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
Lloyd’s Register Energy Canada Limited - LREC

Risk is the Product of Two Parts

Risk is a measure of BOTH

PROBABILITY of a failure

AND

CONSEQUENCE of a failure
Lloyd’s Register Energy Canada Limited - LREC

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
Lloyd’s Register Energy Canada Limited - LREC
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?
Lloyd’s Register Energy Canada Limited - LREC

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 These be
• Sustain considered one
• Review/Measure Dynamic phase
• Client / Vendor Partnership MUST
exists for Each Phase
• Client / Vendor Involvement
Changes throughout each Phase
Lloyd’s Register Energy Canada Limited - LREC

Graphic of the Critical Success Factors to a

Best Practice RBI Program with Phases and
Involvement
Lloyd’s Register Energy Canada Limited - LREC

More Information about each of the Five

Critical Success Factors of a Best Practice
RBI Program
Lloyd’s Register Energy Canada Limited - LREC

1. Successful RBI Tool Implementation

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

Probability Ranking
the Vendor.
2 MED HIGH
• The Implementation Phase is considered the
3 MEDIUM
selection, installation, and deployment of
the RBI Tool to facilitate the RBI Program. 4 LOW

• It is a requirement that this phase is 5

E D C B A
completed with a defined scope including Consequence Ranking
the most accurate 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

Lloyd’s Register Energy Canada Limited - LREC

Value of RBI Program

Time Based vs. Risk Based Inspection
Intervals
•Risk-Based Inspection Intervals for
Potential Savings in Percentage

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!
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
Tool
Phases

People

Process/Procedur
e
Lloyd’s Register Energy Canada Limited - LREC

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
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
Lloyd’s Register Energy • RBI Software Consulting
• Engineering Consulting
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C +1 832 727 7820 Analysis, etc
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• Process Safety Management Services
• HAZOP, HAZID, LOPA, SIL – Studies
• Human Factors
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Workshops
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