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
TransportProduct # 2
TransportProduct # 3
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
SUMMARY OF RESULTSSUMMARY OF RESULTS
RecommendationCategory
Initial Cost Savings
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
SUMMARY OF RESULTSSUMMARY OF RESULTS
RecommendationCategory
Initial Cost Savings
Annual O&M Cost
Savings
Total PW 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
SUMMARY OF RESULTSSUMMARY OF RESULTS
RecommendationCategory
Initial Cost Savings
Annual O&M Cost
Savings
Total PW Cost
Savings
% of 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
SUMMARY OF RESULTSSUMMARY OF RESULTS
RecommendationCategory
Initial Cost Savings
Annual O&M Cost
Savings
Total PW Cost
Savings
% of 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
SUMMARY OF RESULTSSUMMARY OF RESULTS
RecommendationCategory
Initial Cost Savings
Annual O&M Cost
Savings
Total PW Cost Savings
% of PW 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
RecommendationCategory
Initial Cost Savings
Annual O&M Cost
Savings
Total PW Cost Savings
% of PW 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
SUMMARY OF RESULTSSUMMARY OF RESULTS
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
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