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Asset Verification & Spare Parts Optimization Project At RasGas Company Limited (RasGas)

Authors: Anton Moore, Material Specialist, ExxonMobil Corp

H. Siahaan, CMRP, Reliability Engineer, RasGas Company Limited Albert Sijm, CMRP, Head of Reliability Engineering, RasGas Company Limited

Synopsis

Lack of spare parts can have both a significant impact on maintenance execution as well as plant availability. Low Preventative Plant Maintenance (PPM) compliance, excessive stock outs, material obsolesce, wasted time searching for parts availability or parts information and higher than required inventory are just some examples of the impact a poor spare parts management system can have on day to day operations. Similarly, incomplete or inaccurate Asset data inside the Computerised Maintenance Management System (CMMS) leads to ineffective allocation of resources resulting in wasted time and effort by many personnel across the whole organization.

In 2007 RasGas started its journey to review and improve its spare parts management system. This paper explains how the Asset Verification and Spare Parts Project was driven from concept to implementation in one of the world’s largest Liquefied Natural Gas (LNG) producing companies. The paper also highlights the major stages and challenges faced during the execution of the project including steps taken to ensure sound materials management practices in the future.

The paper will comprise the following key factors:

1. Why the project was developed and needed 2. Explanation of the key project elements 3. Challenges that arose during the project 4. Results in each of the project elements 5. Project summary and critical success factors

1.0 Introduction to Qatar

Qatar is a peninsula located in the Arabian Gulf, approximately 11,500 square kilometres in size. It shares its southern border with Saudi Arabia and United Arab Emirates. Bahrain and Iran are among other countries located within 150km of Qatar’s international boarder. In 1971 exploration engineers discovered natural gas off the north-east coast of Qatar. The importance of the discovery was not immediately apparent. Since then however, the North Field has been confirmed as the largest non-associated natural gas field in the world with recoverable reserves of more than 900 trillion standard cubic feet, or approximately 10 per cent of the world’s known gas reserves.

To exploit this remarkable field, Ras Laffan Liquefied Natural Gas Company Limited (RasGas Company Ltd) was established in 1993 to produce LNG in Qatar. Over the insuring years, the Company has developed world class facilities for the extraction, storage, processing and export of LNG.

2.0 RasGas Business Profile

RasGas is a joint venture between Qatar Petroleum and ExxonMobil. Key customers are located in South Korea, India, Italy, Spain, Belgium, Taiwan and the USA. At present seven LNG trains produce a total of 37 million tonnes of LNG per annum. Although most of the Company’s operation is concerned with the production of LNG, other natural resource projects including Helium and sulphur maximise the use of the liquids extracted from the North Field. Natural gas is also transported by pipeline and sold to National utilities within Qatar.

RasGas extracts its natural gas from 93 offshore wells. This is transported to shore via pipelines, treated and then liquefied before transportation to markets. RasGas has shipping facilities in Qatar. The LNG leaves Ras Laffan port on board Q-Flex or Q-Max LNG tankers, currently the largest LNG carriers in the world, with capacities of up to 266,000 cubic metres.

Onshore, the Company currently operates 7 LNG trains and two sales gas trains which supply gas to local industries.

As well as building onshore and offshore facilities in Qatar, Qatar Petroleum and its partners are investing in regasification terminals in customer home countries around the world. Several facilities have been constructed in recent years in UK (South Hook, Wales), USA (Golden Pass Gulf of Mexico) and Italy (Adriatic LNG Terminal).

With the most recent expansion project completed and commissioned, RasGas has over 260,000 equipments in CMMS (from a small sensor to a 125 megawatt (MW) gas turbine) and more than 100,000 Material Master Records.

Together with its sister company Qatar Gas, Qatar is currently the leading world exporter of LNG with total production of 77 million tonnes year annum. From a standing start, RasGas has become one of the world’s leading producers of LNG. 3.0 Why this project was needed

RasGas’ mission statement is to develop, produce and sell hydrocarbons in a safe and environmentally responsible manner for the welfare of the State of Qatar and the satisfaction of our customers while maximising shareholder value. The Company is committed to long term product reliability. One of RasGas’ Strategic Choices is to: “Enhance reliability and gas deliverability from reservoir to delivery point”.

To achieve this, obtaining the highest plant reliability is a must. A reliable operation is a safe operation. Most companies holding MRO inventory agonize at one time or

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another over the issue of spares parts; From Maintenance and Operations: do we have enough stock to keep the plant running at required levels; From Finance and Senior Management: have we too much capital invested in inventory levels. RasGas is no different. Implementation of a spare parts strategy and support for adequate stocking levels across the entire organization is paramount.

Spare parts have a significant function in supporting a safe and efficient operation. Availability increases maintenance efficiency and can reduce Mean Time to Repair. The shortage or non availability of critical spare parts will have a direct impact on the plants’ availability and safety. Holding surplus or obsolete spares on the other hand ties up capital that could be used elsewhere. RasGas Spare Parts motto is: “The Right Spares available at the right time”.

Some potential problems that were identified at the time were: Whether all assets were recorded in RasGas

CMMS. Whether Inventory levels in the warehouse were

adequate to keep the LNG plant running at the uptime required. A high level of work orders were open pending materials availability.

RasGas Bill of Materials (BOM) concept was based on vendor Recommended Spare Parts List (RSPL) for 2 years, rather Complete Spare Parts Lists (CSPL).

The BOM structure across the different plants (Trains) was inconsistently applied. For example the exploded BOM for identical pumps in Train 1 and Train 5 was often times different.

There was no standard method used to determine correct stock levels and replenishment. Stock level adjustments were manually calculated and uploaded. Typically individual stocking levels for SKU’s were only reviewed when field personnel requested a change.

The total lead time (Internal and External) for routine and non routine materials to arrive was excessive in many cases.

An external audit commissioned in 2007 confirmed most of the concerns identified above. The audit results were used to identify weak areas and to scope the project and identify the project strategy. A baseline was set and the “Asset

Verification and Spare Parts optimization Project” was initiated. With two of the seven LNG trains operating for more than 10 years, the time had come to initiate this important project. 4.0 Project Overview

The project was divided into five phases:

1. Field Asset Verification. This comprised a “walk down” of every plant asset using Plant Layout drawings and Process & Instrumentation Drawings (P&ID’s). The deliverable was an updated and verified list of all plant assets accurately recorded in CMMS following a consistent Functional Location hierarchy structure.

2. BOM Review and Standardization. A comprehensive review and update of all BOMs. Typical BOMs only included 2 years of operating spares and not complete parts lists. As some of the older Trains are more than 10 years old, these BOMs were often incomplete leading to much time searching drawings and vendor documents looking for correct part details.

3. Material Master Cleansing and clean up. This element included applying standard nomenclature across all 100,000 Material Masters and adding missing information vital for purchase of the spare. This phase also included “de-duplicating” existing MM catalogue.

4. Stock Level Optimization. Updated MRP stock parameters with Max, ROP and Safety Stock levels identified.

5. Development of a comprehensive Spare Parts Philosophy document approved and implemented across all affected RasGas departments: e.g. Manufacturing, Engineering, Maintenance, Projects, Supply and Purchasing.

Some of the key project metrics were as follows:

260,000 existing Tags (Equipments) in SAP 100,000 existing Material Masters (SKU’s) 70,000 Material Masters with stock on hand 17,000 existing BOMs

Figure 1 RasGas Asset Verification and Spare Optimization project overview

1 Field Asset (Equipment) Verification2. Bill of Material Review3. SAP material Master Data clean up 4. Review of Stock Levels5. RasGas Sparing Philosophy Document

Project Estimated 2-3 yrs duration- -

1 Field Asset (Equipment) Verification2. Bill of Material Review3. SAP material Master Data clean up 4. Review of Stock Levels5. RasGas Sparing Philosophy Document

Project Estimated 2-3 Years Duration

- Outsource to specialized Company

Reliability Target

Equipment Strategies

Integrated Spare Parts Document

Updated CMMS Equipment Master

Increased Plant Reliability

Updated Bill of Materials

Updated Stock Parameters

The Vision:Right Spares available at the right time

Inputs Desired Outcome

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5.0 Project Preparation

In 2007 a project charter was developed and approved by Senior Management across the effected departments – Engineering, Maintenance & Supply (Procurement). This was essential as CMMS optimization and determination of correct stock levels contain different areas of expertise and stakeholders have different interests. For example in RasGas, CMMS data (Functional Location, Equipment data details, Equipment strategy information) is controlled by Maintenance Department. MRP settings and the upkeep of the Material Master catalogue is controlled by the Supply Department.

Integration and alignment of new facilities with existing facilities was an extra challenge for the project team. A lot of effort, team building and soft skills were required to align interests across all the affected departments within the Company.

RasGas also faces the same internal pressures as most organizations holding large MRO inventory. The maintenance department typically wants all spares immediately available and in stock. Finance and Supply Departments like to run with a lean inventory with a minimum of spares in stock. To find the right balance Reliability Engineering, a part of Operations Department, was assigned to take the lead.

The Charter documented the objectives of the project, boundaries, team members, roles and responsibilities, project plan and schedule.

One of the unknowns was how many new equipments would be found in the plant that needed to be configured in SAP. To determine the exact scope of the project, a qualified consultant was invited to audit RasGas CMMS system, work management, procurement processes and perform a field audit.

Based on the audit it became easier to define the exact work scope. Nonetheless there were still several variables. A decision was made to tender with a fixed scope of work and include an additional ad-hoc portion based on price per equipment to cover the additional scope that was not completely identified. In this way there was also an incentive created for the Contractor to do an excellent and thorough job.

Some of the general concerns were confirmed and quantified in the audit. These included: Physical asset verification identified inconsistencies

between plant and SAP. BOM structure was inconsistent. Parent

equipments were not always clearly defined. Inconsistent process for creating new Functional

Locations, equipment & BOMs, resulting in different hierarchies across the plant.

Inconsistencies in existing material items nomenclature.

Duplicate materials. Delays in current procurement process. Existing MRP (Inventory Management & Control)

process was not fully functional. Current spare parts rotatable process was

unstructured and not tightly monitored. High number of open work orders awaiting

materials; and

Many open Material Reservations against closed work orders.

The preferred contracting strategy was to award the contract to one company who could deliver all the objectives across all the phases. Vendors were encouraged to form alliances or partnerships where one element of the project may not have been inside the services they were experienced or sufficiently competent with. Due to the project nature, selective companies were invited to tender.

The Contractor was selected on the following criteria: A company (or partnership) that could provide the

total solution; A proven history of safety excellence as majority of

the site work involved work inside a “live” LNG plant;

Previous experience in Asset verification and Spare Parts optimization projects;

Oil & Gas experience; A Quality Control / Quality Assurance system that

met RasGas standards; Current workload and ability to complete the

project in the time frame requested; The quality and experience of the key personnel

actually involved in the day to day execution of the project; and

The quality of management executives that would oversee the Project.

During the tender process it appeared that only a few companies would be able to meet all of the strict RasGas requirements for this project.

6.0 Field Asset Verification

The objective of this phase of the project was to ensure that physical assets in the plant were captured in CMMS, the data inside CMMS was complete and accurate and the Functional Location hierarchy was consistently applied across all plants.

6.1 Asset Verification activities

This phase was the most challenging and resource intensive. Continuously a team of 20+ Contractor personnel was working daily in the plant. Added to this, RasGas provided a team of multi skilled technicians across all disciplines (5) and a plant operator. The contribution of this team to the project in terms of getting relevant Permits to Work (PTW), finding the maintenance personnel, assistance in preparing mandatory Job Safety Analysis (JSA), assistance in getting the required documents and leading the QA/QC effort was a key to the fluent progress and success of this phase of the project.

This was a lesson learned from similar projects. During the preparation phase, RasGas visited several other companies. The lack of good communication and an efficient interface between Contractor and the end user delayed or contributed to unsuccessful outcomes in other similar projects in the past.

The methodology followed for the field asset verification was as follows: P&ID’s were used as a baseline. Field equipment

name plate data was recorded and then compared

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with Functional Locations and Equipment Master Data recorded in SAP.

The data collected from name plate included Tag Number, Original Equipment Manufacturer (OEM), OEM Model number, Serial Number, physical location, height from ground, scaffolding requirements for potential future maintenance and various other information contained on the data plates (e.g. material composition and sizes for valves).

Management of Change (MOC) documents that relate to design modifications, plant drawings or P&ID’s, were captured at the physical verification stage to ensure these were updated and included in SAP data.

6.2 Asset Verification Result

Approximately 90,000 new equipments were identified for inclusion into CMMS. This represents an increase of 25% compared to the baseline. The chart in figure 2 shows the breakdown of the total equipment tags at the completion

of Phase 2 of the project. These new equipments consist predominantly of manual valves, transmitters, temperature elements, switches and gauges however the list also included some pumps, motors and relief valves. All were maintainable equipments that were not maintained or managed previously in CMMS. It is probably also safe to assume that no spares or replacement parts were kept in stock for these assets.

On top of the new tags which were identified as not in SAP, there was also a small percentage of tags (1%) that could not be located and 2% which could not be verified for various reasons (access restraints due to height or location, shut down required etc).

At the completion of this phase of the project, a uniform and consistent CMMS data base was updated for all Functional Locations. This was a big improvement over the existing structure which had evolved over 10 years of operations and the subsequent new project interfaces.

Figure 2: Field Asset Verification results 6.3 Asset Verification Challenges

Many of the challenges faced during the course of the project could be attributed to the Asset Verification phase. The main challenges were:

Many equipment tags in the plant had missing name plate or name plates that could not be read due to corrosion damage or for other reasons. This was especially true in the old plants such as Train 1 and 2. As part of the project scope, the Contractor was required to record these equipments with reference to P&ID. The Contractor was also required to record the equipment tag that did not have its RasGas tag plate, so that RasGas could fabricate new tag plates. The total number of equipment tags that had missing or corroded name plates, names plates that were painted over or that were inaccessible was approximately 70,000.

Accessing equipments that were elevated and not accessible from ground level was a challenging activity. For selected equipments, scaffolding was erected in order to access the name plate details.

The rate of scaffolding erected was not as originally anticipated. This however was a reality that had to be acknowledged as there were obviously more important and critical plant maintenance scaffolding requirements that had priority. On an average, scaffolding was erected for 5 or fewer locations each week. To overcome this, a Scaffolding team was set up under the Maintenance Department. Erecting scaffolding is also a very costly exercise especially when its use was for a very short period of time (5-10 min). To keep costs to an absolute minimum for this activity, it is recommended to investigate alternative means of accessing the name plate details with either mobile scaffolding or by using binoculars or other “plant friendly” magnifying devices. For this project, scaffolding was erected in approximately 2,000 different locations.

Hot weather in the Middle East is a challenge as summer temperatures can reach over 50 degC. During summer, plant asset verification started at 04:00am and finished at 09:00am. After this time,

Field Asset Verification Results

72%

2%

1%

25%

Tags Available in CMMS

Unable to verify

Unable to locate

New Tags Identified

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the Contractor Engineers would return to the office to record their results into the master database. The focus for equipments in the summer months was on equipment in shaded areas. In winter months, the focus shifted to outdoor equipment in open areas, such as the Tank Farm, Jetties and the Port.

To verify equipment in critical packages like compressors and turbines, the complete unit needed to be shutdown. It was not justified or sensible to shutdown major equipment just for verification purposes. RasGas informed the Contractor at an early stage about the shutdown schedule so planned unit or plant shutdowns could be utilized to the maximum possible extent. Specialized Shutdown training required for personnel involved in the verification of these equipments was organized beforehand. Nonetheless there was still some equipment that could not be verified because the shutdown schedule fell outside the project schedule. This activity will continue after the project concludes by RasGas personnel.

RasGas Document Management System (RGDMS) is very effective and available online to everyone who has a RasGas login ID. Electronic copies of documents can be found through different combinations of search methods. Linking of documents to their respective Functional Locations or Equipment can be improved and search time reduced.

Several equipments identified in the plant were not listed in the P&ID. The explanation could possibly be that the existing Management of Change process (MOC) may not be as robust as it needs to be. There were on the other hand, functional locations which could not be located at site but were configured in SAP. These tags would have most likely been created from project documents.

Most offshore wellhead platforms are unmanned. To visit these wellhead platforms, special boat or helicopter arrangements are required. Wellhead platform asset verification needed to be aligned with wellhead planned maintenance work so Contractor personnel could avail themselves of the opportunity to visit the required location. Restriction in offshore bed spaces availability also affected the number of Contractor personnel that could be offshore at one time to conduct the field verification.

7.0 BOM Review and Standardization

The objective of this phase of the project was to ensure that the existing BOMs in SAP were accurate and complete. Any spare part not included in the existing BOM or in the material catalogue was added.

7.1 BOM Optimization activities

This activity was performed offsite at the Contractor’s home office. A team of about 30 engineers were engaged in reviewing a total of almost 17,000 unique BOMS. The BOM Optimization phase consisted of the following activities:

Completeness of the existing BOMs in CMMS was reviewed and compared to sectional drawings in the equipment manuals. Further it was also ensured that identical equipment had identical BOMs. The initial RasGas BOM concept was based on vendor RSPL for 2 years, rather complete BOMs (CSPLs).

Existing BOM structures were reviewed. All existing Material masters were confirmed as belonging to the BOM.

Extra attention in the review stage was paid to materials which were de-linked from the existing BOM.

For BOMs with incomplete or missing data, the Contractor used RasGas RGDMS system, interviewed plant people and finally contacted the Original Equipment manufacturer (OEM), Original Construction Manufacturer (OCM) or supplier.

Some items identified in the RasGas Sparing Philosophy Document do not require a complete BOM and only require a replacement component.

Identification of part commonality between OCM and OEM part number.

7.2 BOM Optimization results

At the moment of writing this paper, this phase is 90% complete. The difficulty remains with equipments where sectional drawings or required parts breakdown documentation have not been located.

Based on a Pareto analysis it appeared that the vast majority of this missing documentation relates to about 50 OEM’s. Much effort continues to contact these OEM’s and obtain the necessary documentation. The dedicated RasGas Technicians assigned to the project are also being used to try and locate these documents internally. A and B critical equipments are being targeted first with this endeavor. Another way to complete the BOM exercise and reduce the number of floating materials is to look to previous work orders and Purchase Order history. More than 30,000 equipment tags have yet to have the BOMs verified due to missing or incomplete documentation.

Some of the preliminary results for the BOM phase are that over 4,000 new unique BOMs have been created and over 55,000 new Material Masters identified for creation. Also, a standard and consistent BOM structure across all Plants is now in place. An identical pump installed in both Train 1 and Train 7 for example will now have the same BOM structure. This was not the case previously.

From a review perspective, much effort has been placed to make the BOMs of the highest quality possible. Extra resources were assigned to this task. For future projects of this nature it is recommended to take this into account at the start of the project and include provisions in the project budget.

7.3 BOM Review Challenges

Supporting document was not available in RGDMS for a significant amount of cases. For some packages, spares exist in the BOM without any document references. Without equipment drawings and spare part lists, it is almost impossible to complete the BOM review and standardization. The

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Contractor was required to source any missing or incomplete information directly from the Original Equipment Manufacturer however the success rate for obtaining the missing documentation from either the OEM or the vendor was disappointingly low.

To smooth the process in contacting vendors, RasGas provided the last PO number as a reference to contact OEM or OCM. Further, a Pareto analysis was performed to focus on the main OEM/OCM only. Many challenges were faced by the Contractor in pursuit of the required documents. Contacting the OEM in many cases was not the right answer as the OEM supplied the equipment to a package vendor or Construction manufacturer and therefore had no record of RasGas drawing numbers.

In many cases the PO text had insufficient details to correlate with any equipment.

On top of not always having all the supporting documents required, there were many cases where the available documentation was not complete. For example, if a complete model was not available in data sheets then only a base model was provided. Supporting documents didn’t always have the installed quantity noted. There were also many item description and part number mismatches.

About 25,000 or 30% of the existing Material Master records were “floating” in CMMS or in other words were not attached to any BOM. In all likelihood, the majority of these items will be attached to a BOM when the BOM review process is completed. The Material Masters which are not attached to any BOMs at the completion of this phase will be the first candidates to be reviewed for material obsolesce. It will however be difficult to completely rule these Materials as obsolete if the BOM exception list is not narrowed down significantly.

8.0 Material Cleansing

The objective of this phase of the project was to ensure there is a consistent taxonomy and nomenclature applied throughout the existing material catalogue. Material descriptions were to be improved and all duplicate material masters eliminated.

8.1 Material Cleansing activities

This phase was performed simultaneously with BOM Optimization with the predominate activity occurring offsite. Material cleansing began as soon as the materials were confirmed in the BOMs. A total of 82,000 materials were identified to be cleansed. The following activities were performed:

Material items were cleansed. Taxonomy was reviewed and where necessary standardized. Material descriptions and supplementary fields were reviewed.

Maintenance centric text was introduced in the material items, for example simplified description, drawing numbers and technical reference numbers were added.

A download was taken of RasGas Material Master Table and an analysis was run in the Contractor’s own software to identify potential duplicate SKU’s.

A review of material types was completed to ensure material masters are coded and assigned to the correct material type.

8.2 Material Cleansing results

A surprisingly low number of duplicate SKU’s were identified (approximately 250). This result would appear to confirm that the process for creation of new SKU’s is working well. There were however a high number of items that were either rearranged into a standard format or missing information was added. Many one time purchasing items (ND items) had missing purchasing information.

8.3 Material Cleansing challenges:

Parallel updating of material master data by Supply Department required the Contractor to revisit the completed material items before final submittal. This activity could have been avoided if an Asset Management system was used with direct linkage to SAP rather than MS Access.

Contractor’s data spreadsheet contained some characters, such as the question mark symbol ‘?’, that are non compatible with RasGas CMMS. The RasGas Supply Department Material Specialist needed to verify and correct the data before uploading into CMMS.

Mismatch between different data sources, for example: Information available in OCM detail and PO text manufacturer details were different. Mismatch between PO text and item header information for Manufacturer, Part number or Equipment model number.

9.0 Stock Level Optimization

The objective of this phase of the project is to have “The Right Spares available at the right time” to meet the plant’s operating and business objectives. Deliverables of this phase of the project are to determine Maximum, Minimum (Reorder Level) and Safety Stock Level for all catalogues material items.

Before any activity was commenced to determine the required stock levels, a key question needed to be asked; Does the material item required to be carried in Stock in the first place? The following factors were considered by RasGas in determining the answer to this question.

Ensure a thorough check of existing Material Master catalogue to ensure the required item is not a duplication or interchangeable with another part.

Check if consignment stock is an option. Check vendor stocking options. What is the reliability and speed of delivery in relation

to the requirement need? (i.e. can the item be supplied with confidence by a local vendor within the time frame required by Operations?

Check if the item to be replaced can be repaired and returned to service in a suitable timeframe.

Is substitution or duplication a possibility?

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Can the item be made on site or locally produced? Is the item available as part of a stocked assembly? Are failure modes known? Are these failure modes

predictable? Is Inventory sharing a possibility?

All materials in RasGas are assigned material criticality. This was based initially entirely on the type of commodity.

To arrive at a final material criticality (which considers both the initial material classification and the equipment criticality), the matrix in Figure 3 was developed. This final material criticality is the value which will be used for calculating stocking levels. Material criticality is just one of the inputs to determine required service factor/level.

A EC EC HC MC

B EC HC HC MC

C HC HC MC LC

D MC MC LC LC

A B C D

Extreme Critical High Critical Medium Critical Low CriticalColor 

Legend

Existing Eq

uipment Criticality

Existing Material Classification

Figure 3: RasGas Criticality matrix

Generally, for materials to be in the most critical category, three elements must exist:

1. Risk. The failure scenario must fall within a consequence I or II of the RasGas risk matrix.

2. Mitigation. The spare part is required to mitigate the scenario.

3. Availability. The spare part is not routine. This means that the material is not readily available “off the shelf” from a local supplier.

Materials which have the highest criticality rating must be reviewed and stewarded closely. KPI’s should track the management performance of these parts highlighting any specific issues (e.g. stock outs).

Other parameters that were taken into account to determine minimum stock levels were: Cost of the item Mean Time Between Repair (MTBR) Potential production loss associated with

equipment failure Supplier delivery time (Existing Company data) Required service factor/level Potential environmental and safety impacts Number of like equipments in the plants (Installed

Base) Reparability Previous consumption history Company’s Equipment Maintenance Strategy Company’s Sparing Philosophy Parts commonality Shelf life

9.1 Minimum Stock level Activities

Software was used to evaluate stock requirement for capital, critical and normal operating spares inventory.

Contractor developed a list of Capital spares. Capital spares are repairable items generally used to replace parts of assets undergoing repair, refurbishment, maintenance or servicing. These spares are high cost, long lead time, low demand but critical to plant operations. Examples include gas turbine rotor, compressor bundle, transformers, circuit breakers etc.

Contractor provided a list for all relevant material items, with Maximum, Minimum (Reorder Level) and Safety Stock Level. Wherever consumption history was not available, MTBF approach was used.

The first two steps are relatively easy. Once all required information was obtained, the information was entered into the Contractor’s in-house software tool and recommendations were provided. The difficulty and challenge was with the analysis and evaluation of all this data. RasGas adopted the approach that only items where there was a significant difference between existing minimum levels and proposed new minimum levels (either positive or negative) for each SKU was reviewed.

A RasGas cross functional team was set up to review the Contractor’s recommendations. The team consisted of a Reliability Engineer, who facilitated the meetings, a SME, a Supply Department representative and a Maintenance Representative. The review lists were broken down

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by discipline to help with the review and to ensure the correct personnel were involved in the decision making process. The teams met as required to review the proposed stocking levels and come up with the final stock level recommendations.

9.2 Minimum Stock Level result

Currently at the time of writing this paper, RasGas has received the Contractor’s review for Helium and Trains 1 through 5. This accounts for approximately 60% of the SKU’s to be reviewed.

The initial perception prior to the project was that RasGas was under stocked in many different areas. However from the initial results received this may well prove to be not the case. Only 30% of the SKU’s have had any movement within the past four years. This means that there may well be a high potential for eliminating obsolete or dead stock. The review has identified as many as 30% of SKU’s should have increased minimum stock levels. As many as 40% of SKU’s on the other hand could have minimum stock levels reduced. These results will be reviewed by the cross functional teams over the next few months.

9.3 Minimum Stock Level challenges

Without doubt, the major challenge faced in this phase of the project was data quality. Many different variables influence the ultimate and final stock level figures. Obtaining key data or “suspect” critical data was both time consuming and received mix results. Lead times and price information were the two key fields that created most issues.

Parameters with insufficient or “erroneous” data in SAP were: Lead Times (Both internal and external) Price (typically no price or prices that were older

than five years) Consumption patterns. Incorrect Repairable data MTBF data Parts criticality

Another challenge was the resources required to review the recommendations proposed by the software. Engineers and technicians spend a significant amount of time on a weekly basis reviewing the results.

10.0 Spare Parts Philosophy

The spare parts philosophy document was developed to guide the decision making process of personnel across the entire RasGas organization involved in the management of spare parts. The purpose of this document is to:

1. Describe the need for carrying inventory, the criteria for what items should be held and not held in inventory and list the responsibilities of key personnel within the process.

2. Provide guidance on the quantity of stock to carry and the methodology on how to calculate it.

3. Ensure sound inventory management principles are followed to guarantee high service

level/inventory turnover rates, limited instances of stock outs and limited surplus or excess stock.

4. Establish fundamental benchmarking guidelines in order to make certain the right spare parts are physically available when they are required to guarantee safe operation, plant reliability and smooth maintenance practices.

Furthermore, the document defines the different types of inventory at RasGas and their subsequent treatment.

The objective of the Spare Parts philosophy document is to drive quality stocking policies, processes and execution to:

Prevent excessive purchase of materials Improve timeliness of availability of materials Ensure the right spares are available when

required Reduce the level of obsolescence and write offs To improved plant reliability and availability

through reduced downtime

11.0 Conclusion & Key Success Factors

If we look back on the three years of the Asset Verification and Spare Parts Optimization project, many lessons can be learned. Undoubtedly, the project has been a valuable experience for the people involved. This type of project is typically executed infrequently if at all during the lifetime of a facility.

Phase 1 of the project (Trains 1-5) is nearing completion and Phase 2 is on budget and on schedule to be completed by mid 2011. The project has achieved an excellent safety record without a single recordable injury or Lost Time Incident.

Some of the key metrics achieved as a result of the project were as follows: 150,000 on site hours injury and incident free 90,000 additional Equipments uploaded in

CMMS 55,000 additional MM’s created 4,000 Unique BOMs developed 50,000 MM’s had Stock levels changed (up and

down) 1,500,000 data points added or updated in

CMMS

The following are some of the key success factors that took the project from an idea through to field implementation:

Management support. It is vital to have a high-level sponsor who, throughout the project, emphasizes its importance to all relevant people. At RasGas, the sponsor’s belief and persistence helped the project surpass its difficult initial stages. The Sponsor was the Operations Manager, who reported directly to the Managing Director

Appropriate resources. A dedicated core staff and adequate facilities ensured consistent progress throughout the project. It is recommended to have succession plans in place

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as no doubt the project will loose some key people over a period of 3 years.

Committed Contractor. A Contractor that shares the same vision and expectations was undoubtedly one of the keys to success. The Contractor was only happy if RasGas was happy.

Integrating the Contractor into RasGas’ way of life. The Contractor became very self sufficient once appropriate access to key resources and business tools was obtained. This was identified in the early stages of the project.

Quality resources. This was a labour intensive project and the results were only as good as the effort (both internal and external) that was invested.

Phasing of project. This enabled small celebrations each time minor milestones were achieved and kept the team and stakeholders happy and enthusiastic all the way.

Contracting Strategy. RasGas adopted the approach of In-house management and outsourced execution. Using this strategy, RasGas experience was embedded into the

project and ensured the quality that was expected. Lessons learnt from previous Contractor experience was utilized to the full.

A close relationship with the Contractor was key. Re-work was kept to a minimum but when it was required, the costs were shared so there was a win-win situation for both the Contractor and RasGas. RasGas personnel were open to suggestions and ideas on project execution from the beginning.

Business controls. Business controls are essential for this type of project, which may be huge in size and spread over multiple years. Without a continuous focus on business controls, this project would not have come to a successful end.

Success seemed distant at the beginning of the project, but by pursuing excellence, it came within our reach. In spite of all the unexpected obstacles, the RasGas Asset Verification and Spares Optimization project is close to completion, achieving a remarkable result that will position RasGas in the future with the realization of its mission.

1

Business & Management; Track 1

Asset Verification & Spare Parts Optimization Project

By,

Anton Moore RasGas Company Limited

� Qatar & RasGas

� Project Overview

� Project Journey � Challenges � Solutions � Achievements

� Key Success Factors

Agenda

State of Qatar

� Peninsula of 11,500 km2

� Located in Persian Gulf

� Borders Saudi Arabia, Bahrain & UAE

� 3rd largest reserves of LNG in the World

� Leader in LNG Industry

Milwaukee

Doha

7100 Miles

The North Field

� Worlds Largest Natural Gas Field

� Covers 5,000 km2

� Gas reserves of 900 trillion standard cubic ft

� 93 Offshore wells

� Gas transported onshore via pipeline

RasGas Company Limited

� Facilities for Extraction, Storage, Processing & Export

� Fleet of Q-Flex & Q-Max LNG Tankers

� Key Customers in Korea, India, Italy, Spain, Belgium, Taiwan and USA

� Employees from 56+ Nationalities

Liquefied Natural Gas (LNG)

� Natural Gas becomes Liquid at –260˚ F

� LNG is odourless, non toxic, non corrosive liquid

� LNG occupies 1/600th the volume of Natural Gas

� LNG burns more cleanly than oil and coal

RasGas Plant, Ras Laffan, Qatar

� 7 LNG Trains � 2 Domestic Gas Trains � 1 Helium Plant

CMMS Profile

� 260,000 Equipment Tags

� 17,000 Unique BOM’s

� 100,000 Material Masters

� 70,000 MM’s with SOH

� SAP & Meridium EAM Systems

Integrated Asset Management Model

Reliability Leadership

Operator Care

Plan Asset Verification

CMMS Optimization

Equipment

Strategy

Spares

Optimization

Maintenance

Plan

Duty Standby

Plan

Spares

Preservation Plan

Execution

Reliability Optimization • Leading Indicators • Bad Actor Elimination

• RCFA

There were Concerns…

� Not all assets in CMMS

� BOMs not accurate or Consistent

� Inventory levels never seem right

� Too many stock outs

� Too many Open Work Orders waiting for Materials

� RQ to receipt takes too long

� No Integrated Spares Philosophy Document

Sound Familiar??

Project Description

1 Field Asset (Equipment) Verification

2. Bill of Material Review

3. SAP material Master Data clean up

4. Review of Stock Levels

5. RasGas Sparing Philosophy Document

Project Estimated 2-3 yrs duration

- Resource intensive

- Outsource to specialized Company

1 Field Asset (Equipment) Verification

2. Bill of Material Review

3. SAP material Master Data clean up

4. Review of Stock Levels

5. RasGas Sparing Philosophy Document

Project Estimated 2-3 yrs duration

- Resource intensive

- Outsource to specialized Company

Reliability Target

Equipment Strategies

Integrated Spare Parts Philosophy

Document

Updated SAP Equipment Master

Increased Plant

Reliability

Updated Bill of Materials

Updated Stock Parameters

(Minimum Stock)

The Vision: “Right Spares available at the right time”

Input Desired Outcome

Preparation

� Independent External Audit � Project Charter Developed � Charter Agreed & Signed by Cross-Departmental Senior Management � Development of Partnerships � Project Scope of Work developed

But there were Challenges…

� How much would this project cost? � Resources – Everyone already had a day job � CMMS/MM data not always available

1. Field Asset Verification Methodology

� Physically check all equipment in the plant

� Collect Name Plate details

� Also collect other useful Maintenance data

� P&IDs used as reference and starting point

� Results of Field work cross-checked with SAP

� Company Technicians assigned full-time

� Field Unit Operators used for unable to locate Equipments

Field Asset Verification Challenges

� Missing name Plates

� Corroded or damaged name plates

� Hot weather

� Some Equipments not accessible

� Some Equipments cannot be verified unless shutdown

� Equipments at height; required scaffolding

� Offshore Wellhead Platform schedule

� P&ID not always updated

Field Asset Verification Results

� 90,000 Additional Equipments Added � All Maintainable Equipment � Majority C&D Critical

� Low rate of Unable to locate Tags (0.8%)

� Some Duplicate Tags identified (1,200)

� Scaffolding erected for Approx 2,000 Tags

� 2% of Tags could not be verified

� Over 1,500,000 data points added or updated in CMMS

2. BOM Review & Standardization

� BOMs inconsistent across different trains

� Review BOM completeness, compare SAP and cross

sectional and other drawings

� CSPL vs. RSPL

� Identify Parts Commonality

BOM Review Challenges

� Most BOMs were 2yrs Operating spares and not

life cycle parts

� Not all Documents and drawings available

� Difficulties getting Equipment data from OEM

� Many MM’s “Floating” and not attached to BOM

� Supporting documents not always with installed Qtys

� Vendor master not updated for some OEMs

� Original purchase not always with OEM

BOM Review Results

� 4,000 Unique BOMs created

� 70% of existing BOMs updated

� 55,000 new Material Masters created

� Un-linked Materials identified for Obsolesce review

3. Data Clean Up in SAP

� Duplicate MM’s identified and removed

� Material Descriptions updated & standardized

� Short Text

� PO Text

� Maintenance Centric Text added

And the Challenges…

� Data constantly changing

� PO Text “rules” changed leading to rework

� PO Text with incomplete details

4. Stock Level Optimization

� Required to ensure Minimum Spares needed to

support critical plant equipment

� Contractor Software

� SAP & Non SAP data

� Consumption & MTBF based Analysis

� Results reviewed by SME's

� Across Departments: Engineering, Maintenance & Supply

� Criticality Matrix developed

Criticality Matrix

A EC EC HC MC

B EC HC HC MC

C HC HC MC LC

D MC MC LC LC

A B C D

Extreme Critical High Critical Medium Critical Low CriticalColor

Legend

Ex

isti

ng

Eq

uip

me

nt

Cri

tica

lity

Existing Material Classification

Stock Level Review Challenges

� Insufficient/Incorrect SAP data � Consumption Patterns � Lead Times � Prices � Repair Costs � MTBF Data � Parts Criticality

� Results require significant effort to analyse

� Engaging SME’s to take responsibility

� Cross Functional responsibility & “turf war”

� Funding for new items identified

Stock Level Optimization Results

For MM’s with Previous Consumption History

� 23% of MMs Increase to Minimum Stock level � 16% of MMs No Change � 61% of MMs Reduction in Minimum Stock level

For MM’s with No Previous Consumption

� 42% of MMs Increase to Minimum Stock level � 28% of MMs No Change � 29% of MMs Reduction in Minimum Stock level

Overall…

� 36% of MM’s Increase to Minimum Stock level

� 24% of MM’s No Change

� 40% of MM’s Reduction in Minimum Stock

Stock Level Optimization Results

� Roles & Responsibilities

� Use of OEM Vs Non OEM

� Material Definitions

� Inventory decision process

� Stock Optimization & MRP

� Specific material strategies

� Signed off by � Maintenance Management � Engineering Management � Purchasing Management � Warehouse Management

5. Spare Parts Philosophy Document

RasGas Company Limited

___________________________________

Spare Parts Philosophy

Document

August 2010

Rev 1.0

______________________

� 150,000 On Site Hours with No Safety Incident

� Project on Budget

� Project Creep… 25% extra work

� 90,000 additional equipments uploaded in CMMS

� 55,000 additional MM’s created

� 4,000 Unique BOMs developed

� Over 1,500,000 data points added/updated in CMMS

� 50,000 MM’s had Stock Levels changed

Summary

� Management Support & Commitment

� Resourcing; Internal & External

� Committed Contractor

� Integration of Contractor into RasGas Daily Life

� Internal Partnerships

� Shared Vision

� Contracting strategy

� …and lots of Persistence

Key Success Factors

� Purchase of Identified spares

� Removal/Disposal of obsolete Inventory

� Continue with cultural change

� Teamwork/Partnerships

� Shared responsibilities

� Communication with Asset Teams

� Imbed learning's into base business

� Identification of Inventory Optimization Tool

Next steps

29

© RasGas Company Limited 2010

www.rasgas.com

Thank You. Questions?