Our managing director, Richard Vann, recently spoke with The Chemical Engineer and explored what is involved in the dismantling of a chemical plant for re-erection at the other side of the world.
In case you missed the article, you can read it in full here…
A decommissioning project may represent the end of a chemical plant’s useful life for one operator, but there are occasions when assets can be carefully salvaged, dismantled and reinserted into the global supply chain.
As the world of chemical engineering advances apace, the market continues to pose both newfound pressures and opportunities for operators across the globe. Consequently, the number of decommissioning projects being planned on an international scale, is vast. Arguably, it could even be at an all-time high. However, the catalysts for this level of activity, are varied.
Some chemical plants, particularly those constructed in the 1960s and 70s, have simply reached the end of their design life – certainly in the Western Hemisphere. They therefore present too many inefficiencies – not to mention safety and reputational risks – to warrant ongoing operation.
Others have effectively reached their ‘sell-by-date’ as a result of evolving HSE/EHS legislation and compliance standards, so they must be decommissioned and ring-fenced if operators are to remain on the right side of the law.
Economics have a role to play too, but markets are extremely fragmented – it would be naïve to assume there is only one, single global trend. We only have to look at India for example, and the number of assets being transferred out to this emerging economy, to see that growth is ongoing here. There is often an additional driver to move production closer to the end-user to mitigate unit cost, time and impact on the environment.
This geographical variance is often the reason why some plants are dismantled for re-erection. Whilst a facility may have reached the end of its useful life for one chemical manufacturer, it may still have operational potential elsewhere. In some cases, a second-hand plant is used as a stop-gap measure by a client to get to market quickly, for example, whilst a more modern and efficient plant is being constructed.
The sequential dismantling of these inherently hazardous facilities is naturally very complex, with multifaceted variables affecting whether the project can be executed safely, without any environmental concerns, and with a commercially viable outcome. But the important thing to note, is that it is possible.
A 5,000-mile journey to Azerbaijan
RVA has completed more than 770 decommissioning projects over the past 27 years, across virtually every continent in the world. Whilst the driver for every assignment has varied on a case by case basis, less than 1% of these projects have seen clients’ sites cleared completely and assets carefully dismantled for re-erection at a remote location.
For a project with the State Oil Company of Azerbaijan Republic (SOCAR), however, it was RVA’s dismantling expertise that was sought, so that a plant could be carefully stripped down and reused at the other side of the world.
Appointed by European Petroleum Consultancy (EPC), who ran the overall contract, RVA provided project management, technical engineering and EHS advice for the six-month duration of the works.
The global energy leader wanted to relocate a mothballed polypropylene manufacturing facility from Quebec in Eastern Canada, to Azerbaijan. This demanding assignment required the decontamination, laser scanning, match-marking, physical separation, preservation, precise cataloguing and packing of the plant, so that it could be meticulously reassembled.
Maintaining the operational integrity of every component was of course critical, as failure to correctly administer this process, could have resulted in this highly valuable manufacturing resource becoming nothing more than scrap metal.
Devising the plan
Before any such project can begin on a chemical plant, an impartial, bespoke feasibility and option study should be drawn up.
Often beginning with exploratory management workshops that help to triangulate the sector- and plant-specific insight of the operator – as well as the specialist engineering experience of a decommissioning expert – these studies provide an objective, clear and realistic view as to the true liability or opportunity of the project.
EHS, commercial and financial factors associated with the site are all considered. This means assessing achievable costs, the quantity and location of residual materials, metallurgy and exotic material content, contamination levels, other potential hazards and risks, permit surrenders, the availability of drawings, the processes that were actioned when closing the plant, any waste management obligations, required resources, relevant legislation, and programming constraints.
It would be impossible to plan a project, in its entirety, without the findings of this initial data-driven exercise. For SOCAR’s dismantling assignment, the planning phase took several months.
The decontamination challenge
Before any decontamination works can begin, the condition of a chemical facility has to be rigorously audited. It is important to gather and interpret as much information as possible, about the type and level of hazardous material contaminations, as well as the cleanliness and structural integrity of the assets. This helps to ensure that appropriately-skilled personnel – equipped with the necessary PPE – can then be appointed to undertake the decontamination exercise, with minimum risk.
The objective should not be to over-clean materials so that they are completely contaminant-free. Instead, the goal is typically to take assets to a ‘known state’ that removes as many uncertainties as possible and satisfies the degree of cleanliness required for the given project.
If the asset is to be demolished for scrap, for instance, the priority would be to decontaminate the plant so that, as a minimum, it meets regulatory requirements and prevents hazardous materials such as chemical residue, from entering the recyclable waste chain.
With the SOCAR project, the environmental management plan had to further consider the decontamination regime additionally mandated for safe international shipment of the disassembled plant.
Once sufficiently cleaned, every individual component part of the plant was match-marked with unique codes for ease and accuracy of reconstruction. Some of the components were sent to specialist companies for refurbishment and certification.
A high-degree of manual dismantling techniques were then deployed to physically and precisely disassemble the assets over a six-month period. Every component was carefully packed with accompanying drawings to aid the reassembly works at the destined location of Baku. It was also important to preserve the integrity of the 1,000 tonnes of materials during shipment, so that the plant could make the 5,000-mile journey without damage.
With any decommissioning works involving the international transfer of plant – irrespective of geography or the specifics of the assignment – safety and environmental considerations are paramount from the outset.
Whilst most countries adhere to similar ethical and legislative benchmarks, there are naturally varying international and even regional nuances to the standards adopted. Works must therefore comply with the regulation, documentation and certification rules of the plant’s origination and destination locations.
The removal of hazardous materials including asbestos and other insulators, is regulated differently in Canada to the UK, for example. So, to ensure best practice and maximum peace of mind when undertaking any high-hazard project of this nature, legislative parameters are only ever considered as setting the very minimum criteria. This is because the objective of any responsible decommissioning professional should be to not only meet legislative compliance but to take EHS management to the highest achievable level..
Canada also represented a new geographical territory for RVA and time differences added to the exacting nature of the project. With RVA engineers visiting Quebec – coordinating expertise with a specialist team back in the UK – careful planning was essential to maintain effective dialogue throughout.
Finding a plant buyer
Whilst this SOCAR project proves that chemical manufacturing equipment can be carefully dismantled for re-erection elsewhere, such a route map is not always commercially feasible, especially if a prospective end user is not immediately apparent, and/or a third party is sought to buy the assets. The process is often easier to actualise if the facility is transferred to an operator within the same group.
When RVA was engaged to oversee the decontamination, demolition and dismantling of a manufacturing facility on an 11-hectare site on Jurong Island, Singapore, for example, selected plant items were carefully recovered so that they could be transferred to the owner’s sister plants worldwide.
This project was bound by tight timescales, given a commercial driver for the client to exit the site within defined lease and permit parameters. The work was therefore planned sequentially with designated demolition areas handed over in a carefully phased manner. Potential sources of ignition were subject to strict controls, due to the nature of the chemicals housed nearby and the presence of some units which had to remain operational during the initial stages of the programme.
Here, again, local standards were adopted as a regulatory compliance base for this project. However, global industry best practice was the non-negotiable benchmark for the demolition contractor’s EHS regimes and technical methodologies. Delivering this approach can represent challenges – not least due to cultural differences and language barriers – so effective personnel relations, awareness training and communication were therefore key.
If an external buyer is sought for a chemical asset, the completion of a mutually attractive deal is admittedly rare. The costs of refurbishing and relocating the plant – on top of fees associated with the baseline decommissioning works themselves – soon eat into any potential project margin. Delays incurred whilst trying to find a buyer and negotiate, will also contribute to excessive site security, maintenance, leasing, permit and other holding costs, which further erodes any revenue generation potential. The fact that many plants are considered ‘old technology’ also reduces the chances of negotiating a deal that is commercially attractive to all parties.
This is why it is crucial that the ‘sale for reuse’ avenue should carefully be considered and in most cases seen as a ‘plan B’, as it cannot be confidently relied upon as a guaranteed route for the facility.
The feasibility and options study outlined earlier is, essentially, a modelling exercise designed to explore all possible project scenarios and generate value-adding management information that means a chemical operator does not enter into a decommissioning exercise ‘blind’.
Often the eventual selected route may not have been considered or even deemed possible by the client, perhaps due to false perceptions of the associated financial burden. But the studies will provide sufficient data and confidence to pursue a specific strategy. Ideally, this exercise would begin before the plant has even closed, although obviously this is not always possible.
Whilst the potential route maps will vary from site to site, options include:
- The complete clearance of a chemical facility, which is often the most straightforward exercise. This is because, from a technical perspective, a full clearance usually only requires a global or battery limits isolation strategy. In simple terms, the plant is usually rendered ‘cold and dark’ so that, once residual hazards have been removed, all structures can then be demolished for scrap and the site taken back to flat slab, or, as the project examples outline above, assets can be dismantled for resale and re-erection.
- The selective removal of assets, perhaps to facilitate a retrofitting assignment that will enable a site’s footprint to be optimised. Whilst extremely complex in nature – especially if the wider facility remains operational throughout – retrofitting is possible. It must be acknowledged however, that the challenges are multiple and multifaceted. Options are often limited, and certainly more intricate, due to the presence of live common services, adjacent hazardous processes, neighbouring vehicular/pedestrian movements, more extensive stakeholder requirements and the shared nature of facilities. Even the isolation strategy is far more difficult. With potentially thousands of cables, pipes and services to consider, the impact of an under-planned localised isolation philosophy could be catastrophic. The ‘best case’ scenario may be business interruption, whilst in more extreme circumstances the likelihood of a serious safety, environmental or commercial reputation incident should not be underestimated. An experienced team with retrofitting expertise should therefore be sought for such schemes.
- The extensive mothballing of an entire facility, or specific assets, to ensure the optimal chance of preservation.
- A combination of the above, with nuances of project scheduling, timescales, activity sequencing and safety management of course apparent from facility to facility.
The goal – for any chemical facility – should always be to maximise the return on assets where possible and safe to do so. However, factors such as plant age, former processes, recovery cost, testing, market forces and commercial competition, will all form part of the decision as to what should happen next.