The Decommissioning Mindset

Decommissioning Mindset.

Jonathan Turner

2/13/2022 8 min read

Executive Summary

The current economic environment has made product lifecycles of chemicals much shorter. Also cost pressures, regulatory pressures, influence of non-state actors and changing market geographies, mean that manufacturing plants (examples are chemical process plants, Oil & Gas facilities, hydrocarbon processing and power plants and similar) need to be shuffled around, shut down or shifted at a much higher frequency than in earlier years. Due to regional and country cost differentials, plants that cannot operate economically in the U.K. can be moved abroad or sold to a third party for future operations This article is a primer on how company management can handle this without getting overwhelmed by the complexities of these projects. This can happen because quite a few company management teams may be very skilled and versatile when setting up new plants, but may be inexperienced while doing the reverse, (decommissioning, decontamination and demolition)

Why decommission?

There has been a change in the economic environment in the world due to various factors such as very low price of crude oil, reduction is carbon emissions, technological advancement in production manufacturing and renewable energy market, advances in communications, transport and policies of states such as low entry tariffs, encouragement for foreign direct investment, tax incentives, etc. The product life cycle undergoes a change when an external environment changes. If we look at events in the last few years, it becomes clear that the economic boom and bust cycle happens much faster, unlike in the past, where plants could adjust to the environment over a period of a 10 years or so, now economic change happens quickly with the effects having devastating consequences on particular industries like Oil and Gas. In the present economic climate, there are several times when plants need to be decommissioned. It could be because of technological obsolescence, or due to various regulatory, taxation or cost pressures, or even due to pressures from third parties. As with Oil and Gas, we have seen life extension projects over the past 10 years in order to continue producing oil cost effectively from depleting reservoirs. Such a sudden change in the market has put all focus now firmly on decommissioning,

You would not spend money on fixing an unreliable car if in the long run it would cost you more than buying a new one.

In all these cases, there is a need to decommission an existing plant. The fixed assets need to be utilised for alternate products or simply disposed off to recover part of the investment. Alternatively, they can be relocated to a new place, to set up a new facility, which may be geographically, even several thousands of miles away. Typical examples would be of a plant that may be sold off in the UK to a Middle East company and the new owner may want to shift it to Middle East or Asia. While we have always heard of these cases, the fact is that the frequency of these events happening has increased and will continue to increase as the economy becomes more and more fast-changing and globally integrated.

Decommissioning a plant in the chemical, pharmaceutical, hydrocarbon processing and similar industries is much more challenging, than other in sectors like engineering or automobile, because of the nature of the chemicals handled in such plants. Many of these may be explosive, toxic or in other ways harmful to the environment. In these plants, where chemicals are toxic, explosive, or corrosive, a sound methodology is needed, finding all the unknowns in order to leave the plant safe with any residual hazards or risk either eliminated or identified. This article presents a methodology that represents good practice.

So where do we start?

Once it is clear that there is a need to decommission the plant define the end state, the next stage is estimation of costs. Be aware that many of the variety of consultants, contractors and others are very familiar with erection and commissioning costs, but may not be completely at ease with estimating decommissioning costs. So think about getting some help from people who either specialise in these activities, or have a years of experience completing decommissioning or demolition project, to get the best results.

Secondly, ensure that the people whose assistance is solicited are reliable and trustworthy, as the nature of the initial work is confidential. You do not want to unnecessarily alarm your regular employees, or suppliers and other stakeholders. You have to of course involve these people, but at a later date.

Thirdly, many times these shutdown/exit costs are needed not only for actually carrying out the work itself, but also to work out "What-If" and similar strategic scenarios. If your global strategy is therefore going to be based on this figure, then you should be sure that it is a good enough estimate and it is kept under wraps. This cost will be one of the major decision points on whether de-commissioning makes sense or not. This first cost estimate will be the lynchpin on which the whole business case (maintaining the status quo, or shutting down the plant) will rest and one cannot stress the importance of arriving at a realistic figure.

The Process-Rolling up your sleeves and starting it
Once it is clear that the plant has to be shut down, one can then start planning the process of doing so. The process of decommissioning is a 3D process- It involves the three Ds of Decontamination, Dismantling and Disposal.

Decontamination

This can be defined as removal of contaminants from the system by washing, heating, chemical treatment and mechanical cleaning. The term contaminant denotes the undesirable chemical entity present in the assets used for manufacture. The internal and external surfaces of equipment are exposed to chemicals during service. Thus the objectives of any decontamination process are
a) To reduce occupational exposure.
b) To recover and recycle the facility, equipment and materials as far as possible.
c) To restore the site for future use which may be an alternate use (e.g. may be commercial rather than industrial).

The forms of contaminants are
a) Solids: Residues, products
b) Liquids: Residual liquids in reactors, tanks, heat exchangers, pumps
c) Vapors: Volatile chemicals in pipes, storage tanks
d) Aerosols: Liquid and solid particles suspended in air. This includes powders and dusts.

Decontamination methods used to clean up the contaminants are
a) Standard: Water, Compressed Air
b) Non-standard: Steam, Caustic, Detergents, etc
The process of decontamination can take place naturally, if a chemically contaminated surface is exposed in air and allowed to be washed with water for a long period of time. The process has no control on time element and the decontamination results cannot be predicted on time line.

The second method uses chemical treatment, water treatment, steam treatment and the decontamination results can be predicted with reasonable accuracy.

Decontaminate in Stages

A structured decontamination process is always carried out in multiple stages. Each stage results in the equipment progressively nearing the "clean" status.
These stages are:
a) Primary decontamination: This is the initial cleaning of equipment using chemicals and with water followed by steam/nitrogen/compressed air. The level of contamination is measured. If the contamination level is high, the next activity does not take place unless acceptable decontamination criterion is achieved.
b) Dismantling: The equipment is dismantled to check the presence of contaminanation. The stage is also utilised to carry out inspection and testing of equipment to ascertain the utility of equipment for future use
c) Secondary decontamination: The dismantled parts of the equipment are cleaned with chemicals, water, steam and/or compressed air. The level of contaminant is measured at this stage. If the level of contaminant is high, the process is repeated again and again, till acceptable decontamination criterion is achieved.
d) Disposal of equipment: The equipment is declared fit for disposal. It can be sold off or put to use for other purpose (say transported to another location to set up the same plant again).
e) Disposal of waste: The process of decontamination generates liquid and solid waste. This is to be disposed off in a systematic manner. The liquid effluents go to the effluent treatment plant and the solid waste is sent for incineration or any other approved disposal method.

It is important at this stage to record all findings and highlight where any residual contamination will remain that cannot be safely removed at this stage. Gather all relevant P&ID's and COSHH / MSDS data sheets in order to hand over to the dismantling contractor. Reference on the P&ID's the applicable MSDS for that area of plant/process.

Dismantling

The process of dismantling a chemical plant, oil & gas facility or a pharmaceutical plant, starts with selection of a proper contractor (who has experience in dismantling plants in stages) for the facility and infrastructure. The contractor should have requisite number of staff & supervisors to check the quality of work. Many times, the dismantling work would be need to be done in stages, as after the first stage of dismantling, the equipment may need to be given for secondary decontamination (following a break in containment). After this is over, it may be dismantled further into its component parts.
The contractor should have sufficient engineering expertise to carry out surveys, make as built drawings, track the dismantled parts and carry out associated jobs, so that nothing gets lost or misplaced, especially if the same plant is to be assembled again at another location.
The dismantled equipment has to be secured with special protective packing e.g. a reactor with stirrer can be transported provided the stirrer is locked. A separate packing arrangement is needed for different types of equipment.

Disposal

The disposal process may consist of either complete disposal of the dismantled plant, or complete shifting of the dismantled plant to another location, or a partial disposal of old equipment (the rest can be salvaged for use in the new plant being assembled at the second location, or sold to a third party). So there are several variations possible in the break up of equipment that is to be disposed off outright versus the equipment that is to be re-used. You must weigh up the cost of extracting plant, dismantling cleaning for re-use, income from re-sale v's the cost of straight for demolition and scrap metal sale.
Disposal of effluent and waste should be carried out only after ensuring that a valid consent from the environmental authorities is available and the characteristics of effluent and waste are well within the norms specified in the consent order.

Risk Assessment

The processes involved in decontamination, dismantling and disposal are not routine processes and considerable deviations take place in carrying out the last batches in equipment and the cleaning operations that follow. A thorough risk assessment study is needed for each of the procedures. It is recommended that such exercise be planned well in advance to mitigate the effects of the activities on safety of people and environment.
In case this is not done properly, some unfortunate incidents may occur, for which normally company management are held liable for prosecution, by the authorities. HAZDEC is an excellent risk assessment tool that can be used in any stage of a plant's lifecycle to aid highlighting areas of unknowns during decommissioning. The aim of a HAZDEC is to gather all information, hidden risks and pass on the contractor responsible for dismantling in order for them to plan and manage the work safely. To know more about our HAZDEC process please see our website www.decomoffshore.com

Internal support from various departments

The decommissioning project should involve members from other departments too, whose expertise would be necessary in carrying out the project. These are people from Finance & Accounting, Taxation, Purchasing, IT and HR who would be helping the core team from Production/Plant Operations, Engineering/Maintenance & Safety / Environmental services, to complete the project. Gathering all the information quickly when a plant is closing is essential, usually the best engineers, the people with valuable knowledge about the site and processes are the first ones to gain future employment, once this knowledge is lost both time and costs to gather this information will quickly escalate. Involving the senior management is also recommended since a lot of asset disposal, asset modifications, scrap sales and so on are involved and decisions need to be made quickly. The site administration team is also important since these people will be getting the necessary permissions from regulatory authorities, tax authorities and local communities who may be adversely affected by the project.

Conclusion

As can be seen from above, the decommissioning process for a manufacturing plant or a site is complex in nature; it is not a simple "demolish and exit" job. Hence, a structured approach is essential for success. However, each project may have certain unique features that require special procedures to be developed. It is a good idea to get help from experts (who have plant decommissioning expertise) wherever necessary. The project can be as complex (or even more so), as compared to setting up a new plant or facility as there are so many hidden factors unknowns and hazards that when discovered unexpectedly can increase costs but worse, they can affect the safety of personnel and the environment if the proper control measures are not in place.

DECOM GROUP

Decom Group Limited 
9 Greenfinch Road
Hetton Le Hole, County Durham
DH5 0GG

+44 (0) 191 704 2001
info@decomgroup.co.uk

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