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Decommissioning in the Middle East – market challenges and opportunities

Our Managing Director, Richard Vann recently spoke with the editor of
Tanks and Terminals to explore the challenges and opportunities associated with decommissioning in the Middle East .

If you missed the article, you can view it in full here:

As the oil and gas market advances in parts of the world such as the Middle East, all eyes are on what the future could hold for this developing sector. But to move forward safely, economically and with maximum respect for the environment, operators must also think carefully about how to proficiently manage their older assets.

Drawing on more than 30 years’ industrial experience, Richard Vann – managing director of RVA Group and past president of the Institute of Demolition Engineers – explores the challenges and opportunities associated with the clearance of tanks and terminals, and advises how to proficiently move forward with any decommissioning projects that arise…

On a global scale, oil and gas production has a rich and diverse history, and even on more local levels, the sector has evolved differently, from one country to the next.

The story in the Middle East, for instance, dates back to the turn of the 20th century, with oil reportedly first discovered in Iran in the early 1900s. Resource supply from countries such as Saudi Arabia began much later, with commercial quantities not unearthed until the late 1930s. But many would argue that the market became most interesting for this part of the world in the 1960s and 1970s, when the peaking of production in industrialised – and largely Western – countries, presented opportunities for Middle Eastern operators, particularly during the worldwide crises of 1973 and 1976.

There was a major investment in oil and gas during this era. But fast forward to 2020, and the consequence is that an unprecedented number of assets are now rapidly nearing the end of their natural design life, efficiency and environmental compliance. So, the question is how to clear tanks, terminals and other site infrastructures safely, cost-effectively and with minimal environmental impact.

The Middle East is not unique in demonstrating this trend of course, but many countries here now find themselves faced with a fairly notable challenge. Before the aforementioned upsurge in oil and gas activity, the landscape was largely undeveloped. There were no other heavy industries present, which means no industrial demolition history and consequently an absence of a supply chain proficient in this niche engineering discipline. This is therefore the start of a new decommissioning cycle, which has kickstarted a global hunt for expertise.

A global supply chain?

In many respects, despite the maturity of the demolition industry in countries such as the UK and USA – and consequently the level of specialist expertise which ought to be available – this worldwide search for a suitably skilled supply chain will not always be straightforward.

There are several capable contractors in the market. However, I have previously spoken at many international events about their unfortunate yet apparent reluctance to take on jobs outside their own borders, despite the opportunities this could present for the growth of their businesses. Assignments closer to home feel far more comfortable, for many.

This therefore narrows down the number of potential demolition teams able – or willing – to tender for work in Middle Eastern countries, among others.

Consultancy support and advice is undoubtedly even harder for asset owners to procure, as independent, strategic partners are rare. This has little to do with geography and is more a reflection of the makeup of the industry. Compare decommissioning to the world of building and construction, for example, where clients have a wealth of guidance at their fingertips, plus a variety of industry specialists to choose from when assembling their project team, and it is and always has been starkly different.

 

That is not to say, however, that it is impossible to form a proficient supply chain for Middle Eastern decommissioning projects.

Tank demolition

RVA Group has recently been appointed to help a Middle Eastern oil and gas company demolish a large floating roof storage tank.

The 106m diameter, 22m tall carbon steel fabrication – with a shell up to 50mm in thickness – has long been used to contain crude oil. But the tank was recently subject to an operational failure which resulted in a major fire, leaving it both structurally distressed and contaminated with residual hydrocarbons and other products of combustion.

This inherently high-hazard environment has therefore emphasised the need to plan for the adoption of cold-cutting demolition techniques only, to help ensure the strict control of sparks and any other possible sources of ignition generation. The continued monitoring of this potentially explosive atmosphere is also, perhaps unsurprisingly, paramount.

The project is of added complexity as all works are being carried out within a live crude oil stabilisation plant and long-distance pipeline pump station, with an operational ‘sister’ tank also lying adjacent.

Identified as a result of informal word of mouth recommendation, validated by initial remote research, RVA was then engaged by the client following several months of more detailed dialogue. The team’s first task was the development of a pre-tender safety plan to act as the backbone of all ensuing works. RVA has subsequently  been retained to provide specialist project management and HSE advice for the remainder of the project, and will assist the local contractor – an oil and gas engineering services supplier who has procured resources and equipment from the established global decommissioning sector – in the works execution. RVA has also supported the contractor in sourcing specialist UK personnel and equipment, for shipment to the Middle East.

At the time of writing, the team is three months into a six-month schedule.

Mounting demand from the Middle East

Having completed almost 800 decommissioning projects globally, RVA is no stranger to working on complex international assignments on virtually every continent worldwide. But enquiries from the Middle East are certainly at an all-time-high.

The team has recently worked with another organisation, for instance, to write a detailed specification of works to facilitate the tendering for the decommissioning and eventual demolition of a 1960s-built oil refinery in the region. Having supported the client with the devising of various corporate environmental, health and safety procedures, plus the procurement and management of a hazardous insulation materials survey specialist, before the next-step decommissioning activity can begin.

A stretched supply chain?

Sometimes, when a project team is formed of personnel from varying locations, a level of anxiety – or at least a degree of caution – exists surrounding the management of cultural differences. To a certain extent, this air of apprehension is understandable, as additional project considerations may of course present themselves. However, the thing for all parties to remember – because sometimes the appointed engineering teams also share such concerns – is that no two decommissioning assignments are ever the same, irrespective of their geography. To attempt to approach any works with uniform methodologies in mind, or rigid attitudes towards others for example, would not only be extremely foolish, but incredibly risky too – as far as decommissioning goes, there is no ‘one size fits all’.

Responsible partners in the supply chain on the other hand – RVA included – acknowledge the need to carefully and flexibly consider all project parameters on their own merit, so that a best-fit team, approach and schedule can be formulated on a case-by-case basis. As a result, such organisations and specialists are unlikely to be fazed by a demolition brief in the Middle East. Admittedly, it has the potential to create some additional criteria for consideration, but often a complex assignment in the consultant or contractor’s own country of origin generates unique challenges too.

Factors to consider

When assembling a multi-cultural project team, there are language barriers to navigate, as well as variances in everything from cultural beliefs to working hours and days. The time difference must be accommodated when planning dialogue between RVA’s personnel in the Middle East and resource at the UK HQ, for example, and with the weekend starting on Thursday evening and Sunday being a normal working day in this part of the world, further thought is required to ensure this does not ever cause any on-site disruption or delay. There is a need to adapt to and embrace local customs.

Some decommissioning teams less familiar with working abroad may even need to think carefully about the climate, as both hot and cold extremes can also influence on-site behaviour. The procuring client should ensure discussions take place around all of these factors, for utmost peace of mind that they will not cause any unexpected problems.

Legislation also varies significantly from country to country, which can set the tone regarding project expectations, unless carefully managed from the outset. A scrupulous decommissioning specialist will never knowingly put the wellbeing of an individual at risk, nor will they wish to jeopardise the commercial or environmental integrity of the project by taking an action which – in their eyes – could be seen to be cutting corners.

However, there should be one common law irrespective of culture, geography or the scope of works – respect. Respect for the client, colleagues, the environment, wider stakeholders and of course the engineering discipline itself, will help set the project barometer.

Establishing this respect naturally takes effort, but this is usually easier to attain with strong levels of communication, consultation and clarity. The corporate minimum standards for the project – however large or small – should be outlined and agreed from day one. Globally-respected European standards are often the starting point, but where higher levels of quality are known, they should always be the benchmark.

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Total Petrochemicals UK Ltd

The Polystryrene Plant of Total Petrochemicals UK stopped production in 2013. The site was to be demolished and a small team of employees were retained to oversee the project. After some initial training in demolition it became apparent that specialist assistance was required to help our staff but also in order to comply with legislation in terms of competence and CDM regulations.

After competitive tender, RVA were appointed to the role of CDM-C for the project.

RVA provided a very competent team of staff to see us through the hazards, they worked alongside our site knowledge with their demolition expertise. RVA ensured that the demolition contractor followed appropriate method statements and completed risk assessments.

I would recommend the use of RVA in the role of CDM-C.

 

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Working at height – a different angle

We recently had the opportunity to comment in leading publication Health and Safety Matters on the importance of maintaining a robust stance on work at height and in particular the dangers that exist when erecting, operating or maintaining plant and equipment. A topic at the forefront of every project.

“Work at Height Regulations are widely communicated within the construction and demolition environment, given the potential dangers that exist when operating on fragile roofs or near unfenced edges for example.

Over time the concept has become more comprehensively understood. Industry managers and employees are increasingly, albeit slowly, acknowledging that working at height covers every scenario, at or below ground level, where they could fall and become injured. Yet still it remains a root cause of many major injuries and fatalities, which shows further work is needed.

One area where work at height considerations have taken somewhat longer to come to the fore is the maintenance of plant and machinery, with cranes or 360° excavators being a perfect example. When operatives are rigging cranes or excavators, connecting hoses or conducting routine maintenance operations such as refuelling for instance, they often have to climb up onto the equipment, which can be a significant distance above ground, therefore putting themselves in danger. Even cab access or egress presents potential risks.

Generally speaking, machinery manufacturers have worked hard to design and implement more safety features on their equipment, including railings, non-slip walkways and rigging winches. The European Union Machinery Directive 2006/42/EC was influential here, stating that: “Parts of the machinery where persons are liable to move about or stand must be designed and constructed in such a way as to prevent persons slipping, tripping or falling on these parts.” Considering slips and trips were identified as the most common cause of major injuries to employees in a 2011/12 HSE report, it is important that equipment manufacturers are taking note of this EU guidance.

But perhaps the actions of manufacturers should go beyond simply legislative compliance, which in truth ensures only the minimum acceptable standards. Manufacturers are perfectly placed to further heighten site safety, but health and safety professionals within the industry need to apply pressure on them to do this. A zero tolerance approach to inadequately equipped plant and machinery would magnify the somewhat obligatory position that manufacturers find themselves in to further drive standards.

Ultimately, no-one would purchase a car without a seat belt, so contractors should not have to even contemplate an investment in equipment that does not have equivalent safety features. The cost to retrofit handrails for example is very minimal, but it mitigates a very large risk. The industry needs to be less accepting of manufacturers’ dismissal of their obligations.

The fact that many pieces of plant were built before the introduction of Work at Height Regulations (2005) also presents problems, as does the delayed implementation of these safety and risk management principles amongst other manufacturers. A significant retrofit requirement perhaps consequently exists. Some contractors can only afford to purchase such older plant, but they still require protection.

We have to move away from the opinion that enhanced safety mechanisms can be optional extras. All companies are understandably trying to work smarter following an extended period of economic difficulty and squeezed margins, but this cannot be to the detriment of safety.

Of course some projects present extraordinary and uncharted working conditions, and in such instances a collaborative approach between the equipment manufacturer, contractor and project consultant or manager will encourage the development of a bespoke solution.

It is important to note that the finger should not simply be pointed at crane and excavator manufacturers and users; their inclusion here is purely for illustrative purposes. In truth there is work to be done to improve the mindset throughout the entire trades industry. A scaffolding contractor may provide an incredibly helpful, compliant and safe product for a building firm to utilise, but that same contractor may neglect to recognise his own work at height risk when climbing up on to his trailer to actually remove the poles before erection. The fringes of any job must be considered in addition to the most obvious project risks.

The salient point is that the most effective accident prevention mechanism is education. The greater the awareness of varied work at height dangers, the more our mindset is switched on to identify, plan for and mitigate risk. We all have a moral duty to protect ourselves and others from accident and injury and we need to maintain momentum in this important field.”

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RVA Group experiences continental drift

RVA Group has cemented its position as an internationally-acclaimed engineering consultancy, having secured three prestigious new projects on three different continents.

In only the last six weeks the expertise of RVA’s specialist decommissioning team has been sought by clients in Canada, Singapore and the Netherlands. These new schemes of work – on top of ongoing projects in the UK and mainland Europe – mean the firm has a healthy forward order book and is continuing to expand its team.

RVA’s managing director Richard Vann explains: “The nature of our work is particularly complex and a somewhat unusual skill set is required to safely manage the inherently high-hazard projects that we oversee. Identifying the best people is therefore not an easy task as we are looking for such highly skilled professionals in their respective fields, be it chemical, structural, mechanical, or civil engineering, for instance. However there is a phenomenal amount of talent out there so now it is a case of handpicking the industry’s finest and gradually adding the RVA sector specifics to their already highly developed skill sets.”

With a resident project management role on the five month North American contract, RVA is set to supervise the meticulous dismantling of a complex petrochemical plant, for resale, relocation and reassembly in Eurasia. Elsewhere other RVA engineering experts are on two large chemical sites in Singapore and the Netherlands to support the client to manage the dismantling of redundant assets that are intertwined with operational plant and services.

Richard continues: “Projects of this nature are the very reason that RVA was established back in 1992, and international growth has long been part of our carefully planned expansion strategy. As our reputation has grown and our relationships with multinational blue-chip clients have developed, we have steadily secured more overseas work. These three new projects represent an exceptional achievement for the company and they are a testament to the capabilities and results of our team.”

This type of work is not for the fainthearted though. “We quickly have to acclimatise ourselves to varied local requirements to ensure legislative and environmental compliance,” Richard explains. “There can sometimes be language barriers and time zones present challenges too, when we need to communicate with colleagues on the other side of the world. Indeed with the current geographical spread, we can have colleagues separated by almost a whole day”.

But all of this simply represents a new dynamic for the business, concludes Richard. “We develop knowledge-based partnerships whether we’re working in the North East of the UK, or the Far East of the world. Our aim is to develop totally safe, environmentally sound and cost-effective regimes wherever we may be, and we will devise bespoke team structures and on-site methodologies to best tackle the challenges that any project poses.”

RVA’s work continues on nine UK projects nationwide.

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ConocoPhillips Petroleum Company

The feed back from our site personnel is that this has been an extremely successful project in both execution and the relationships built with all who came in to contact with the project team.

This outcome is a testament to the work, effort and commitment shown by all involved in the project.

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British Energy

 Nuclear Liabilities Review 2009

  Case Study - British Energy Nuclear Liabilities Review (42.0 KiB)

RVA Group has once again supported British Energy in its periodic reassessment of the assets and liabilities of its nuclear power plants, having been appointed to assess a range of structures within the ‘non-controlled’ areas of stations at Hartlepool, Heysham 1, Heysham 2 and Dungeness B.

The RVA team of five specialist consultants provided a range of knowledge and services including demolition engineering, estimating and work breakdown structure (WBS) compilation.

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