Companies in the petroleum, petrochemicals, and transportation sectors have suddenly found themselves reassessing their storage capacity, thanks in no small part to the COVID-19 pandemic and the global oil supply glut. For tanks taken offline for maintenance, execution cost and schedule effectiveness are imperative given the pressing storage demand and capital expenditure cuts. Tank maintenance benchmarking is the key to reducing the cost and outage time for these projects.
What many owners lack, however, are reliable metrics to measure the cost and schedule performance of their tank maintenance projects. To identify opportunities to reduce costs and minimize out of service durations, companies need to compare their tank maintenance projects with industry-wide norms for cost and schedule competitiveness. But data curation for tank maintenance activities requires time and experience that can be challenging to come by.
In 2014, IPA undertook a concerted effort to establish key metrics owners can leverage to gauge the cost and schedule competitiveness of their tank maintenance portfolios. The research was based on detailed data from hundreds of tank maintenance project evaluations conducted by IPA. In conducting the tank maintenance research, IPA also ascertained organizational and project management Best Practices that correlate with project performance improvements. Tank maintenance professionals shared valuable insights into the planning, development, and execution of tank repair and upgrade work with IPA.
IPA continues to update the tank maintenance benchmarks. During 2019, IPA benchmarked eight of the world’s leading companies in the petroleum, petrochemicals, chemicals, and transportation industries, providing data on more than 300 new tank maintenance projects. These benchmarking studies included tanks holding from 10,000 to 600,000 barrels of crude, gasoline, diesel, or other chemicals. These projects have been executed globally, with costs ranging between US$0.01 million to US$7 million. Cleaning, inspection, waste disposal, repairs/upgrades, internal and external coating, and recommissioning cost and schedule data were benchmarked against Industry.
These benchmarking studies also took a closer look at the composition of organizations responsible for carrying out these projects. For example, even though about 70 percent of companies assign a project control specialist to tank maintenance projects, only half assign a full-time site construction manager to the projects, resulting in significant cost performance differences.
These projects have significant opportunities for potential cost savings and improved schedule performance for most companies, especially as demand for oil, petrochemicals, and other chemical products may be slow to increase as the coronavirus pandemic takes its time to unfold.
To learn more about IPA’s tank maintenance benchmarking and related capabilities, please contact us by submitting the form below.