

13 VI. Work Breakdown Structures Contracting scheme SK Energy Process Design Licensed Units RFCC/PRU : UOP RHDS : CLG HP : HTAS Alkylation : Dupont SAR : MECS GDS : Axens SRU : CB&I WGS : Belco Butamer/ SHP : UOP Non-licensed Units ARU /SWTU : Shaw Utility & Offsite:SKEC Basic Design By FEC Project Spec & Procedure Basic Engineering Procurement Service for Critical Equipment LEC-1 Daelim RHDS HP LEC-2 SKEC RFCC PRU/GDS EPC LEC-3 Hyundai Sulfur Alkylation LEC-4 SKEC Utilities Offsites Detailed Engineering Procurement Assistance for owner supplied items Procurement Services except owner supplied items Construction & Construction Management Pre-commissioning Commissioning Assistance 13

14 VII. Implementation of Project Execution Strategies Strong Owner-Centered Project Management Team Project Champion Project Director Start-up Director Tech. Support Team (Existing) PT-1 PT-2 PT-3 PCT PET ST-1 ST-2 ST-3 MT LEC-1 LEC-3 LEC-2 LEC-4 FEC PT : Project Team, PCT : Project Control Team ST : Start-up Team, MT : Maintenance Team PET : Process Engineering Team Well aligned organization with WBS Single responsibility for EPC and Start-up Quick decision No PMC (Project Management & Consulting) Group 14

15 VII. Implementation of Project Execution Strategies Early Selection of FEED Contractor and EPC Contractors To achieve fast track project goal, SK selected FEED contractor and EPC contractors at the beginning stage of project for parallel execution. FEED Contractor Selection EPC Contractor Selection Heavy workload of engineering industry Selection at the beginning stage of main process licensor design FEED work with piecemeal licensor Information Incentive plan for P&ID & Equipment datasheets Multiple contractors in view of project scale EPC contractor selection at the beginning stage of FEED work Co-work and parallel work with FEED contractor Priority on procurement work E : Lump-sum, Procurement : Cost + Fee Construction : Unit Price Basis Enable to purchase equipment & material in time for long lead equipment Minimize design period 15

16 VII. Implementation of Project Execution Strategies Early Procurement of Equipment and Material Due to tight market situation, in-time delivery of critical equipments was the key success factor for achieving project goals. Market Situation Seller s Market (2005 ~ 2007) - Price goes up as time goes - Delivery lead time getting longer - Difficult to get quotation - Difficult to secure shop space - Early buying is buying cheap Procurement Approach Early identification of long lead critical equipment using No.1 FCC project data at the project planning stage Securing shop space for RHDS reactors - LOI issue before licensor design Asia s Leading - Procurement Energy Company cost finalizing after design freezing Early input of licensor datasheets issue schedule - Negotiation meeting with licensor - Kick-off meeting for licensor design RFQ issue using licensor datasheets - P/O spec finalization during TBE - Incentive program for FEED contractor 16

17 VII. Implementation of Project Execution Strategies Teamwork among all partners Good teamwork was essential for successful completion of the project. There were eight licensors, one FEED, four EPC contractors and hundreds of suppliers. Active communication was effective to get their good will and willingly support. Shared Project Goals Project goals Project Execution Plan & Strategy Team Building workshops among FEC & LECs Asia s Leading Energy Company Support to Contractors Dispatch LEC engineers to support FEED work Introduce Incentive program for FEED work and construction schedule acceleration Top Management Support & etc. Top management Impact visit to key suppliers Invite local suppliers to construction site and entertainment 17

18 VII. Implementation of Project Execution Strategies Reinforced Quality Management driven by SK SK organized owner QA/QC team and prepared/implemented Quality Management Plan (QMP) to ensure one-through Start-up. Why concerns? QMP Resources & Tools Licensor Design & FEED Quality - Lack of man-power - Level of completeness Detailed Design - Capability - Parallel execution & hurry-up Equipment & Material - Heavy workload - Lack of quality mind Control Area Licensor Requirement Optimum Design Reliability Job spec Code & Regulation Purpose Guarantee condition Performance & cost effectiveness Operability & Maintainability Requirement by law or regulation Resources - SK maintenance people - 3 rd party - Process design & FEED review - Resident inspector at shop & field Tools - Licensor contract - Inspection & Test plan - Lessons learned from operation and maintenance Construction - CPU - Tight schedule Workmanship Defect-free workmanship 18

19 VII. Implementation of Project Execution Strategies [Overall Quality Management Map (Sample)] Licensor Requirement Optimum Design Reliability /Operability Maintainability JOB Spec. / Code / Regulation Workmanship Licensor Requirement Plant Performance Reliability / Operability Maintainability Implement Code & SK Spec. Prevent Errors/Mistakes Licensor Requirement - Plot plan/pfd/p&id - Key Equipment Data Sheet - Operation Manual Review Optimum Design - H&M Balance - Sizing Equipment & C/V - Process Hydraulic - Flare system - Review Interconnecting Piping System Verify Optimum Sizing -3 rd Party - Sizing Main Equipment - Thermal Rating - Hydraulic Implement Operation Experience - Reliability Study - Metallurgy(MSD) - Trouble History Review Design - Plot Plan - P&ID, - Equipment Data Sheet - ESD Scheme - Operation Manual Operability of Inter-Uints Implement Basic Design Criteria Update SK Spec. HAZOP STUDY (1 st & 2 nd ) Update Feed/Product Handling - Feed Supply System - Product Handling - Implement S/U & S/D Procedure - Off-Spec. Handling - Flare System Utility Balance & Review System Consumption & Audit Review Consistency Check By LEC Reliability Study Tools Licensor Agreement Design Data of Other Unit Design Data of Other Unit Experience of Operation/Maintenance Lessons Learned Item Trouble History SK STD Spec. Code Requirement Trouble History 19

20 VII. Implementation of Project Execution Strategies [Overall Project Master Schedule] Plan Actual Description Remarks Process Design ~ Basic Design ~ Detailed Design ~ Procurement (Critical Equipment) ~ Procurement (All Other Equipment) ~ Site Preparation ~ Construction ~ Pre-com & Comm ~ Commercial Operation ~ 20

21 VIII. Performance of the No.2 FCC Project SK achieved project goals in every aspect. Initial Goals vs. Achievement Description Plan Actual Remarks Schedule 35 Months 31 Months from the Start of FEED to Commercial Operation Quality On Stream Factor (*) Cost 2.0 Billion US$ 1.95 Billion US$ Safety No Serious Injury No Serious Injury (*) On Stream Factor : Actual treated quantities for 90 days after initial start-up divided by design capacity 21

22 VIII. Performance of the No.2 FCC Project It took 72 days from M/C to get on-specification production, which reduced 18 days compared to existing No.1 FCC project. - Mechanical Completion : Mar.31, 08 - On-Spec. Production of Hydrogen Unit : May 8, 08 - On-Spec. Production of RHDS Unit : May 31, 08 - On-Spec. Production of RFCC/GDS Units : June.11, 08 - On-Spec. Production of Alkylation Unit : June.12, 08 Asia s Leading Energy Company SK achieved each design capacity for main units on June.25, 08. SK achieved process performance for each unit as designed. 22

23 VIII. Performance of the No.2 FCC Project SK achieved all process performances as designed satisfying products specifications as shown below : Unit Performance Indicator Project Specification Actual Operation RHDS Capacity, BPSD 80,000 Max. 86,000 T-AR Total Sulfur, wt% Max. 0.5 < 0.5 T-AR MCR, wt% Max. 6.0 < 4.8 C5+ Product Yield, vol. % Min. 98 > 98 RFCC Capacity, BPSD 60,000 Max. 73,000 LCN RON Min. 91 > 91 Propylene Purity, vol.% Min > Propylene Yield, vol. % ~18 (Note) GDS Capacity, BPSD 30,000 Max. 36,000 T-LCN Total Sulfur, wtppm Max. 10 4~8 Alkylation Capacity, BPSD 18,000 Max. 20,000 Alkylate RON Min. 95 > 95 Note : However the unit was originally designed to make high propylene yield of 19.6 vol.%, the actual propylene yield has been set in the range of 14~18 vol.% flexibly to meet market situation adjusting reactor temperature and reformulating RFCC catalysts since initial start-up. 23

24 VIII. Performance of the No.2 FCC Project The plant has been running without shut-down since the initial start-up operation on June.12, 08. SK tried to find the maximum capacity of No.2 FCC plant using equipment design margins and optimizing operating conditions. As a result, we found that the plant could be operating with the following capacity without any equipment revamp: Asia s Leading Energy Company - RHDS Unit : Max. 86,000 BPSD (Design Capacity : 80,000 BPSD) - RFCC Unit : Max. 73,000 BPSD (Design Capacity : 60,000 BPSD) 24

25 IX. Key Success Factors 1 Strong Project Management 2 Early Engagement of FEC and LECs 3 Early Procurement of Critical Equipments 4 Teamwork with SK, FEC and LECs 5 Enhanced Quality Management System 6 Accurate and In-time Decision 25 54

26 X. Pictures of the No.2 FCC Plant Before Construction (Apr. 2006) 26

27 X. Pictures of the No.2 FCC Plant After Mechanical Completion (Mar. 2008) 27

28 Thanks a lot! 28