Having equipment and spares suitably preserved and fit for use when required is a recognised business risk for all international oil & gas operators.
The challenge faced by the industry is how to quantify the risk and what are the implications of critical spares being damaged by corrosion caused by poor preservation procedures by the OEM and subsequently by the Operator when the goods are stored for extended periods in the Operators warehouse and yard facilities.
Why is corrosion such a problem?
The corrosion of steel can be considered as an electrochemical process that occurs in stages. Initial attack occurs at anodic areas on the surface, where ferrous ions go into solution. Electrons are released from the anode and move through the metallic structure to the adjacent cathodic sites on the surface, where they combine with oxygen and water to form hydroxyl ions. These react with the ferrous ions from the anode to produce ferrous hydroxide, which itself is further oxidised in air to produce hydrated ferric oxide (i.e. red rust.) The sum of these reactions can be represented by the following equation:
Fe + 3O2 + 2H2O = 2Fe2O3H2O
(Steel) + (Oxygen) + (Water) = Hydrated ferric oxide (Rust)
The corrosion process requires the simultaneous presence of water and oxygen. In the absence of either, corrosion does not occur.
In simple terms, neither the OEM or the Operator put a lot of focus on long term corrosion protection of equipment and/or spares. Traditional methods of protection such as silica gel dropped into crates and boxes, or foil wrapped components will soon fail, mainly due to human intervention or temperature fluctuations from manufacture to packaging to shipping to storage to final use. Inevitably, these materials will fail and allow humidity or water ingress to form corrosion, either on external surfaces or hidden inside the component itself.
As supply chain and logistics experts, you will have seen many examples of this type of packaging failure result in corrosion.
It is a proven fact, based on the gathering of qualitative and quantitative data from a cross section of industries, that damage to stored equipment and spares is a problem.
According to National Association of Corrosion Engineers, (NACE), over the past 50 years, several national costs of corrosion studies have been conducted. Using different approaches, the studies all arrived at corrosion costs equivalent to about 3%–4% of each nation's gross domestic product (GDP). Using a 3.4% of global GDP (2013), the global cost of corrosion can then be estimated to be US$2.5 trillion. Using available corrosion control practices, it is estimated that savings of between 15% and 35% of the cost of corrosion could be realized, i.e., between US$375 and $875 billion annually on a global basis.
Applying this logic, to equipment and spares in storage, we can estimate corrosion related damage at 15% for the low case and 35% for the high case. Therefore, let’s take an example of a typical Oil & Gas Operator having an inventory of equipment and spares of 35,000 line items at a value of $150M, (no allowance for depreciation over time). Our experience from previous oil & gas spares preservation programmes tells us that the following conditions usually apply;
i. Long-term storage, (30 years+) - Equipment bought for projects or held as critical spares. Been in storage for 30+ years with no active preservation to ensure protection against corrosion. In this scenario we would expect to see costs associated with corrosion to be in excess of 50% of inventory value for repair or replacement
ii. Palletised equipment and spares - Probably the most common configuration for stored items, may be a single tagged item or multi-units on a single pallet. In the majority of cases, the protective layers of polythene have been breached, again through human intervention or damage when moving the pallets. We would expect costs associated with corrosion on palletised equipment / spares to be close to the high case at 35% of value
iii. Crated items – We define this as any stored equipment/spares that are encased in either wooden, metal or plastic crates or cases, the majority being wooden construction. The variation in scope here is vast from small cases to room-sized crates that house high value, complex oilfield equipment. In the majority of cases, the condition of crated items tend to be well protected. We assume that this is because the OEM and Operator have recognised the importance of effective preservation to ensure the crated equipment is suitably protected during transit, storage and prior to hook-up/commissioning. Our observations suggest that where there has been either moisture ingress or temperature variations resulting in condensation forming on metal surfaces, we witness both surface and internal corrosion. This is accentuated where foil or polythene wrapping has been breached or where exposed bright metal surfaces were not protected using wax or lubricating coatings.
iv. Small items – Normally stored in bins in a controlled environment. Ranging from PCB’s, gaskets, fixings, bearings, etc. These items are often left unprotected in storage bins for long periods of time. It is a simple process to bag these items in VpCI impregnated polythene bags or use small emitters in the packaging box that the item is stored in.
v. Externally stored equipment, spares, pipework – Most equipment that is kept outside tends to be crated or wrapped to protect it against the weather. However, often we see accelerated corrosion occurring due to the formation of moisture caused by humidity. This can be combatted using a range of vapour corrosion inhibitors such as wax, lubricating film, polythene and emitters.
Pipework stored externally can be preserved by fogging in a VpCI powder to the internals of the pipe, then cap the pipe using proprietary plastic caps or shrink-wrapped polythene.
How Vapour Phase Inhibition works for protection of equipment and spares in storage
Vapour phase Corrosion Inhibitors, (VpCI) will form the basis of initial preservation requirements where appropriate. VpCI’s condition an enclosed atmosphere with a protective vapour which migrates to recessed areas and cavities and condenses on metal surfaces where the VpCI ions form a molecular inhibiting film on component surfaces. This makes it ideal for application into stored packages, crates and equipment internals.
Dissolved VpCI atoms migrate to the surface of the metal forming a mono-molecular layer on all surface of the component or spare part, thus eliminating the formation of corrosion during the storage period.
Specific active preservation requirements from vendors will need to be identified and included within the preservation procedures so as correct selections of compatible corrosion inhibitors can be specified and used.
We'd be happy to discuss vapour phase corrosion inhibition in more detail:
Call Stuart or Scott: +44 (0)1224 772 694
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