VALUE ENGINEERING Mohammed A. Us Shan Saleh H. Al-Mutairi Sagar M. Al-Anazi Samir A. Sulaiman Saleh...

VALUE VALUE ENGINEERINGENGINEERING

Mohammed A. Us ShanMohammed A. Us ShanSaleh H. Al-MutairiSaleh H. Al-MutairiSagar M. Al-AnaziSagar M. Al-AnaziSamir A. SulaimanSamir A. SulaimanSaleh S. Al-AbbasSaleh S. Al-Abbas

REFINERY FACILITYREFINERY FACILITY

VE is an intelligent option, when ?VE is an intelligent option, when ?

Existing part/product cost is highExisting part/product cost is high Existing technology is complex/old though Existing technology is complex/old though

simpler means are availablesimpler means are available There is a need to release a cheaper There is a need to release a cheaper

product by cutting down some of the product by cutting down some of the existing featureexisting feature

The existing customer demands a minimal The existing customer demands a minimal increment in product features that are in increment in product features that are in useuse

There is a need to cut down the There is a need to cut down the manufacturing cycle time/cost manufacturing cycle time/cost

BENEFITS OF VEBENEFITS OF VE

Decreasing costs Decreasing costs Increasing profits Increasing profits Improving quality Improving quality Expanding market share Expanding market share Saving time Saving time Solving problems Solving problems Using resources more effectively Using resources more effectively

INTRODUCTIONINTRODUCTION FAST DIAGRAMSFAST DIAGRAMS COST/WORTH MODELCOST/WORTH MODEL RECOMMENDATIONSRECOMMENDATIONS

LayoutLayoutProcessProcessMech/Elec/PipingMech/Elec/Piping

RESULTSRESULTS

OUTLINEOUTLINE

PROJECT OVERVIEWPROJECT OVERVIEW

In 1993 a value engineering study was In 1993 a value engineering study was performed at a refinery facility in California.performed at a refinery facility in California.

Three teams comprised of 15 professionals:Three teams comprised of 15 professionals: LayoutLayout ProcessProcess Electrical/Piping/MechanicalElectrical/Piping/Mechanical

On final implementation On final implementation 60% (approximately $ 35,000,000) in savings were 60% (approximately $ 35,000,000) in savings were

realized, representing an 11% reduction.realized, representing an 11% reduction.

Follow-on annual savings were $ 500,000/year.Follow-on annual savings were $ 500,000/year.

TEAMSTEAMS

Team1: Project LayoutTeam1: Project Layout

FAST diagram to understand the present designFAST diagram to understand the present design

4 out of 64 ideas 4 out of 64 ideas 12 design suggestions12 design suggestions

The principal proposals were to The principal proposals were to Consolidate the site to reduce interface cost and reduce the Consolidate the site to reduce interface cost and reduce the

size.size. Consolidate buildings to reflect required rather than desired Consolidate buildings to reflect required rather than desired

future requirements.future requirements. $ 8.5 million$ 8.5 million

Team2: ProcessTeam2: Process

FAST diagram to review the process flowFAST diagram to review the process flow

4 proposals and 5 design suggestions out of 44 ideas4 proposals and 5 design suggestions out of 44 ideas

$ 38 million life cycle present worth savings$ 38 million life cycle present worth savings An additional $ 1 million An additional $ 1 million

The principal proposals were to The principal proposals were to Combine or delete the excessively redundant type tanksCombine or delete the excessively redundant type tanks Use seawater for process coolingUse seawater for process cooling Reduce the number of seawater pumpsReduce the number of seawater pumps Eliminate pipeline scrapersEliminate pipeline scrapers

TEAMSTEAMS

Team3: Electrical/Piping/MechanicalTeam3: Electrical/Piping/Mechanical

FAST analysisFAST analysis

Focus on piping and electrical as well Focus on piping and electrical as well

5 out of 32 ideas, estimated savings of $ 7.6 million5 out of 32 ideas, estimated savings of $ 7.6 million 24 mechanical and electrical design suggestions, 24 mechanical and electrical design suggestions,

estimated at $ 2.2 millionestimated at $ 2.2 million

Among the principal proposals the most crucial were to Among the principal proposals the most crucial were to Install the main electrical distribution line aboveground.Install the main electrical distribution line aboveground. Eliminate the 15% over design for tanks.Eliminate the 15% over design for tanks.

TEAMSTEAMS

ShipProducts

LoadShip

AvoidDemurrage

StoreProducts

TransportProduct

TransportProduct # 1



StoreProduct # 2

StoreOff-Test

StoreProduct # 1

StoreProduct # 3

ManufactureProducts

TransportFeedstock

ShipProducts

ReceiveFeedstock

How? >>> <<< Why?

Team 1-Layout

MeetRegulations

Project People,Plant, &

Environment

BurnVapor

IgniteVapor

PromoteClean

Combustion

AddFuel

MaintainSeal

SeparateLads

AccumulateLoads

CollectLoads

How? >>> <<< Why?

Team 2-Process

HandleVaporReliefLoad

RecycleLiquid

ProcessLiquid

ConveyLiquid

ImproveOperation

ReduceRisk

ImproveDistribution

System

InstallEquipment

SizeEquipment

Economically

SupportConductors

ReconfigurePower

System

StepdownVoltage

IncreaseCircuit Bar

Bus Capacity

Receive220 KVPower

How? >>> <<< Why?

Team 3a-Electrical Distribution

DistributePower

EnergizeSubstations

Co-generatePower

OptimizeTransformer

Capacity

MeterUsage

Seawater/Cooling water

WorthItem Cost

9,520,000 9,520,000

Treated Water 514,000 14,000

Raw Water 1,097,000 1,097,000

Fire Water 3,000 3,000

Nitrogen Supply 284,000 284,000

Natural Gas System 296,000 296,000

Flare System 1,638,000 1,200,000

TOTAL 13,352,000 12,414,000

UT

ILIT

IES

Cost/Worth ModelCost/Worth Model

Recommendation:

Use seawater for process coolingEliminate/Reduce seawater pumps

Item Cost Worth

Communications 0 0

Tank & Spheres 14,496,000 10,000,000

Interconnecting Rack 5,403,000 4,000,000

Underground Piping 3,724,000 2,600,000

Storm Water System 123,000 123,000

Wastewater System 2,060,000 1,600,000

Plant Infrastructure 4,703,000 3,500,000

TOTAL 20,947,000 10,000,000

EL

EC

TR

ICA

LCost/Worth ModelCost/Worth Model

Electrical 20,947,000 10,000,000Recommendation:

Combine Waste water andOff-plot Tank-feed

Item Cost Worth

Cafeteria/Training 1,500,000 1,500,000

Prayer Shelter 155,000 155,000

Security/Firehouse 556,000 556,000

Warehouse 3,092,000 2,300,000

Gatehouse 124,000 124,000

Main Substation 464,000 464,000

Port Substation 46,000 46,000

TOTAL 11,007,000 7,768,000

BU

ILD

ING

SCost/Worth ModelCost/Worth Model

Administration 4,947,000 2,500,000

Recommendation:

Reduce Size of Admin Building

45

,10

1,0

70

7,2

42

,00

09

3,5

42

,96

016

7,0

41

,00

0Cost/Worth ModelCost/Worth Model

Construction

Overhead

International Transportation

Escalation & Contingency

312,

927,

030

I.I. Original LayoutOriginal Layout1.1. Feed enters the plant.Feed enters the plant.

2.2. Goes to TankGoes to Tank

3.3. Back to RefineryBack to Refinery

4.4. Product flow from Refinery to Mixing area.Product flow from Refinery to Mixing area.

5.5. The products flow from Mixing area to The products flow from Mixing area to shipping area.shipping area.

6.6. The Utilities facilities located in east.The Utilities facilities located in east.

LAYOUT CASE

ITEM : Revise Layout of SiteITEM : Revise Layout of Site

TankFeed

Shipment area

Refinery

Mixing Area

Personnel an Utility Facilities

ORIGINAL LAYOUT

II.II. Proposed Layout Proposed Layout 1.1. Move the tanks to the south of Refinery.Move the tanks to the south of Refinery.

2.2. Moving all hydrocarbon products facilities Moving all hydrocarbon products facilities to the east.to the east.

3.3. Moving most of personnel and utility Moving most of personnel and utility facilities to the west near the site center.facilities to the west near the site center.

4.4. All the future siting is moved to the far All the future siting is moved to the far west.west.

LAYOUT CASE

ITEM : Revise Layout of SiteITEM : Revise Layout of Site

Feed

Shipment area

Refinery

Mixing Area

Personnel an Utility Facilities

Tank

ORIGINAL LAYOUT

The primary drive for this proposal was to The primary drive for this proposal was to minimize the piping to carry the back and forth minimize the piping to carry the back and forth flow sequences.flow sequences.

The result was Reduction in on-site piping from The result was Reduction in on-site piping from 7,847 m to 4,499 m.7,847 m to 4,499 m.

DISCUSSION

Advantage of new idea

More safety layout.More safety layout. Less piping in the project.Less piping in the project. Reliable operation.Reliable operation.

I.I. Original process flow designOriginal process flow design1.1. FEED STORAGE TANKSFEED STORAGE TANKS

2.2. INTRIM TANKSINTRIM TANKS

3.3. SHIPMENT TANKSSHIPMENT TANKS

PROCESS CASE

ITEM : Combine/Reduce Size Storage / Port TanksITEM : Combine/Reduce Size Storage / Port Tanks

FEEDLoading Arm

FEED STOCK TANKS INTRIM TANKS PRODUCT SHIPMENT TANKS

1 2 3

FUNCTION:

FEED PROCESS

FUNCTION:

CHECK QUALITY

FUNCTION:

SHIP PRODUCT

II.II. Proposed process flow designProposed process flow design1.1. FEED STORAGE TANKS (Multi functions)FEED STORAGE TANKS (Multi functions)

2.2. ONLINE SAMPLINGONLINE SAMPLING

3.3. DIRECT PIPELINESDIRECT PIPELINES

PROCESS CASE

ITEM : Combine/Reduce Size Storage / Port TanksITEM : Combine/Reduce Size Storage / Port Tanks

FEEDLoading Arm

FEED STOCK TANKS

INTRIM TANKS PRODUCT SHIPMENT TANKS

1 2 3

FUNCTION:

1-Keep plant online

2-Provide surge in case plant offline

3- Catch off spec for rerun

FUNCTION:

CHECK QUALITY

FUNCTION:

SHIP PRODUCT

ONLINE SAMPLING

Reduce excess tanks, pumps, and large piping Reduce excess tanks, pumps, and large piping diameterdiameter

Improve reliabilityImprove reliability Low initial cost Low initial cost Less maintenance Less maintenance (Pumps, Instrumentation, (Pumps, Instrumentation,

tanks, Monitoring wells)tanks, Monitoring wells) Less energy costLess energy cost

ADVANTAGE OF NEW IDEAADVANTAGE OF NEW IDEA

COST WORKSHEETCOST WORKSHEET

Savings = 25,183,000Savings = 25,183,000

LIFE CYCLE COST WORKSHEETLIFE CYCLE COST WORKSHEET

Savings = 39,629,000Savings = 39,629,000

ORIGINAL LAYOUTORIGINAL LAYOUT

PROPOSED LAYOUTPROPOSED LAYOUT

WEIGHTED EVALUATIONWEIGHTED EVALUATION

VE Recommendation 3 VE Recommendation 3

Revise 115 KV Plant Feed from Underground to Revise 115 KV Plant Feed from Underground to Above Ground (No. E-3)Above Ground (No. E-3)

Original design: install plant feed underground Original design: install plant feed underground at a distance of 4.3 kms from main substation.at a distance of 4.3 kms from main substation.

Proposed design: install plant feed above Proposed design: install plant feed above ground.ground.

Discussion: VE team feels above ground would Discussion: VE team feels above ground would be less expensive and is suitable for an be less expensive and is suitable for an industrial area.industrial area.

VE Recommendation 3 VE Recommendation 3

$ 4,299,696Savings

$ 2,047,104Total

$ 1,137,280$ 909,824

.8$1,137,280Subtotal markup

indirects (.8)

$ 141,04010.00lf 14,104Installation (use $ 10/lf)$ 150,0005000.00ea30Tower at 500’ spacing

$ 846,24010.00lf 84,624

2 feeders, 3” cable each (use $10/lf/cable x 6

units)

Proposed Design$ 6,346,800Total

$ 3,526,000$ 2,820,800

.8$3,526,000Subtotal markup

indirects (.8)

$ 1,410,400100.00lf14,104Installation (use $ 100/lf)

$ 2,115,60025.00lf84,624

2 feeders, 3” cable each (use $25/lf/cable x 6

units)

Original Design

TotalUnit CostMeasureQuantityItem

13 VE proposals and 41 design 13 VE proposals and 41 design suggestions.suggestions.

Initial cost savings $60 mil & PW LCC Initial cost savings $60 mil & PW LCC savings $68 mil.savings $68 mil.

Proposal (P-44)Proposal (P-44)11 not included in totals. An not included in totals. An alternate not fully developed & affects alternate not fully developed & affects ROI.ROI.

1 1 Reconfigure plant to make no BenzeneReconfigure plant to make no Benzene

SUMMARY OF RESULTSSUMMARY OF RESULTS

SUMMARY OF RESULTSSUMMARY OF RESULTSSUMMARY OF RESULTSSUMMARY OF RESULTS

RecommendationCategory

Initial Cost Savings

Total PW Cost Savings

% of PW Cost Savings Total

Layout 8,540,000 8,422,000 13.3

Process 38,700,000 47,177,000 74.3

Mechanical 7,622,000 7,874,500 12.4

TOTALS 54,902,000 63,473,500 100

VE PROPOSALS

Process 38,700,000 47,177,000 74.3

VE savings = 92.5% Grand Total PW Cost Savings





% of PW Cost Savings Total

Layout 2,900,000 2,900,000 56.5

Process 25,000 45,000 1.0

Mech/Elec 2,180,000 2,180,000 42.5

TOTALS 5,105,000 5,125,000 100

DESIGN SUGGESTIONS

Layout 2,900,000 2,900,000 56.5

Mech/Elec 2,180,000 2,180,000 42.5

Design Suggestions savings = 7.5% Grand Total PW Cost Savings




Annual O&M Cost

Savings


% of PW Cost Savings

Total

Reduce Size of Admin. Bldg.

4,590,000 (21,000) 4,010,000 35.4

Combine Buildings 990,000 11,000 1,118,000 9.9

Revise Layout of Site

2,660,000 26,000 2,940,000 26

Combine MCC & Control Room

300,000 5,000 354,000 3.1

Design Suggestions 2,900,000 - 2,900,000 25.6

LAYOUT TOTALS $11,440,000 $21,000 $11,322,000 100

LAYOUT TEAM




Annual O&M Cost

Savings

Total PW Cost

Savings


Total

Use Sea Water for Process Cooling

3,100,000 257,000 6,432,000 13.6

Eliminate/Reduce Seawater Pumps

1,500,000 (60,000) 987,000 2.1

Product Pipeline Scrapers

300,000 17,000 158,300 0.3

PROCESS TEAM




Annual O&M Cost

Savings

Total PW Cost

Savings


Total

Combine/Reduce Size of Storage/Port

Tanks33,800,000 685,000 39,600,000 83.9

Reconfigure Plant to Make no Benzene1

123,000,0001 3,500,0001 153,000,0001 -

Design Suggestions 25,000 2,000 45,000 0.1

Process TOTALS $38,725,000 $867,000 $47,222,300 100

PROCESS TEAM (CONT.)

1 1 Idea is not fully evaluated, needs further study, and is not included in the totalsIdea is not fully evaluated, needs further study, and is not included in the totals




Annual O&M Cost

Savings



Total

Eliminate One Loading Arm

1,980,000 (50,000) 1,555,000 15.4

Combine Wastewater & Off-Plot Tankfeed

118,000 80,000 798,000 7.9

Eliminate Tank Area Fill

400,000 (5,000) 357,500 3.6

Reevaluate Substation $864,000 - $864,000 8.6

MECHANICAL/PIPING TEAM



Annual O&M Cost

Savings



Total

Revise 115 KV Plant Feed

4,300,000 - 4,300,000 42.8

Design Suggestions 2,180,000 - 2,180,000 21.7

Electrical Design Suggestion

ND ND ND ND

Mechanical/Piping TOTALS

$9,842,000 $25,000 $10,054,500 100


GRAND TOTALS $60,007,000 $913,000 $68,598,800

MECHANICAL/PIPING TEAM (CONT.)

Total Impact of VETotal Impact of VE

Potential savings were identified in initial costs of about Potential savings were identified in initial costs of about $ 55 million which reduced 17% of the planned $ 55 million which reduced 17% of the planned investment.investment.

Another $ 1 million in annual operation and maintenance Another $ 1 million in annual operation and maintenance savings if all ideas were implemented.savings if all ideas were implemented.

Careful follow-on study should be given to the design Careful follow-on study should be given to the design suggestions that have a potential additional savings in suggestions that have a potential additional savings in excess of $ 2 million.excess of $ 2 million.

SUMMARYSUMMARY

THANK YOU

VALUE ENGINEERING Mohammed A. Us Shan Saleh H. Al-Mutairi Sagar M. Al-Anazi Samir A. Sulaiman Saleh...

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Transcript of VALUE ENGINEERING Mohammed A. Us Shan Saleh H. Al-Mutairi Sagar M. Al-Anazi Samir A. Sulaiman Saleh...