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Recent Turnarounds – Lessons Learned

Presentation to the Operations & Maintenance Forum of HBR

May 10th, 2006

Chris Eskind, Engr Excellence Manager

Shell Deer Park Chemicals

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2006 Turnaround ExperiencesShell USGC Refineries – Chem Plant

Three Major Turnarounds during Q1- 2006

– Port Arthur Refinery

– Convent Refinery (La)

– Deer Park Chemical Plant

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Contractor Labor Availability, Recruitment, and Retention

– Difficulty in achieving targeted labor levels resulting in extended T/A durations

• Started T/A’s with less than optimum staffing levels (as much as 40% below targeted level)

– Retention of labor once the T/A began was a challenge. Absenteeism was high especially during the weekends

– Experienced labor turnover during the on-boarding/orientation processes due to active recruitment (by others) and lack of pay during this process.

– HASAP and background screening deterred some crafts from going through the hiring process

2006 Turnaround ExperiencesShell USGC Refineries – Chem Plant

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Contractor Labor Availability, Recruitment, and Retention

(Continued)

– Contractors were not able to deliver required resources… traditional recruiting tactics did not deliver

– Most craft availability issues were experienced by the large mechanical contractors

– Utilized increased wages, completion bonuses, and per diem to retain crafts with mixed results.

– Craft shortages primarily included Pipefitters, Welders, and Boiler Makers.

2006 Turnaround ExperiencesShell USGC Refineries – Chem Plant

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Safety Performance

– Mixed safety performance results… but overall fairly good.

– TRIR ranged between 0.0 to 0.5

– Experienced a number of near misses and quality issues

– Safety programs were adjusted to account for labor experience and quality concerns

– Experienced some craft conduct issues (fights, etc)

2006 Turnaround ExperiencesShell USGC Refineries – Chem Plant

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Quality of Work

– Overall quality of craftsmanship was average to poor

– Supervisor capabilities were average to poor

– Inexperienced labor contributed to numerous QA/QC issues primarily with flanged joints

– Percentage of welding rework was higher than historical experience

Illustrative Example:

Workers were sent to remove a relief valve from a flare header. When the job was inspected 30 minutes later it was discovered that they had begun disassembling the RV to remove it rather than unbolting the flange.

2006 Turnaround ExperiencesShell USGC Refineries – Chem Plant

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Productivity

– Productivity impacts were reported as as low as 50% of historically planned averages

– Productivity of smaller contractors was generally better

– Adjusted craft/foreman ratios to address productivity as well as quality issues

2006 Turnaround ExperiencesShell USGC Refineries – Chem Plant

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Availability of Materials

– High alloy metal was expensive and very difficult to obtain even with long programmed lead times

Availability of Equipment

– Availability of heavy equipment was reported as being adequate

2006 Turnaround ExperiencesShell USGC Refineries – Chem Plant

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What was done differently to prepare for recent T/A’s?

– Additional contingency was budgeted in anticipation of escalating labor rates

– Contracts were spread over multiple contractors to minimize overall exposure to low craft availability

– Relied on owner/contractor intelligence to understand market conditions with respect to labor availability

– Adjusted safety and QA / QC programs to account for anticipated craft experience levels.

2006 Turnaround ExperiencesShell USGC Refineries – Chem Plant

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What will be done differently for future T/A’s?

– Longterm T/A contracting and procurement strategies will be evaluated in response to dynamic labor situation

– Longterm owner/contractor partnerships will be evaluated

– Fit for purpose QA/QC programs will be developed to address anticipated craft experience levels

– Supervisor/craft and journeyman/helper ratios will be revisited

2006 Turnaround ExperiencesShell USGC Refineries – Chem Plant