1. LESS CRISIS, MORE PROJECTS:
TRENDS IN SHUTDOWN & TURNAROUND
MANAGEMENT

2. Editorial
AS THE CRISIS ABATES PROJECTS RETURN:
PROGRESS IN DOWNTIMES
Ageing plants and equipment as well as increasing competition from the Far
East and the growing investment pressure has led to radical structural changes
in the turnaround market and in the planning and execution of industrial plant
shutdowns. The current edition of Insight Report discusses approaches to
change management and optimisation and highlights the different viewpoints
of plant operators and suppliers.
Changed market conditions, the relocation of down times without increasing the risk too
refineries and petrochemical plants overseas much? What other means are available to in-
and not least the economic crisis have caused crease efficiency and ensure economic viability
operators to look for ways to optimise the plan- under these changing conditions? In fact, there
ning and execution of plant shutdowns and are several approaches to enhancing efficiency
investment projects. The chief aim is to reduce and optimising the cost of a turnaround even
the length of shutdowns and turnarounds and to with little effort. A change in perspective or the
increase plant uptime. However, because of the consistent implementation of simple measures
high volume of projects, TAR scheduling has can result in considerable improvements.
become more complex. This added complexity Based on best practices and interviews, flexible
ultimately increases the potential risk. A further planning, changes in scope through greater
factor is the anticipated rise in investment vol- project integration and possible solutions will be
umes following the crisis due to the large back- contemplated in this Insight Report from the
log of projects that built up in recent years. In viewpoint of both plant operators and contrac-
this light, is it feasible to further reduce shut- tors.
CONTENTS
Project integration from the perspective of contractors: interview with Dieter Greuter, BIS Chemserv .... 3
Greater flexibility despite increasing complexity? ............................................................................... 5
Good practices in project integration ................................................................................................ 6
Is the upswing on its way or already here? ....................................................................................... 8
Challenges from the operators’ point of view ..................................................................................... 9

3. Project integration from the perspective of contractors
Project integration from the perspective of con-
tractors
Dieter Greuter is responsible for the execution of turnaround projects at BIS
Chemserv in Linz, Austria. In this interview he talks about the ideal way to
plan and execute a turnaround with project integration and future market de-
velopments from the perspective of contractors.
What advantages and disadvantages do you see The reality is different because turnarounds are
in the integration of investment projects in a expensive and the main priority is to keep plant
turnaround? downtime as short as possible.
The advantage is certainly that it makes sense What are typical investment projects during a
to integrate projects during a plant turnaround shutdown?
because then the right structures are already in
In general, they involve plant expansions and
place. In other words, personnel are on site, the
optimisation but also replacing equipment, such
plant has been shut down, there's an order
as columns or heat exchangers as well as the
approval system that I can integrate to make
necessary piping. In the case of actual plant
full use of the many resulting synergies. The
components, the asset does not have to already
disadvantage is that shutdowns are relatively
be shutdown as the component can be built in
short and the projects are always critical. That
parallel. All that then has to be done during a
can lead to problems if one tries to force
shutdown is to incorporate the installation into
through such a project by all means.
the existing plant.
What would be the ideal way to execute such a
How much of a turnaround is spent on mainte-
project?
nance work and how much on projects nowa-
The ideal case would be that the project deter- days? Has anything changed in this regard over
mined the schedule and the shutdown was ar- the last years?
ranged accordingly. Usually, however, the shut-
Projects have been on the up over the last
down is planned first and attempts are then
while. By that I mean over the last ten years or
made to integrate the project. Frequently, pro-
so. In the case of newer plants, such as Total
ject integration only happens when the shut-
Raffinerie Mitteldeutschland which was built in
down plan is already set. But a long-term capital
1997, it's still not really a big issue. But overall,
project should always be the priority and the
plants are getting older and the need to replace
shutdown oriented around the project. That
sections of piping or machinery is growing. This
would be a novel approach for once.
development will definitely continue.
Is this plan realistic or is the real picture quite
different?
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T.A. Cook Consultants Insight Report 03 – 07/2011 Trends in Shutdown and Turnaround Management

4. Project integration from the perspective of contractors
Do you see a trend towards more investment What developments do you see here over the
projects now since the crisis has been over- next five to ten years?
come?
The major concern will be how long plants in
Not yet, really. I think that at the moment eve- Central Europe can hold on because relocating
rything is happening too fast. We are on a sharp to the Far East or Middle East is an issue. This
upwards curve but usually the curve goes right will particularly affect plants that are already
back down afterwards. With regard to new in- older and which raise the question whether it's
vestments, natural growth has not yet estab- worth investing heavily in the plants or to give
lished itself post crisis. Noticeable is that there them up. I believe that the investment volume
is enough work again and that there's a lot of in Central Europe will decrease because plants
catching up to do. But whether it continues like will be decommissioned. Investments and pro-
this and when the backlog will be cleared, can- jects will move east.
not yet be said. We have not seen an increase
in investment projects up until now.
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T.A. Cook Consultants Insight Report 03 – 07/2011 Trends in Shutdown and Turnaround Management

5. Flexibility and complexity
Greater flexibility despite rising complexity?
Turnaround scheduling always needs to be flexible so that unexpected events
can be dealt with promptly. How can this flexibility be safeguarded in the face
of rising planning complexity due to the integration of an increasing number of
projects?
Turnaround planners often get caught in the schedules are planned for all activities divided
complexity trap. The combination of longer into levels of differing complexity and with dif-
production cycles, increasing cost pressures and ferent timelines. These are then compiled into a
the considerable investment that is required in rough and transparent management plan. To
the relatively old plants across Europe is result- ensure that a schedule is actually applicable
ing in more and more complex scheduling and requires a matured and consistently applied
project planning for upcoming turnarounds. The reporting system. Such a system defines the
main issues here are: is more
planning necessary in order to fit
and coordinate all jobs in the
plan or is it better to develop a
rough plan that maintains a
certain amount of flexibility?
Does it still make sense to have
a TAR team or is it better in view
of the high volume of investment
projects to give the responsibility
for turnaround planning over to
a project team?
exact start and end point of a task but the rest
of the process remains dynamic. If there are
There are many approaches nowadays to make
weaknesses in the reporting system, errors will
a turnaround more economical and faster. As
quickly occur in the schedule plan, rendering it
well as innovative substitutes for common test-
useless. At this point consistency is an absolute
ing methods, online order approval systems
must. Whether maintenance or an investment
have proven particularly valuable. These sys-
project is to be the main priority when conceiv-
tems help improve the transparency of a TAR
ing a turnaround has to be decided on a case by
and to prevent errors – well-founded, thorough
case basis and should depend on which task has
schedule and project planning is still only realis-
the larger planning requirements. The planning
able by an experienced planning team, howev-
team then has to decide which processes re-
er. Obviously, pending investment projects
quire one hundred percent control of all jobs
should be incorporated into the schedule too.
and tasks and where a flexible concept with
One option to reduce complexity is to develop a
greater freedom to make decisions at all levels
schedule plan with different levels. Detailed
is more appropriate.
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T.A. Cook Consultants Insight Report 03 – 07/2011 Trends in Shutdown and Turnaround Management

6. Good Practices
Good practices in project integration
Different tasks require different approaches and planning. But why reinvent
the wheel? What has been tried and tested in one place can be applied in oth-
er companies too.
Usually pending projects are integrated into the ered in order to optimise the whole process of
turnaround schedule. Due to increases in pro- the turnaround.
ject volumes, the notion of integrating the turn-
around into the project plan is currently being
considered. Total Raffinerie Mitteldeutschland,
for example, has declared the planning and
control of projects to be a central management
role. In the past, maintenance comprised two
thirds of all activities conducted during a shut-
down at Total, one third was dedicated to capi-
tal investments. It made sense for plant opera- In other cases, the operation cycle is length-
tors to plan both sets of jobs together. It was ened where possible so that plant installations
also practical during implementation – the pro- that used to have different inspection schedules
ject manager for maintenance and the project can now be tested in one turnaround. Fewer
manager for investment projects now work shutdowns, and the reduction of the time re-
together in one office, so short distances and quired for the phased shut down and start up of
direct communication are easily guaranteed. the plant shortens the total downtime within a
test cycle.
For the joint management of both large turna-
BASF in Ludwigshafen is in the process of reor-
rounds and investment projects general contrac-
ganising its TAR competences globally. The
tors are still employed are independent of con-
global organisation of turnarounds across loca-
tractors who conduct routine maintenance work.
tions allows best practices to be determined
This ensures that maintenance will not suffer
internally, which in turn leads to a reduction in
under the growing project scope.In order to
the complexity of maintenance and investment
reduce the overall scope, Wacker Chemie at
projects thanks to the standardisation of sched-
Burghausen no longer inspects all apparatus at
uling and scope planning. The company has also
one and the same time. In cooperation with
released the operative manager for mainte-
TÜV, the company is investigating how often
nance from day-to-day business so that he can
each asset needs to be shut down and tested.
manage all of the tasks executed during a turn-
In some cases, a reduction of the operation
around. This gets rid of the double workload
cycle of certain equipment is even being consid-
which was susceptible to errors.
Research & Studies
6
T.A. Cook Consultants Insight Report 03 – 07/2011 Trends in Shutdown and Turnaround Management

7. Market Study Western Europe
Technical services for Turnarounds in petro-
chemical Plants
Study facts
The Western European refining and petrochemical industry is un-
173 plants
der pressure from competition in emerging regions, making costs
461 Technical service providers
and effi ciency critical to their ongoing operations. Turnarounds as 143 Interviews
a major cost can be a source of crucial competitive advantage. 25 Experts questioned with a delphi
TAR-management and en efficient shutdown conduction aiming to survey
shorten downtimes is therefore crucial for plant operators. 101 Illustrations
23 Tables
The success of these project depends mainly on the management
an the competences of external technical service providers. But technical service providers have to
deal with shorter downtimes, lower budgets, longer TAR-cycles and the need to conduct more and
more investment projects.
This study aims to help you understand the European TAR-market, providing authoritative infor-
mation on:
legal frameworks
business and organisational mo-
dels
services and trade specialties for
turnarounds
future trends
strategies for the TAR business
This study is therefore an useful source of
information for improving acquisition flexibil-
ity as well as identifying international part-
ners and new business opportunities.
For more information visit:
www.tacook.com
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T.A. Cook Consultants Insight Report 03 – 07/2011 Trends in Shutdown and Turnaround Management

8. Development after the crisis
Is the upturn on its way or already here?
"We have survived the crisis." This sentiment can be heard everywhere but
what changes can really be felt? Is investment on the up?
"A tsunami of projects is on the way." This investment as a lot of money has to be invested
statement from one plant operator makes it into decommissioning a plant and specialist
clear that huge investment is expected in plants waste disposal for the old plant and machinery.
up to 2016, triggered by the catch-up effect Newer plants in the European region do not yet
following the crisis. This may sound at first that have to deal with such issues. According to Axel
the strain on German and European markets will Koberstein, Unit Manager of Technical Projects
ease but is soon relativized by the fact that at Total Raffinerie Mitteldeutschland, a refinery
most planned investments target Asia, the Far built in 1997: "We didn't have a crisis." There is
and Middle East. Investment plans are afoot in no backlog of investment projects at this plant,
and there has not yet been any need to consid-
er investing heavily into the replacement of
larger plant components. "We have the ad-
vantage that our plant and equipment is pretty
modern and we can fully meet the quality
standards demanded by the market in terms of
the environment, sulphur etc. The investments
that we are currently undertaking revolve
around energy improvements, energy effective-
ness and measures for the production of niche
products," says Koberstein.
Overall it seems that investments are being
Germany too but their scope is hardly compara-
planned by plant operators. Contractors and
ble with the intentions in Asia. On account of
service companies, however, have not yet seen
the age of many European plants, their profita-
any indication of a growing order volume. If and
bility will be questioned in the future with re-
when the planned projects will actually be im-
gard to the amount of investment required.
plemented and whether the German and Euro-
That said, in Europe the construction of a new
pean markets will experience an upturn remains
plant is not considered to be the only type of
to be seen.
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T.A. Cook Consultants Insight Report 03 – 07/2011 Trends in Shutdown and Turnaround Management

9. Projektintegration aus Betreibersicht
Challenges from the perspective of operators
How do plant operators feel about the integration of investment projects in a
turnaround? What advantages and disadvantages can they expect?
Plant operators differentiate between invest- that, a different contractor strategy is required
ment projects to expand capacity and reliability- especially when integrating large projects into
centred projects, the objective of the latter turnarounds as few contractors can execute
being to increase plant availability. However, both large turnarounds and extensive invest-
when it comes to integrating these projects in a ment projects. Plant operators recommend that
turnaround they see no difference: Because the large projects are allocated to various contrac-
highest priority for all plant operators is that the tors on account of the differing requirements
production continues with as few interruptions and priorities even if this increases the organisa-
as possible, projects of all kinds are preferably tional burden. The integration of maintenance
integrated in a turnaround in order to prevent work and projects in work packages poses par-
considerable losses. One of the main causes for ticular difficulties for all work processes of a
these losses are the long start up and shut turnaround, necessitating more personnel in
down times which, for example, in the case of organisation, logistics and infrastructure and
lengthening the dura-
tion of the whole turn-
around. Projects that
can be executed dur-
ing normal operations
are generally not inte-
grated in a turna-
round. This is seldom,
however, as most
projects are connected
to a production pro-
cess at a specific point
and thus affect it.
synthesis gas facilities and steam crackers, can Assuming that no financial pressures to imple-
take up more than a third of the entire shut- ment immediately exist, one option is to con-
down time as well as the loss of product that duct projects as far as possible outside of the
has to be removed from the plant and disposed turnaround and then integrate them with the
of. process during the next scheduled shutdown.
However, in addition to these financial ad-
vantages, there are several, critical disad- Depending on the project, the cost of the in-
vantages of project integration: plant operators vestment relative to the whole turnaround can
face particular challenges due to the increased vary considerably. For example, scheduled ca-
complexity of the turnaround. In addition to pacity expansions, such as the erection of new
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T.A. Cook Consultants Insight Report 03 – 07/2011 Trends in Shutdown and Turnaround Management

10. columns or turbines, are so cost-intensive that As the core engineering for all projects even
the expense of the project surpasses that of the those overseas is conducted from Germany,
rest of the turnaround. companies have to strengthen their key re-
The crisis does seem to be abating for plant sources at home either internally or through
operators too and investment volumes are be- third-party engineering firms. Following the
ginning to rise again. The catch-up effect result- reduction of the workforce during the crisis,
ing from the backlog of projects that were post- considerable investment is required in personnel
poned over the last years creates new challeng- recruitment and the use of external competenc-
es for plant operators: es.
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T.A. Cook Consultants Insight Report 03 – 07/2011 Trends in Shutdown and Turnaround Management

11. Research & Studies
T.A. Cook Research & Studies
Beside the Insight Report T.A. Cook Research & Studies offers studies in the area of Asset
Performance Management.
Current studies:
Technical Services for Turnarounds in Petrochemical
Plants in Germany, Austria & Switzerland
(540 pages, 4400€)
How companies use RFID in maintenance
(190 Pages, 1500€)
Offshore Wind Farm Operations &
Maintenance (177 Pages, 2900€)
Technical services for Turnarounds
in petrochemical plants Western Europe (5900€)
TAR Scheduling | Scheduling Practices for Turnarounds
(1700€)
Exclusive studies and surveys as the basis for your decisions
Clients with specific questions related to topical issues or competitors may be best served by a single-client study.
With these studies, T.A. Cook Research & Studies offers you the opportunity to specify content and scope tailored
to meet your company's particular needs. Our team will be glad to put together a non-binding quotation for you
based on a pre-defined scope.
T.A. Cook Research & Studies
Leipziger Platz 2 | 10117 Berlin |
Phone +49 (0)30 88 43 07-0 | Fax +49 (0)30 88 43 07-30
E-Mail: studies@tacook.com
The Research & Studies division conducts detailed market and company analyses in the area of Asset
Performance Management. The focus of the team is to systematically investigate and clarify current mar-
ket concerns and requirements as well as anticipated developments and their consequences for market
players. As well as studies on topical issues, we compile trend reports and continually expand our data-
base of specialised knowledge, which can be applied to each study as needed.
11
T.A. Cook Consultants Insight Report 03 – 07/2011 Trends in Shutdown and Turnaround Management

12. Author: Nina Wolfs
Research Consultant at T.A. Cook Nina Wolfs is responsible for the
compilation of market studies and analyses in the area of asset
performance. She previously worked for different market research
companies and has conducted various studies.
Contact
E-Mail: n.wolfs@tacook.com
Tel.: +49 (0)30 88 43 07-0
Interview:
Greuter, Dieter. BIS Chemserv. Interview on 27.01.2011
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T.A. Cook Consultants | Leipziger Platz 2 | 10117 Berlin | Phone (030) 88 43 07-0 | Mail: service@tacook.com
T.A. Cook is a management consulting firm focusing on Asset Performance Management with offices in Berlin, Birmingham, Houston,
Paris, Raleigh and Rio de Janeiro.
The core competence of the consulting business is the sustainable implementation of asset, operations and service-oriented excellence.
As a change management specialist, the firm delivers measurable value enhancement and bottom-line productivity gains. In order to
achieve these results T.A. Cook offers a wide range of professional services which ensure that all business processes - from strategy
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Complementing the consulting business, the T.A. Cook Academy has become a leading organizer of international
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