Ygor Guillarte López
President
Yokogawa Mexico, Central America and Caribbean
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View from the Top

Main Automation Contractor Philosophy

Wed, 01/25/2012 - 15:32

Q: How have you worked as a company to move from simply providing field instrument to creating value-added services and solutions for your clients?

A: We believe that the best way Yokogawa can serve the energy sector is to provide services oriented towards specific solutions. As strategic partner, we have to support our clients to manage the cultural change associated with the introduction of new solutions. Once great technologies are introduced, effciency begins to fall in the mid-term because applications were either never updated to reflect changes made in the process or simply due to a lack of maintenance. Organizationally, companies typically lack the skilled resources to dedicate a team to obtaining more from existing platforms or software.

Therefore, we are introducing performance-based services in order to manage such assets, to keep them up-to-date and up and running under optimum conditions. Yokogawa is also looking at introducing more advanced diagnostic tools in its systems, such as advanced gas chromatograph analysers that alert us when correlation is lost, so we can dispatch the certified technician to the plant to calibrate it to keep control algorithm to push for maximum performance. This will move to preventative solutions rather than corrective actions.

From the automation lifecycle perspective, one key aspect is to also make sure that the project is implemented in the correct manner. Yokogawa is recognized worldwide as a pioneer in introducing a new project execution methodology called Main Automation Contractor (MAC) in collaboration with companies such as Shell. MAC is a philosophy where Yokogawa acts as the master organizer of the different EPC contractors working on a project to guide them in their implementation of technology, under the direction of the client. In this contracting arrangement, Yokogawa participates early in the construction of a project to make sure that the right concepts, design and application are included, that processes are standardized, and that the project is executed properly. This concept creates savings at the end of the day, and also makes the operator more flexible in the long run. The main reason for this is that the end user receives an installation designed to be low-maintenance over time, and because projects are standardized, trained personnel can move from plant to plant, reliability and optimum performance is never compromised, all while lowering costs in several CAPEX areas.

Pemex, as any other oil major, often relies on the contractors to do their engineering, procurement and construction (EPC). EPCs are awarded based on many different areas of specialty, but automation is rarely one of them. This makes automation one of the most risky and expensive areas for EPC contractors to deal with, whilst at the same time being one of the most important aspects of implementing a clean and effcient project. Automation typically represents 3%-7% of the total investment depending on the plant complexity. However, if automation is implemented incorrectly, projects like refineries fail to operate in the clean and effcient way in which they were originally designed. To prevent this suboptimal scenario, we offer EPCs our services on refinery or upstream projects to bundle all aspects of an automated system, from the safety functions, including analyser sampling systems and right measurement devices, all the way to enterprise production systems.

Considering the acceptance customers like Pemex are giving us by offering advice and services in the field and recommending designs in a project, we are building the infrastructure in Mexico to now initiate an expansion phase.

Q: Can the MAC philosophy be applied when you are talking about upgrading a plant rather than a greenfield project?

A: Yes, it is feasible, and we are suggesting this at some of Pemex’s reconfiguration projects. Regardless of how a process is being modified, the new portion can be standardized, which later helps to upgrade the legacy side long-term. Yokogawa knows from experience that you should implement advanced control or optimization in phases when you build a new plant. You have to wait for stabilization to take place, which typically takes six months to one year. At this point, you have collected enough critical information to build a model, and then deploy your application. This is why providing long-term project support is critical for advanced applications, and also why these applications are lacking in so many Pemex projects: consultation and service ended at the point a project was completed, and advanced systems are underutilized once they are handed over to operations.

Q: How suitable is this philosophy for upstream projects?

A: We have been talking mainly about refinery projects, but this philosophy has been implemented at upstream projects as well, such as deepwater platforms.

Q: Is Pemex providing the right incentives for these solutions to be integrated into projects?

A: Right now, the dilemma is employing solutions that provide long-term effciency gains at the right initial cost. Typically, when we propose a solution, we consider that EPC companies will decline to spend money to deal with the long-term running of the plant. For EPC companies, cost is always king, and we have to be cost competitive regardless of the advantages we bring. Of course, the end user wants an optimal solution for the long term, but the EPC never receives compensation from the end user to behave that way. The best way to contract services for EPC companies is to look for local contractors that can do the job according to minimum compliance levels.

Yokogawa is one of the most experienced technology solutions providers in the world, with over 100 years of experience from the days when we introduced the first Distributed Control System (DCS). In the years to come, we hope to expand our business to capitalize on the opportunities that Mexico presents to us. We are growing our service centres (downstream, offshore and power) by establishing the technical assistance centre (TAC) for Spanish speaking countries in Mexico and Central America. We aim to soon initiate assembling advanced analysers by moving shelter assembly and construction to Mexico. Mexicans are very good at model transformation. Using this, and the software and products from Japan combined with know-how from various worldwide engineering groups, we are certainly building a very effcient and experienced team for the Mexican and Latin American markets.

Q: How much has Yokogawa used the MAC philosophy in Mexico?

A: We are evangelizing the concept in Mexico, and some Mexican private-sector energy players are implementing our philosophy on their projects. In general, companies like the MAC concept, but it is relatively new in the country. We believe MAC will hopefully become the new way to execute large projects in Mexico. An important step for us is that it will be implemented at Pemex’s new refinery and at the Salamanca refinery conversion project.