Collaborative Effort on Enhancing the Process and Productivity by Five-year Renewable Life Cycle Agreement

Executive Summary

The Bahrain Petroleum Company (Bapco) supplies petroleum products locally and internationally and exports crude oil on behalf of the government of Bahrain. Bapco currently owns a 267,000-bpd refinery along with storage facilities for 14 million barrels, and marketing and marine terminals for its portfolio of petroleum products.

In 2012, Bapco switched from a conventional annual maintenance contract with Yokogawa to a five-year renewable life cycle agreement (LCA), also with Yokogawa. Based on the significant process and productivity improvements that were achieved, the LCA was renewed in 2017 for another 5 years. Each of these LCAs was customized by Yokogawa to meet Bapco’s specific requirements, and through the provision of emergency support and training of refinery personnel, they have helped to maximize plant uptime while preventing spikes in OPEX.

 

The Context and the Challenges

The first Yokogawa distributed control system (DCS) was installed at Bapco’s refinery in 1994. Over the years, many Yokogawa DCSs have been installed in different sections of this complex. The first annual maintenance contract with Yokogawa came into effect in 1997, and it was renewed annually over the next 15 years.

As a result of advances in technology and demands from the market, Bapco felt the need for a comprehensive maintenance program. As a trusted vendor, Yokogawa was asked to come up with a solution that could address issues involving OPEX variation, skill development, and plant uptime. Emergency support with a fixed response time was also a priority.

In addition, to aid in planning upgrades and maintaining a balance between CAPEX and OPEX, Bapco wanted to have a multi-year fixed budget for the provision of spare parts and obsolescence management.   The periodic replacement of parts also needed to be covered in the contract to avoid spikes in the OPEX budget.

 

The Proposed Solution

After consultations with Bapco, Yokogawa proposed a life cycle agreement solution. This tailor-made solution was for a period of five years and was fine tuned to meet the needs of Bapco’s maintenance and operation departments and the expectations of Bapco management.

Under the proposed LCA, Yokogawa would for a fixed fee assure plant uptime for a five-year period through the provision of guaranteed support services and spare parts, and by conducting periodic parts replacement. This would include the preparation of analysis reports on HART and FOUNDATIONTM Fieldbus field assets using Yokogawa’s plant resource management (PRM) KPI tool and the creation of obsolescence guidelines that would enable Bapco to plan upgrades. Yokogawa would also conduct regular skills training courses for Bapco engineers.

Yokogawa submitted a techno commercial bid that was evaluated by the Bapco technical and commercial team. An LCA agreement was signed that covered the five-year period from July 2012 to June 2017. Over that five-year period, Yokogawa held regular review meetings with Bapco personnel, conducted training programs, and engaged in technical forums to share knowledge. Through these activities, people from the two companies got to know each other better and developed a good working relationship. Based on that strong foundation, the LCA was renewed in 2017, by extending the coverage to new plants at the BAPCO refining complex. 

 

Implementation

In quarterly meetings, progress was regularly reviewed and evaluated. Management level meetings helped clarify expectations. Experienced engineers not only performed maintenance work on their periodic visits to the refinery, but also suggested areas for improvement and proposed modifications. The use of reports generated by the PRM KPI tool reports helped improve the performance of field assets. Continuous training was provided by experienced trainers to the Bapco engineering, operation and maintenance team.

 

Results 

As a result of these efforts, Yokogawa hit its KPI targets and met its commitment to maintain plant uptime.

1. OEM engineers have been available whenever required.
2. Cost effective: Spares and plant uptime have been guaranteed, and for nine straight years the KPI targets have all been hit.
3. Efficiency has improved thanks to the provision of regular training for Bapco’s maintenance; operation and engineering team.
4. Early notification of impending obsolescence has enabled Bapco to maintain a balance between CAPEX and OPEX.
5. Field asset availability and performance have improved thanks to the use of the KPI reporting tool.
6. Preventive maintenance provided by OEM engineers has improved system performance.
7. Limited lifespan & consumable parts replacement service by OEM engineers.
8. Regular review meetings have been conducted to judge the effectiveness and benefits of measures carried out under the life cycle agreement.

The assistance provided based on the strong technical expertise and capabilities of Yokogawa’s personnel has assured that Bapco’s systems will always remain state of the art and perform optimally. The guaranteed support program (Assured MTTR) has added value and TCO reduction has been maximized with the continuous engagement of the Bapco team.

 

Voice of Customer

"Yokogawa’s comprehensive life cycle agreement first came into effect in 2012 and was renewed in 2017, and it has helped Bapco immensely. It has given peace of mind to the Bapco team, and the advice on modifications from Yokogawa’s engineers have helped us improve our processes and productivity. It has also been very cost effective as the OPEX for Yokogawa’s systems has been set to a fixed amount, year in and year out. Our engineers and operators have also benefited immensely through Yokogawa’s training programs. Last but not least, the provision of guaranteed support and the early notification of obsolescence as part of the LCA have helped us to strike a balance between CAPEX and OPEX."

 

Appendix – Systems Used

1. Unique guaranteed support program
2. PRM KPI tool that caters to asset management  
3. Training programs to improve the skill set of the BAPCO maintenance, operation, and engineering team
4. Long-term fixed cost for spares 
5. Early notification of obsolescence to ensure on-time planning of upgrades
6. Mandatory life cycle parts replacement as part of life cycle agreement offering

 

Multi-year program

• Compared to annual year contract, it is cost-effective for the customer.
• Cost of spares and periodic replacement parts distributed over the multi-year period is beneficial to both the customer and Yokogawa.
• A long-term partnership is established with the customer.
• Sustainability is improved.
• This allows Bapco to more efficiently manage technical skill development via training programs, over a long period of time.
• Shutdown maintenance programs can be utilized more efficiently.

 

Impact on customer operation

• 24/7 emergency support ensures plant uptime.
• The conduct of technical forums enhances knowledge on Yokogawa's products and technologies and improves skillsets.  
• PRM KPI tool reports enhance proactive maintenance and management of field assets.
• Budgeting of CAPEX and OPEX made easy.