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Avoid the costly shutdown blues

Shutdowns can be a high-stakes game for oil producers and other Alberta manufacturers. Having production down longer than the approved and budgeted time frame will lead to increased costs, poor labour use and lost revenue.


July 6, 2010
by Robert Robertson

Testing oil at Cenovus Energy’s Foster Creek facility.

Photo: Cenovus Energy

Shutdowns can be a high-stakes game for oil producers and other Alberta manufacturers. Having production down longer than the approved and budgeted time frame will lead to increased costs, poor labour use and lost revenue. The good news is maintenance departments can improve turnaround performance.

FT Services turnaround manager Darren Truscott and his team in Fort McMurray, Alta. are focused on improving reliability and shutdown management performance. Key turnaround factors include planning, scheduling and budgeting, but he also advocates re-thinking shutdown contract strategies.

“I believe traditionally when scheduled shutdowns aren’t planned and scheduled well, there’s about an 80% chance the budget will be overshot by some variance,” says Truscott. “It takes discipline, channel and scope to kick it [turnaround] out into the maintenance world. The shutdown needs to be planned properly. As well, oil companies must embrace incentive-based contracting to improve turnaround performance.”

Calgary-based Cenovus Energy was formed late last year when Encana Corp. split into two highly focused and independent publicly traded energy companies: integrated oil and pure-play natural gas. With more than 3,000 staff, Cenovus operates a steam-assisted gravity drainage (SAGD) production facility at Christina Lake, which is located approximately 120 kilometres south of Fort McMurray.

Shane Tebb is CMT construction supervisor, Christina Lake Construction, for Cenovus Energy. Taking on the new construction job role in December 2009, Tebb had been more heavily involved in company shutdowns. And working 10 years on site at Christina Lake, Tebb knows what it takes to plan, budget and implement a successful turnaround.

Staying on schedule
“You can’t really allow anything to slip away. And if you don’t stick to the schedule, you’re going to get bit,” says Tebb. “Obviously, there are critical paths and some exceptions to the rule. The more you can stay with the schedule, however, the better you’re going to be.”

Tebb says a company shutdown was to be held over eight days in September last year. There were things that went well with this shutdown. For example, turnaround milestones were laid out in advance and the engineering department met them, but the shutdown was extended to 11 days and costs doubled.

“Maintenance managers need to know every second of the day what’s going on. Because it’s such a short duration and busy time, you have to know the shutdown like the back of your hand,” says Tebb. “Make sure you have the right people in the right place at the right time. Safe execution, regulatory compliance, restoring capacity and continuous improvement should be the main focus of any shutdown.”