Capital Projects

When a major capital project involving a change or addition to a process safety covered facility is approved, the pre-startup safety review considerations typically begin. The length of time for design, site preparation, installation, and 

GUIDELINES FOR PERFORMING EFFECTIVE PRE-STARTUP SAFETY REVIEWS 

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The interest-rate equivalent of the cash discounts is 2 percent per month, since this discount could he obtained every month if payment were to he made at the beginning of the month rather than, as at present, at its end. Since the hills are settled monthly, the notional interest is paid monthly and should not he compounded. The discount is equivalent to 12 monthly simple-interest payments per year. Hence, from Eq. (9-31) the effective annual interest rate on discounts = (12)(0.02) = 0.24 = 24 percent. It would, therefore, he a good use of surplus cash to reduce this debt as quickly as possible. This would require cash equivalent to one-sixth of the annual hills due, or 16,700, to he avadahle. It can, therefore, he assumed that this level of liquidity is not available for capital projects, either as working capital to reduce the debt or for fixed-capital projects. Further, since the new project will not increase sales, it cannot generate further debt of this kind. Hence, this source is not available to capitahze the new project. 

To distinguish between a review and an audit, some definitions will be provided. A review is a critical examination or evaluation of any operation, procedure, condition, event, or equipment item. Reviews can take many forms and be identified as project reviews, design reviews, safety reviews, pre-start-up reviews, and so on. The following discussion of the review process will deal with project reviews associated with capital projects and focus on the area of process safety. 

FIG. 26-10 The phases of a capital project. (CCPS, 19S9 by peimission of AlChE. )... 

Review Policy The review policy should estabhsh when project safety reviews should be done. All capital projects, large or small, should have one or more safety reviews during the course of the project. The number and types of review shoiild be stated in a management policy. Any reasons for exceptions to the policy should oe documented as well. The policy should address not only projects internal to a company, but also any joint ventures or turnkey projects by outside firms. 

Capital Project Review and Design Procedures (for new or existing plants, expansions, and acquisitions) Appropriation request procedures Risk assessment for investment purposes Hazards review (including worst credible cases)... 

Remember as you set priorities that you and your team must consider the expected benefit to the company, division, or unit as a whole, rather than simply addressing a single gap. Obviously, any specific immediate risk you identify in the course of your assessment must be dealt with quickly and responsibly however, be careful not to let anomalous findings skew your perspective on broader priorities. For example, the absence of a capital project review process is a significant gap. However, if there is only one project per year this gap may have lower priority than an existing but seriously deficient operator training program. 

In addition to considering those elements that interrelate, you should pay particular attention to those that affect your operations most directly. For example, if your company has a major expansion program underway, you would assign the capital project review and design procedures element a higher priority than if your company has deferred all major capital projects. 

Process improvements. Measure progress against previously identified goals. For example, if completing capital project safety reviews within two weeks of submittal was a facility s objective, is this now being achieved ... 

Next, consider employees in categories that describe their interaction with the PSM system. For example, engineering staff (along with R D and business unit staff) need to understand the requirements of the capital project review system. Training on these interactions can complement the "universal" modules. 

Capital project review and design procedures Reviews of major equipment acquisition apply... 

As is true in PSM implementation in the United States, it is not practical to try to do everything at once you must establish priorities for PSM design, development, and installation. The priorities that were appropriate in your U.S. effort may not apply directly to international locations. For example, in some international locations, plants are required to submit risk analyses to the government before undertaking major capital projects. This existing practice may make the capital project review element of PSM a less uigent priority. 

Process Safety Review Procedures for Capital Projects... 

The "Capital Projects Design Review Procedures" element of process safety management assures that the design, the equipment and the construction are properly reviewed for all new projects. Process safety review procedures should be involved with the project from its inception. One method of illustrating the various phases of a project is shown in Figure 8.1 (Figure 5-1 from CCPS, 1989a). 

Equipment integrity is primarily achieved by good design and installation and the proper consideration of human factors should be an integral part of the design phases (see Section 8.2.2 on Capital Project Review and Design Procedures and the earlier sections of this chapter. 

Capital Project Review Community Outreach Contractor Program Crisis Management Emergency Planning Emergency Devices/Alarms... 

Shutdown work is classified three ways (1) repetitive, (2) non-repetitive, or (3) capital projects. All three require operations supervisor s approval. All shutdown work is sent directly to the maintenance central planning department. 

Further developments in the effectiveness of the FCC gasoline sulfur reduction additives will allow a number of refiners to meet the required reduction in gasoline sulfur without undertaking costly capital projects. Additionally, improvements in the CO promoter additives will reduce NO emissions when the promoter is used. Finally, other... 

Merrett, A. J. and Sykes, A, The Finance and Analysis of Capital Projects, Longmans... 

Traditionally, the mix of pretreatment equipment required to meet a specific FW volume and quality specification is provided as a permanent installation under a capital project, although today there is a growing global market in outsourced water services. Typically, vendors such as Ecolochem, Inc., a world leader in this type of service, provide trailer-mounted, mobile water-processing equipment that can be... 

Review Techniques The review techniques used at the various stages of a project should be selected based on the amount of process information and detail available. Figure 23-47 depicts some typical review techniques at the various stages of a capital project. A detailed description, including the type and amount of process information required, for each review technique can be found in Guidelines for Hazard Evaluation Procedures Second Edition with Worked Examples (CCPS, 1992). The process information required for the review should be defined and documented in the review guidelines. Up-to-date and accurate process information is essential to conducting a successful review. 

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