Lloyd’s Register Energy Canada Limited - LREC

Risk-Based Inspection Program

Best Practice – Executive Summary

Justin Daarud
Asset Integrity Program Consultant

Lloyd’s Register Energy Canada Limited

Calgary, Alberta Canada

Lloyd’s Register Energy Americas, Inc

Houston, Texas USA
Lloyd’s Register Energy Canada Limited - LREC

Introduction – Justin Daarud

• Worked in Asset Integrity For Lloyd’s Register since 2007
• Experience in both US and Canadian Regions
• Worked with Capstone and Lloyd’s Register in Asset Integrity on Asset
Integrity Programs and Risk-Based Inspection (RBI) Programs
• Managed several programs in every phase (Design Based, New
Construction, In-Service, End of Life)
• Specializes in Asset Integrity for Risk-Based Inspection Programs and
Asset Integrity Program Consulting
• Account Manager for Several Clients
• Background in Consulting, Management and Mechanical Engineering
Lloyd’s Register Energy Canada Limited - LREC

Agenda
• Understanding – What is a Risk-Based Inspection (RBI)
Program
• Identified Failures of a RBI Program
• Critical Success Factors for a “Best Practice” RBI Program
• RBI Program Value
• RBI Program Components and Involvement
• Summary
• Questions
Lloyd’s Register Energy Canada Limited - LREC

Understanding
– What is a Risk-Based Inspection (RBI) Program?
Lloyd’s Register Energy Canada Limited - LREC

What is Risk-Based Inspection (RBI)?

“a risk assessment and management process that is focused on loss of

containment of pressurized equipment in processing facilities, due to
material deterioration. These risks are managed primarily through
equipment inspection.”

American Petroleum Institute (API) RECOMMENDED PRACTICE (RP)

580
SECOND EDITION, NOVEMBER 2009
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RBI Program – From API RP 580 Management Process

Source – Directly from API RP 580, Second Edition Nov. 2009, Page 30
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Risk is the Product of Two Parts

Risk is a measure of BOTH

PROBABILITY of a failure

AND

CONSEQUENCE of a failure
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Typical Risk Matrix

Probability Ranking
1 HIGH Consequence
Consequence
A-Catastrophic
A-Catastrophic
B-Very
B-VerySerious
Serious
2 MED HIGH C-Serious
C-Serious
D-Significant
D-Significant
E-Minor
3 MEDIUM E-Minor
Probability
Probability
1-Very
1-VeryHigh
High
2-High
2-High 4 LOW
3-Moderate
3-Moderate
4-Low
4-Low
5-Very 5
5-VeryLow
Low
E D C B A
Consequence Ranking
Lloyd’s Register Energy Canada Limited - LREC

Consequence and Probability for Risk-Based Inspection

RBI focuses on a particular risk:

• The risk of a loss due to the loss of a pressure boundary by inspectable
causes
Possible consequences:
• Injury/fatality (safety) due to a toxic or flammable event
• Environmental damage
• Production Loss
• Minimal impact (this is considered)
 Lloyd’s Register Energy Canada Limited - LREC

Risk is Time-Dependent

Next Year

Today
Risk, Events per Year

Time, t
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What’s RBI All About? Using Inspection to Manage Risks

Unacceptable Risk/POF
Probability of Failure

Inspect and fix if needed

Inspection Interval Time

• Risk-Based Inspection is Proactive – It Utilizes the Information
Available to Manage Risk
• Time-Based Methodology is Read and React
Lloyd’s Register Energy Canada Limited - LREC

Identified Failures of a RBI Program

• So….an RBI Programs are in place…..Are they working?

• What kind of RBI Program failures are expected?
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Identified Failures of a RBI Program

Please note: Client = Operator, Vendor = RBI Consultant/Services Organization
• No Structured Approach to a RBI Program (Client/Vendor Issue)
• The RBI Tool Implementation is completed by unqualified personnel and
management (both Client/Vendor) and it’s “Check the box”
• Once RBI Tool is Implemented, Client is Expected to be an “Expert”
• No Operational Documentation – Specifically for the Sustain Phase
• No Transition or Change Management Process from Time Based to a RBI
Program
• Failure to Measure Value and Results = Failure to Continually Improve
• Inconsistent RBI Methodology
• Poorly Executed Sustain Phase due to lack of Expertise
….and so on…..
Lloyd’s Register Energy Canada Limited - LREC

What do the Failures tell us about the RBI Programs?

• No Structure for the RBI Program, including the Program itself

and the Operation
• Lack of Expertise and Experience
• No Partnership between Client and Vendor
• The Components of the RBI Program are Weak or Nonexistent
• No Feedback of Value or Key Performance Indicators (KPIs)

• What can be done about this to make sure the RBI Program is a
Success AND a Best Practice?
Lloyd’s Register Energy Canada Limited - LREC

Five Critical Success Factors for

“Best Practice” RBI Program

1. Successful RBI Tool Implementation

2. Develop Operational Documents
3. Execute a Transition Phase
4. Establish a Training Program
5. Sustain and Review RBI Program
Lloyd’s Register Energy Canada Limited - LREC

Other Key Information to Achieve Best Practice

• Each RBI Program should have Four Phases

• Implement
• Transition
• Sustain
These be considered
one Dynamic phase
• Review/Measure
• Client / Vendor Partnership MUST exists
for Each Phase
• Client / Vendor Involvement Changes
throughout each Phase
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Graphic of the Critical Success Factors to a Best Practice RBI

Program with Phases and Involvement
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More Information about each of the Five Critical

Success Factors of a Best Practice RBI Program
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1. Successful RBI Tool Implementation

• Successful RBI Tool (e.g. Software) Implementation –
planned and coordinated via a Vendor-Client
partnership, and executed by the Vendor. 1 HIGH

Probability Ranking
• The Implementation Phase is considered the 2 MED HIGH

selection, installation, and deployment of the RBI 3 MEDIUM

Tool to facilitate the RBI Program. 4 LOW

• It is a requirement that this phase is completed with 5

E D C B A
a defined scope including the most accurate Consequence Ranking
information as possible.
• It is assumed that this Phase is conducted by qualified
and experience personnel with the Vendor.
Lloyd’s Register Energy Canada Limited - LREC

2. Develop Operational Documents

• Develop and Implement Operational Documents for

RBI Program during the Implementation Phase for
Program Sustainability (Evergreening) – coordinated
via a Vendor-Client partnership.
• The RBI Operational Documents are Processes
and Procedures that guide and enable Business
Units and Operators (users) of the RBI program
to achieve best practice results.
• Following the development of these documents,
the Client must train and execute the operation of
the RBI program defined by these documents.
Lloyd’s Register Energy Canada Limited - LREC

3. Execute a Transition Phase

• Execute a Transition Phase from Implementation

to Sustainability (Evergreening) and Review
Phases – coordinated via a Vendor–Client
partnership.
• The Phase transitions the RBI Program to
Sustainability and facilitates Client resource
development.
• The Vendor is an operational consultant for
the RBI Program, and provides resources,
training, support, and guidance to provide
value to the Client.
Lloyd’s Register Energy Canada Limited - LREC

4. Establish a Training Program

• Establish and Implement a Training Program –
This action is planned and initiated by the Vendor
and executed jointly through the Client and the
Vendor together. This propels the Client into the
Sustain Phase.
• This program builds the Client’s expertise in
execution of the RBI program through the tool
and operational documents of the RBI program
in preparation for the Sustainability and
Review Phase.
• Establishing this program ensures that the
Client resource expertise is developed at a
sustainable level.
Lloyd’s Register Energy Canada Limited - LREC

5. Sustain and Review RBI Program

• Sustain and Review the RBI Program by measuring Key
Performance Indicators (KPIs) – coordinated via a Vendor-Client
partnership.
• This Sustain and Review Phase dynamically updates the RBI
program with fresh results and measures the RBI Program with
KPIs.
• KPIs such as dollar value savings and risk level reduction are
used to indicate progress towards achieving best practice as well
as providing value-visibility to management.
Lloyd’s Register Energy Canada Limited - LREC

Value Gained Through RBI

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Value of RBI Program

Time Based vs. Risk Based Inspection Intervals
Potential Savings in Percentage
• Risk-Based Inspection Intervals for Assets
can exceed Time Based Inspection 100%
Intervals by GREATER than 2 times the 90%
length 80%
• With RBI Assessments, each Asset can 70%
reduce inspection costs and mechanical 60%
integrity related down times by at least 50%
Time Based
HALF the costs 40%
Risk Based
• The chart indicates the potential savings of 30%
Assets with Risk-Based Inspection 20%
assessment intervals
10%
• For One Alberta Facility – This can equal 0%
up to $10M in Savings over several years! Turnaround Turnaround Turnaround
1 2 3
Lloyd’s Register Energy Canada Limited - LREC

Overview of the Components of a RBI Program

 Lloyd’s Register Energy Canada Limited - LREC

Typically There are Three Base Components for Each Phase

of a Best Practice RBI Program
• Components for Each Phase – Tools, Process/Procedure, and People are
Required
• Thus to fill those components with the best solution, Vendors and Clients must
work together The Four Phases
Tool Software

People
RBI
Program
Operational Qualified
Documents Resources

Process/Procedure
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Why is a Client / Vendor Partnership Important?

• Where Experts and Processes are not available – Each party

can supplement each other!
Lloyd’s Register Energy Canada Limited - LREC

Client / Vendor Involvement Best

Typical
Practice
Involvement
Involvement
Phases
Phases
Implementation
Implementation Transition
Transition Sustain//Review
Sustain Review

Vendor
Vendor
Actual Involvement Client
Client
Involvement
Involvement (Solid Line)

Desired
Involvement for
Best Practice
Vendor
(Dotted Line)

Client Vendor
Client

Time
Time
Lloyd’s Register Energy Canada Limited - LREC

Summary
• Understanding – What is a Risk-Based Inspection (RBI)
Program
• Identified Failures of a RBI Program
• Critical Success Factors for a “Best Practice” RBI Program
1. Successful RBI Tool Implementation
2. Develop Operational Documents
3. Execute a Transition Phase
4. Establish a Training Program
5. Sustain and Review RBI Program
• RBI Program Value
• RBI Program Components and Involvement
For more information, please contact:
Overview of Lloyd’s Register
Justin Daarud Energy Services
Asset Integrity Program Consultant • Asset Integrity Consulting – All Phases
Asset Integrity Services • Risk-Based Inspection Consulting
• RBI Software Consulting
Lloyd’s Register Energy
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