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Business Risk Response Modeling:

Steam Maintenance Decision Guidance for the Downstream Oil and Gas Industry

Learn how steam degradation can have financial repercussions to your downstream facility:

We spoke with our Strategy Development Manager, Shawn Rampy, for his insight into the impacts of weather on steam cushion in downstream facilities.  

Thank you for spending some time with us, Shawn. What is steam cushion and why is it critical to the Downstream Oil and Gas industry?

Many of the operations at downstream O&G facilities — both refineries and petrochemical plants — run off steam power. Steam creates pressure, which needs to be maintained within correct thresholds in order to keep the plant running smoothly. In addition to a minimum pressure requirement, a certain amount of surplus, or cushion, is stored. If a plant falls into a steam deficit, operators must decide which parts of the plant to shut down, which can not only cause huge loss economically, but can also damage the mechanics of the plant, which are engineered to run continuously. Transporting this steam to different areas of a plant is critical and requires miles and miles of pipe.

Does the weather affect steam cushion within an O&G plant? If so, how?

Operators at these plants observe that the greatest threats to maintaining sufficient amounts of steam power for their facilities most often occur during periods of high rainfall rates. The theory is that high rainfall cools down the steam pipes to the point that the steam in the pipes becomes water, greatly reducing the pressure and therefore the power available for critical plant processes. The exact rainfall rate threshold, however, is unknown and is likely unique to each facility. Additionally, operators agree that other weather factors such as temperature, wind, rainfall accumulation and/or cloud cover are likely also having an effect on their ability to maintain sufficient amounts of steam pressure.

One of StormGeo’s major U.S. refining clients has reported that the financial losses associated with a loss of steam can be in the “tens of millions of dollars.”

Why don’t plants modify or insulate their pipes so that they’re not as affected by weather?

A typical O&G downstream facility has hundreds of miles of steam pipe on-site. Material and labor to insulate these pipes is simply too cost prohibitive to be a feasible option. Insulating just 10 miles of steam pipe, for example, costs millions of dollars. With over 140 refinery and 50 petrochemical plants in U.S., most of which use steam to some capacity, the costs to the U.S. Downstream O&G industry to (re)insulate all steam pipes would easily run into the billions of dollars.

Petrochemical pipes

A typical O&G downstream facility has hundreds of miles of steam pipe on-site. Material and labor to insulate these pipes is simply too cost prohibitive to be a feasible option. Insulating just 10 miles of steam pipe, for example, costs millions of dollars

What can be done to mitigate this risk of steam cushion loss?

The business challenge of maintaining steam requires the collaboration of a plant and Business Risk Response team. The end goal of this methodology must be to provide business stakeholders specific and actionable recommendations when weather threatens their business. StormGeo does this by engaging with the client in three steps:

  • Identification and Correlation of Weather Hazards to Business Impacts – Compile a comprehensive and empirical understanding of the relationship between various weather threats and the resultant impacts of those threats upon the business
  • Cost/Loss Analyses of the Business Threat and Potential Responses – Engage consultatively with the client to fully understand the “hard” costs and “soft” costs related to the weather-related threats identified in #1 as well as the costs associated with possible mitigating responses to these threats that are available to the business. This will allow us to establish the proper risk thresholds at which these various mitigating responses should be executed.
  • Operational Stand-up of a Business Risk Response Modelling – Once the weather hazards-to-impacts correlations are understood (#1) and the proper response-specific risk thresholds are determined (#2), an expert system is created that, when weather threatens, advises the client what specific responses are appropriate and when those responses should be executed. This model will be driven in real-time by StormGeo’s best-in-class probabilistic weather hazards forecasts.

Click here to go through a hypothetical example of the above workflow.

This methodology can be applied to electric utilities and other businesses susceptible to weather-related events. For more information, contact info@stormgeo.com.