Asset Lifecycle Overview
Asset
1
An asset is an item, thing or entity that
has potential or actual value to an
organization. The value will vary between
different
organizations
and
their
stakeholders and can be tangible or
intangible, financial or non-financial [1].
The International Association of Oil &
Gas Producers defines assets as
facilities and associated infrastructure,
e.g.,
structures,
wells,
pipelines,
reservoirs, accommodation & support
services [2]. Examples, such as pressure
vessels, storage tanks, piping systems,
associated hardware (valves, fittings,
etc.),
relief
devices,
emergency
shutdown/control systems, etc.
Asset Lifecycle
Asset lifecycle according to PAS 55 is the
“time interval that commences with the
identification of the need for an asset and
terminates with the decommissioning of
the asset or any associated liabilities” [3].
In this article, the asset lifecycle in the oil
and gas industry can be divided into six
phases. There are design, procurement,
construction, commissioning, operation,
and decommissioning (Figure 1). It is
necessary to know how the different
phases of physical assets develop in the
industry. Careful consideration should be
given between short-term and long-term
benefits, between risks and reward
profiles, and associated costs when
dealing with all stages of the asset life
cycle to ensure the best value for money
is achieved with asset integrity
management [4], [5]. The asset lifecycle
phase and its stages in the oil and gas
industry are described below.
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Design Phase
a) Conceptualization
This stage is used for project screening,
we must conceptualize the project or the
physical asset system we want to
develop, identify the technical-economic
viability, and set the standard for both
basic
engineering
and
detailed
engineering.
Activities
in
the
conceptualization
stage
include
identification and scoping where various
initial concepts and options are
considered, determination of feasibility,
concept evaluation, preliminary cost
estimates are undertaken, and initial risk
assessments are completed. The
objective of a concept study is to
strategically review a number of
alternative project schemes to give
sufficient information to enable a go or
no-go decision on whether to progress
the most promising development
pathway [5]–[7].
The technology, key design parameters
of plants and major equipment are also
defined. A list of preliminary equipment is
generated, block diagrams, plant
capacity, indicated layout, process flow
diagrams (PFDs) for main process
systems, and preliminary engineered
process and utility equipment lists, also
the computerized systems to be used are
defined. The execution of the HAZOP
(Hazard and Operability Study) is also
developed, as well as determine the
possible OEE (Overall Equipment
Effectiveness) and RAM (Reliability
Availability Maintainability) studies [5],
[7].
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Figure 1. Asset Lifecycle Phases and Stages
b) Basic Engineering
Basic
engineering
or
Front-End
Engineering Design (FEED) defined the
general guidelines and basic ideas of the
project. It is undertaken to analyze the
various technical options for new
development with the objective of more
clearly defining the project [5], [6].
During FEED a workable process design
is generated, project cost is analyzed,
system is identified, and the initial plot
layout is proposed. For example,
physical location, critical equipment,
process and major equipment design
specifications,
one-line
diagrams,
process flow diagrams (PFD), utility flow
diagrams,
piping
and
instrument
diagrams (P&ID), heat and material
balances (HMB), plot plans, layout
drawings, engineered process and utility
equipment lists, single line diagrams for
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electrical, electrical equipment and motor
schedules, vendor quotations, detailed
project execution plans, resourcing and
work force plans, etc., and some other
flat deliverables. In addition, we must
develop a general description of the main
physical assets. For example, in the case
of a pump we can have its discharge
pressure and flow defined in this stage
[5]–[7].
c) Detail Engineering
The focus in this stage is on designing all
project elements to sufficient detail so
that these can be fabricated and
constructed. The project team takes the
FEED design and implements rigorous
design
calculations,
safety
and
environmental auditing, interdisciplinary
review and operability checks. At this
stage we have all the details, including
detailed plans and specifications, metric
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computations
and
memory
of
calculations, specifications and list of
materials and equipment, package and
strategies
for
contracting
the
construction, requirements and purchase
orders of all materials, logistics and
control plans [5], [6].
2 Procurement Phase
At this phase it is ensured that the
purchase of materials and equipment are
made in accordance with the approved
supplier lists and with the specifications
in the requisitions. It is where purchase
orders are placed, management of
quotation processes, presentation of
these to the respective contracting
commissions and analysis of offers [5].
Compliance with the delivery dates of
equipment and materials, evaluation of
the manufacture of equipment, control
the traffic of materials and equipment
through customs and carry out the
corresponding procedures for their
nationalization, store equipment and
materials for the project, control the
materials, to ensure their timely
availability
and
carry
out
the
reconciliation of materials once the
construction is completed [5].
Inspection related to the procurement
process includes certified chemical
analysis of the steel or other material,
physical properties of order-specific
materials, including special metallurgical
tests, inspection for defects in metals or
other materials of construction: visual,
magnetic particles, x-rays, ultrasound,
verification of dimensions, tolerances,
location of connections, manufacturing
techniques such as forging, pressing,
rolling, welding, polishing, etc. and
pressure testing and certification by a
qualified inspector to certify compliance
with applicable codes [5].
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3 Construction Phase
In construction phase includes several
activities that will depend on the size of
the work. It is simply to translate what is
in the plans into reality, for which,
execution, manufacturing, installation,
inspection plans must be considered,
including health, safety, and environment
plans [5].
It is possible that at this phase they
should adjust what is indicated on the
plans, since the reality may be different.
There are many cases that during
construction modifications are made to
the plans, so that there are no
complications a posteriori
during
operations and maintenance [5].
4
Commissioning Phase
a) Pre-commissioning
It is the stage where the checklist, loop
tests, tightness tests, among others, are
carried out. This activity is normally
included in an EPC (Engineering,
Procurement and Construction) contract
[5].
b) Commissioning
Once the mechanical completion during
construction is complete, this stage
begins and the preparation and testing
for the plant commissioning is carried
out, completing the checklist of the precommissioning stage [5].
It is important to proceed to clear the list
of pending items, physical and
meticulous verification of the area,
comparing
flow
diagrams
and
mechanical drawings with what is
installed
and
verify
operational
connections for start, stop, normal and
emergency operation, checking that they
have blockages, purges, corresponding
vents, and drains. Also verify line purging
and placement of blinds (pancakes) in
equipment not subject to hydrostatic
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tests (compressors, pumps, safety
valves, others) and finally the preparation
of the blind list [5].
5
Operation Phase
a) Start-Up
In this stage, the stable operation of the
plant is achieved for a minimum time of
24 hours, culminating the initial operation
period and after starting the normal
operation
phase.
Testing
the
performance of the plant's equipment
and systems and maintaining stable
operational continuity, to analyze
performance now occurs [5].
In this stage also proceed to verify the
quality
of
the
final
products.
Representatives of the equipment
manufacturers to witness the initial
operation of the equipment are present,
for which it is necessary to have
experienced and trained operators at
startup and document all failures in case
they occur, being invaluable information
for operating and keep [5].
b) Operation and Maintenance
This is the longest phase of the asset and
therefore is where the mission of a
maintenance organization and its
different strategies to ensure the
operational continuity of physical assets
is centered [5]. During the asset life
cycle, the ageing process may begin
ahead of an asset or component first
entering services. In the operation
phases, analysis of the outputs from
inspection, testing, and maintenance
activities enable duty holders to identify
trends, respond to performance issues
and identify early indicators of ageing
and obsolesce [8].
purpose condition. In this stage, asset
integrity related to the prevention of
major incidents is very important [8]. This
stage will be detailed later.
c) Renew
This stage is the one in which the asset
is re-powered, based on major
improvements and maintenance. It is
normally reflected in a turnaround, the
objective of which is to bring the plant to
its optimal conditions [5].
6 Decommissioning Phase
This is the phase of decommissioning of
the physical asset, it is due to the costs
of maintaining or extending production
are greater than the associated
revenues, the asset is no longer
economically viable and has reached its
‘economic limit’, or because its spare
parts cannot be located since it may be
obsolete equipment [5],[9].
Decommissioning is the final stage of an
oil or gas project. At the end of a field’s
life, when production has ceased,
decommissioning is the process whereby
the hydrocarbon reservoirs are isolated
and
associated
infrastructure
is
removed and disposed of, so that the
producing area is left in a safe and
environmentally acceptable condition.
Decommissioning is a long, costly, and
complex process, requiring cooperation
by the key stakeholders to manage
technical, economic, operational, social,
and environmental issues [9].
The prime purpose of inspection, testing,
and maintenance is to ensure that the
condition of the asset is always
understood and that it remains in a fit-forFebri Ramdani Nugraha
Materials and Corrosion Engineer
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References:
[1]
International Organization
for Standardization, “ISO
55000 (2014): Asset
management-Overview,
principles and terminology,”
2014.
[2]
International Association of
Oil & Gas Producer, “Asset
integrity - The key to
managing major incident
risks,” 2018.
[3]
Institute of Asset
Management. and British
Standards Institution., PAS
55-1: Asset Management Part 1: Specification for the
optimized management of
physical assets. 2008.
[4]
J. Ramasamy and S. M.
Yusof, “A Literature Review
of Subsea Asset Integrity
Framework for Project
Execution Phase,” Procedia
Manuf, vol. 4, pp. 79–88,
2015, doi:
10.1016/j.promfg.2015.11.0
17.
[5]
E. Vásquez, “Reality
Centered Maintenance
RCM,” 2021.
[6]
M. West, “Assessment of
the Engineering Design
Capability and Capacity in
the Oil and Gas Sector in
Western Australia,” 2011.
[7]
P. Christensen et al., “18R97: Cost Estimate
Classification System - As
Applied in Engineering,
Procurement, and
Construction for the Process
Industries,” 2005.
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Materials and Corrosion Engineer
[8]
J. S. Apache, D. Ritchie, I.
H. Shell, D. May, and N.
Pickering, “Guidance on the
Management of Ageing and
Life Extension for UKCS Oil
and Gas Installations,”
2012.
[9]
The Commonwealth, Oil and
Gas Decommissioning
Toolkit - Practical Guidance
for Governments.
Commonwealth Secretariat,
2022.
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