Oil and Gas Distillation: Where Does EAM Fit in at Midstream?

Midstream operators would benefit greatly from enhanced attention toward the incorporation of enterprise asset management solutions into their day-to-day processes.

What would any midstream oil or gas operation be without distillation columns? At a time when barrel prices remain at a fraction of what they were in the heyday of 2014 and production finally begins to slow, fractionating columns and accompanying assets represent something of an unwavering force throughout the industry. Let’s call it a new beginning for oil and gas companies – even though the technology has been around for hundreds of years and the science, arguably, for millennia.

"Oil companies must move focus off of upstream operations and onto midstream equipment."

Distilling the essence of oil and gas fractionation

As crude prices pale to what they were just a few years ago, oil companies must work toward moving the focus of their asset management programs off of upstream operations and onto midstream equipment. Whereas uptime at the extraction site once kept production on an even keel with demand, uptime at midstream facilities like refineries supports the strength of a wide portfolio of goods.

No doubt distillation columns take up a majority of the discussion in midstream asset management. When operating as intended, this equipment fractions crude into gasoline, jet fuel and other distillates. It is also what separates natural gas liquids into an array of profitable hydrocarbons. Suffice it to say, there would be no midstream without distillation.

However, these assets come at a high operational cost. According to the U.S. Department of Energy, distillation towers were responsible for 40 percent of the average refinery’s energy consumption (years previous, the DOE places the number closer to 70 percent). In 2001, national fractionation took nearly 5 quadrillion Btus annually to stay in action.

For this reason – and others to follow – midstream operators would benefit greatly from enhanced attention toward the incorporation of enterprise asset management solutions into their day-to-day processes, especially as they pertain to oil and gas distillation.

Starting from a technical standpoint

By their very nature, distillation columns and the systems interlocking them are complex, fragile asset networks. The success of each tower and its production depends on the functionality of those before. If one column goes offline or acts outside operational standards, there is little recourse to ensure the quality and cost efficacy of any successive distillate materials.

Furthermore, fractionating towers also have a reputation for being difficult to control with the utmost precision. Even a slight abundance of pressure or rise in reflux rates not only sets an oil and gas refiner back in energy expenditures – according to Chemical Processing – but prolonged miscalibration and heat exposure could compromise the integrity of the components therein, leading to frequent reactionary tune-ups and parts replacements. Those detract from uptime.

EAM strategies produce many specific, detailed benefits to the businesses that use them, but from a broader vantage, this discipline helps asset owners and operators understand more about their equipment, each asset’s operational performance and where these different machines intersect and link – master asset lists and asset criticality rankings, for instance. As far as maintenance is concerned, greater control over operational data acquisition and retention within a user-friendly platform like IBM Maximo allows maintenance workers to access whatever information their hearts desire regarding how distillation columns perform independently or in conjunction with other assets, how this equipment has performed in the past and other valuable insight to determine how best to preempt future failures.

As we’ll discuss next, the freedom to manipulate data and cultivate deeper business intelligence at a quick clip certainly comes in handy when it comes to the diverse oil and gas market.

Selling smarter by staying prepared

Any oil and gas magnate worth his or her salt has eyes glued to any and all indicators foretelling market performance. In this economic environment, it virtually goes without saying.

"Oil and gas companies require flexibility to respond to market variations."

Yet not unlike a network of interconnected distillation columns at an oil or NGL refinery, how the menagerie of crude distillates fare can be a matter of interdependence. Moreover, lucrative swings in the market may favor one distillate over others. Oil and gas companies require the flexibility to respond to these variations actionably by altering operations in a manner that positions themselves for success. But without innovative data management strategies and the means to reinforce uptime across all its fractionation processes, a business cannot capitalize on profitable margins for certain products when the time is right.

As important as even availability and reliability across all assets may be, don’t confuse EAM with out-of-the-box solutions that promise the world and don’t deliver. While EAM may consist of software and physical technology, it’s ultimately a cultural change in how businesses perceive and work with their most capital-intensive assets. So, when oil and gas companies establish proactive maintenance policies for distillation column upkeep and leverage sensors or telemetry that allows for greater operational awareness, they’re eliminating risk by building a culture of visibility. Market performance will play out however it plays out – who’s to say what oil and gas’s economic profile will be next year? What companies can control is how easy it is to compile data, collaborate and move accordingly thanks to EAM without being bogged down by equipment problems.

Recovering from adverse weather conditions

Global refinery utilization rates have not been ideal in recent memory – one recent BP study clocked utilization at 79.6 percent in 2015, the lowest it has been in nearly three decades. Here in the U.S., refineries have traditionally been much more efficient than the worldwide average over the last few years, but flooding along the Gulf Coast – particularly in Louisiana, home of many U.S. refineries – may cause as much as a 0.6 percentage point drop in domestic utilization, according to CNBC.

If the future success of the oil and gas industry resides in midstream operations, operational efficiency at refineries must remain high. Should Mother Nature have other plans, these facilities require solutions in place to enhance on-site maintenance programs. It’s not just about building a system for keeping repair crews on task when whether compromises fractionation assets, but designing an infrastructure where crucial data dispatches workers intelligently so as not to perform maintenance out of order.

Increased attention to oil and gas distillation assets may introduce a heightened level of intricacy into the mix. That said, when backed by EAM solutions and proactive maintenance midstream operations may fast become the industry’s saving grace.