1. 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

2. 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

3. 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

4. Understanding – What is a Risk-Based Inspection (RBI) Program?

5. 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

6. RBI Program – From API RP 580 Management Process
Source – Directly from API RP 580, Second Edition Nov. 2009, Page 30

7. Risk is the Product of Two Parts
Risk is a measure of BOTH
PROBABILITY of a failure
AND
CONSEQUENCE of a failure

8. Typical Risk Matrix Probability Ranking Consequence Ranking A B C D E
HIGH
MED HIGH
MEDIUM
LOW 1 2 3 4 5
Probability Ranking
Consequence
A-Catastrophic
B-Very Serious
C-Serious
D-Significant
E-Minor
Probability
1-Very High
2-High
3-Moderate
4-Low
5-Very Low

9. 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)

10. Risk is Time-Dependent
Next Year
Today
Risk, Events per Year
Time, t

11. What’s RBI All About? Using Inspection to Manage Risks
Unacceptable Risk/POF
Inspect and fix if needed
Probability of Failure
The red line represents the acceptable level of risk/POF
Time
Inspection Interval
Risk-Based Inspection is Proactive – It Utilizes the Information Available to Manage Risk
Time-Based Methodology is Read and React

12. Identified Failures of a RBI Program
So….an RBI Programs are in place…..Are they working?
What kind of RBI Program failures are expected?

13. 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…..

14. 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?

15. Five Critical Success Factors for “Best Practice” RBI Program
Successful RBI Tool Implementation
Develop Operational Documents
Execute a Transition Phase
Establish a Training Program
Sustain and Review RBI Program

16. Other Key Information to Achieve Best Practice
Each RBI Program should have Four Phases
Implement
Transition
Sustain
Review/Measure
Client / Vendor Partnership MUST exists for Each Phase
Client / Vendor Involvement Changes throughout each Phase
These be considered one Dynamic phase

17. Graphic of the Critical Success Factors to a Best Practice RBI Program with Phases and Involvement

18. More Information about each of the Five Critical Success Factors of a Best Practice RBI Program

19. 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.
The Implementation Phase is considered the selection, installation, and deployment of the RBI Tool to facilitate the RBI Program.
It is a requirement that this phase is completed with a defined scope including the most accurate information as possible.
It is assumed that this Phase is conducted by qualified and experience personnel with the Vendor.
Consequence Ranking A B C D E
HIGH
MED HIGH
MEDIUM
LOW 1 2 3 4 5
Probability Ranking

20. 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.

21. 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.

22. 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.

23. 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.

24. Value Gained Through RBI

25. 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 Intervals by GREATER than 2 times the length
With RBI Assessments, each Asset can reduce inspection costs and mechanical integrity related down times by at least HALF the costs
The chart indicates the potential savings of Assets with Risk-Based Inspection assessment intervals
For One Alberta Facility – This can equal up to $10M in Savings over several years!

26. Overview of the Components of a RBI Program

27. 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
People
Process/Procedure

28. Why is a Client / Vendor Partnership Important?
Where Experts and Processes are not available – Each party can supplement each other!

29. Client / Vendor Involvement
Best Practice Involvement
Typical Involvement

30. 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
Successful RBI Tool Implementation
Develop Operational Documents
Execute a Transition Phase
Establish a Training Program
Sustain and Review RBI Program
RBI Program Value
RBI Program Components and Involvement

31. Overview of Lloyd’s Register Energy Services
Asset Integrity Consulting – All Phases
Risk-Based Inspection Consulting
RBI Software Consulting
Engineering Consulting
Fitness for Service, Integrity, Failure Analysis, etc
Complex Analysis
Corrosion Engineering
Process Safety Management Services
HAZOP, HAZID, LOPA, SIL – Studies
Human Factors
Drill Rig Inspection and Inspection Workshops
Project Management Consulting
Pipeline Integrity Risk and Consulting