The Project was scheduled as a "Fast Track" project to achieve completion within 27 months to enable GPIC to reap the financial benefits of early completion.
The success of this project is mainly attributed to the following:
- The support and guidance of the GPIC Board of Directors throughout the Project
- Selecting the Best technology
- Selecting a good EPC Contractor with prior experience in similar work
- Identifying and carrying out tie-ins with the existing plants in Turnaround 2007
- GPIC's selection of appropriate Vendors for all equipment and for the selection of Sub Contractors for the site works
- Visits by GPIC Project Team key personnel to other CDR Units prior to awarding the contract to identify requirements and improvements
- The involvement of the GPIC Project team in the detailed engineering Phase to ensure the design was commensurate with GPIC and International standards.
- The involvement of the GPIC Project Team in construction and commissioning work
- The project management carried out by the GPIC Project Team through close monitoring of all activities related to project execution by the EPC Contractor
- The involvement of young Bahraini Engineers from the initial stages of the Project to give them good exposure and to develop them for future assignments
- The involving a Safety Specialist from the Construction stage at site to ensure the construction work was carried out safely and in compliance with the GPIC Permit to work system. Therefore, the project site complete more than 900,000 man hours without LTA, from commencement to completion of the project
- Monitoring and witnessing inspection activities of all critical equipment on site and off site at vendors' workshops to ensure quality control at all stages of fabrication of critical equipments
- Regular visits to vendors workshops and EPC Engineering offices to monitor and verify the progress of the work and to draw out strategies to avoid delays
- Cash flow plans, drawn from the beginning of the project, to ensure sustained liquidity for payment of the Contractor Invoices on time, without any delay
- Training and familiarization visits by GPIC personnel at similar technology plants, in preparation for commissioning and start up
- 19/02/2007: GPIC Board of Directors approval for the CDR Project
- 17/04/2007: Request for LSTK Proposals
- 28/06/2007: Receipt of Technical Proposals
- 31/07/2007: Receipt of commercial Proposals
- 21/08/2007: Technical & Commercial negotiations with EPC Contractors
- 03/09/2007: Receipt of Revised offers
- 08/09/2007: Request for additional budget
- 25/10/2007: Signing of contract with MHI & TICB for the CDR Project construction
- 04/04/2008: Signing of KS1 Agreement with MHI, Japan
- 29/07/2008: Start of Test Piling Activities
- 10/08/2008: CDR Project site handover for construction
- 27/08/2008: Inauguration of CDR construction work by GPIC MD
- 18/09/2008: Issue of daily Reports CDR – Daily Bulletin
- 31/01/2009: Completion of Installation of CDR Columns
- 27/07/2009: CDR Model to Training Centre
- 25/11/2009: Mechanical Completion
- 20/12/2009: Start of CO2 Production
- 24/12/2009: Inauguration of CDR unit by GPIC Board
Aerial View August 2009
The Ammonia and Methanol plants were originally designed for 1000 metric ton per day each. Subsequently to the debottlenecking of these plants in 1989, their capacity increased to 1200 metric ton per day each. In January 1998, GPIC commissioned its Urea plant having a capacity of 1700 metric tons per day
Prior to the commissioning of our Urea plant, GPIC’s Methanol plant was utilizing around 275 metric tons of Carbon Dioxide every day, out of the total quantity of 1240 metric tons generated as a by-product of the Ammonia plant. The remaining 965 metric tons of Carbon Dioxide per day was being vented.
The commissioning of Urea therefore greatly helped in cutting down the emission of greenhouse gases to the environment and significantly contributed towards the economy of the Kingdom of Bahrain.
With the availability of proven Carbon Dioxide capture technology and its positive impact on the environment, GPIC installed the Carbon Dioxide Recovery (CDR) Unit in 2007, to recover Carbon Dioxide from the Methanol reformer flue gas. In addition to further minimizing emission of Green House Gases (GHG) and ensuring GPIC’s commitment to efficient utilization of the natural resources, the addition of CDR Unit also augmented the Methanol production capacity to 120 metric tons per day and also enhanced our Urea production capacity.
CDR Project Conceptualization
CDR project was conceived in the year 2006 as a strategic development plan for enhancing the production of Methanol and Urea plants. This was identified as a very promising environmental friendly project, as it helps to minimize the Green House Gas emissions and also contributes towards the National economy.
The objective of the study was to evaluate the CDR Project proposal covering both the technical and economic aspects of the project. Accordingly, the Pricing mechanisms and the price outlook for Methanol and Urea were reviewed keeping in view the market outlook for these products. The study also covered the technology which GPIC aim to adopt for the CDR Unit. An assessment was carried out of the likely investment costs for the proposed project and its economic evaluation.
The cost benefit analysis of the CDR Project revealed favorable return of 20.6% on the investment of US $ 52 million.
The project did not call for outside expertise. In-house project and operating experience was more than adequate to handle this project and operate the unit. GPIC constituted a team of highly experienced engineers dedicated to this project. The team played a pivotal role in decision making in every aspect of this project.
Invitation to Bid (ITB)
Invitation to Bid documents were prepared in-house by a team of GPIC Engineers. ITB was prepared based on GPIC’s Experience of operations and maintenance of the Ammonia, Methanol and Urea Plants for over 25 years.
Some of the important issues covered in the ITB included:
- Scope of Work
- HAZOP review during development, engineering and implementation of the Project
- Risk assessment of the project
- Environment impact study
- Establishment of SHE management system’s during construction.
ITB was prepared and issued to shortlisted EPC contractors in May 2007.
Project Risk Assessment:
A Project Risk Assessment (PRA) was carried out in July 2007. This was prepared using the “Risk Matrix – Probability versus impact” method.
It was essentially a “Project Execution Risk Register”. The report covered all the possible risks associated with the Project execution. Following are some of the risks which had been identified:
- High EPC cost for the Project
- Regulatory Approvals
- Unclear responsibilities between EPC/ Licenser/ GPIC
- Price Escalation Agreements
- Financial failure of selected EPC
- Financial failure of equipment vendor
- Financial failure of key sub-contractor
- Force Majeure
- Inadequate ITB
- EPC bid non-compliant
- Delays in getting the equipment at site
- Poor quality of equipment/ material
- Transportation of large equipment
- Difficult tie-ins
- Serious accident or emergency on construction works etc.
The majority of the identified risks (43 nos.) were classified under “Low probability with low impact”. There was no risk under “Medium or high probability with high impact” category.
GPIC by carrying out the Risk Assessment assured that CDR Project had no major risks.
Visit of GPIC Board Members to CDR Site, February 2009
Environment Impact Assessment (EIA)
GPIC prepared the Environment Impact Assessment Report (EIAR) for the Carbon Dioxide Recovery (CDR) Project. Since this project was under category B of the World Bank EIA guidelines, full EIA was not required; however environmental analysis was necessary.
Construction Progress-July 2009
The assessment had revealed that this project had a clear positive environmental impact. At its full capacity on 20 December 2009, the CDR plant recovered 450 MTPD of CO2 that was otherwise being vented into the atmosphere. In addition to CO2, the unit also removed 355 kg/day of SOx from the flue gas in the pretreatment section.
Construction Progress-February 2009
It will also enhance the process efficiencies of production of Methanol and Urea, in terms of product per unit of natural gas consumed. In this assessment report, all potential impacts on the environment during the development and operation phase, based on MHI Technology have been identified.
Construction Progress-March 2009
The main aspect of this project is the accidental leakage of chemicals. Study revealed that care should be taken to avoid such spillage during the transporting, handling, storing and use of associated chemicals.
Construction Progress-April 2009
The CDR area has been specially designed to contain any accidental spillage of chemicals. Containment bunds have been provided for all the pumps and a slop tank has been provided for collecting the spillages. The auxiliary units for the running of the CDR unit and in particular the package boiler and the Incinerator are monitored closely, to ensure full compliance with the relevant environmental legislations of the Kingdom of Bahrain.
The waste liquid stream which is not toxic, require no treatment and therefore routed to the sea water return header. The exhausted gases either from CO2 Absorber, Incinerator or the Package Boiler of the CDR Unit, are released to the atmosphere as they meet the Environmental Standards.
The project has a positive socio-economic impact, as it will add to the profitability of GPIC; hence its direct contribution into the National economy.
Construction Progress-July 2009
GPIC took the following decisions to channelize all actions to remain focused for steering the Project:
- Selection of Capacities: GPIC decided to construct a 450 MTPD Plant to match its capacity similar to other recent plants. This allowed contractors to bid for the project on the basis of replicating recent projects elsewhere, reducing the risks associated with the project. The new capacity was compatible with raw materials and space availability.
- Selection of Technology: Based on the technical review of the technology providers, GPIC selected a proven technology taking in to account the efficiency of CO2 absorption as well as reliable operation and maintenance, having minimum environmental impact.
- Project Management: Considering the size of the project, GPIC Management decided to carry out Project management function by the Project Team itself.
- Form of Contract: GPIC after review of various types of contracts, decided to opt for a lump sum turnkey (LSTK) contract with single point responsibility of the EPC contractor. GPIC preferred the LSTK type of contract because GPIC could reasonably estimate the amount of work and risks involved. The progress and the performance etc. could be quantified, measured and demonstrated.
- Project Insurance: It is very important to design an insurance program which mitigates all risks during the project stage, in avoiding loss due to delay in project completion. Without limiting the EPC contractor’s liabilities in the project, we had to arrange for insurance covers to mitigate various risks faced by the organization. GPIC on the advice of the Insurance Consultant’s took the Construction / Erection All Risks Insurance Cover.
The main advantages of the above insurance cover is better control, breadth of coverage, cheaper rates and control over claims recovery.
Signing of Agreement between GPIC, MHI and Tecnimont ICB
GPIC considered the well-known EPC contractors having strong partnership with technology providers and relevant experience with proven record in the business of constructing the CDR Plants to ensure success of the project. The final selection was made based on techno-commercial offer.
Signing of Contract with MHI and TICB, 25th October 2007
Prior to GPIC’s CDR project, MHI had been working with Tecnimont ICB of India who was the EPC contractor for the two CDR plants in India. TICB is an approved MHI EPC subcontractor and is a member of the Tecnimont Group of Italy.
A Memorandum of Understanding (MoU) among the three parties i.e. GPIC, MHI and Tecnimont ICB (TICB) was signed that became an integral part of the Engineering, Procurement and Construction (EPC) Contract between GPIC and TICB.
The objective of this MoU was to clarify each party’s respective obligations with respect to the License Agreement (between GPIC & MHI) and Lump Sum Turn-Key (LSTK) EPC Contract (between GPIC & TICB) for the successful execution of the CDR Project in a smooth and effective manner. The contracts with MHI and TICB were signed on 25 October 2007. The contract schedule was prepared for a ‘fast track’ project (27 Months) to enable GPIC to reap the financial benefits of early production.
The kick-off meeting was held between GPIC and TICB in the presence of MHI in Mumbai during the last week of November 2007, to clear all outstanding commercial and technical queries carried over from the agreement negotiations. In addition, the project co-ordination procedures were discussed and agreed upon.
Implementing through Teamwork
Teamwork is at the heart of everything that GPIC does. The CDR project was no exception and the company ensured proper control of the CDR project through extensive project co-ordination procedures between TICB and GPIC. The development of GPIC Internal quality procedures was another factor that enhanced the project control. One of the key success factors for our CDR initiative was our commitment to implementing an integrated plan between our EPC contractor and the GPIC project team. This approach ensured that our GPIC team was completely involved at all stages of the implementation plan and rollout, as well as guaranteeing that the technical know-how was imparted effectively our team.
Pilling Activities August 2008
The team kept a close monitoring on various activities related to project execution by the EPC contractor on day-to-day basis and developed strategies of “next plan of actions”.
The team reviewed and approved Contractor’s detailed design and engineering documents, participated in Hazop studies, monitored fabrication work of critical equipment, supervising of construction works, commissioning and performance tests.
Inauguration of CDR Construction, 27th August 2008
All basic engineering was carried out at MHI, Japan. The documents were received by GPIC for comments and approval. This was in line with the agreed procedures as it is the only effective method of assuring cross discipline checking and the flow of supplied data into the design.
Detail engineering was completed at TICB Mumbai. TICB carried out the design of all processes, piping, electrical and instrumentation facilities, civil foundations and structures in Mumbai. GPIC’s team of experienced engineers who were dedicated to this project visited TICB’s office’s to streamline all aspects related to this Project.
The visits were made until the team of TICB engineers shifted to Project site in Bahrain. GPIC also deputed Inspection and Mechanical Engineers to monitor the quality control of critical equipment.
GPIC applied more stringent management level controls than is the norm for this type of contract. Generally, in a lump sum contract 'due diligence' style of client management is applied which means relatively few personnel are involved in reviewing selected key documentation. However, in case of the GPIC CDR project, additional experienced Bahraini engineers of all disciplines, together with the Senior Engineers reviewed all drawings and documents.
As CDR project was to be integrated with the existing GPIC complex facilities, it was important to apply more than adequate engineering supervision level by GPIC to meet the required interface with the existing complex. A number of actions were taken to assist in co-ordination of the engineering activities, including the use of regular conference calls and the electronic transfer of data between Japanese, Indian and Bahrain Offices. This helped to greatly improve the speed and accuracy of communications. However, hard copies of correspondence and documents were also transmitted as a permanent record.
GPIC CDR Project Profile
The following list covers the highlights in the implementation of our CDR facility:
- CO2 recovery capacity 450 MTPD
- Flue gas source Methanol reformer flue gas
- Use of CO2 To enhance Methanol production by 120 MTPD
- To enhance Urea production by 80 MTPD
- Project duration 27 months
- Project location West side of Methanol reformer
- Total Cost of the Project
- MHI – Technology Licenses Basic Engineering
- TICB – EPC Contractor
- GPIC - Spares, Insurance Training US $ 52,000,000
- US $ 2,150,000
- US $ 44,850,000
- US $ 5,000,000
Brief Process Description
The CDR Unit is basically a low-pressure CO2 recovery unit in which flue gas from the Methanol Stack at a temperature of 206oC is first quenched with de-mineralised water in a direct contact quencher. Water is supplied to the packed column using structured packing, and then treated with caustic soda to remove the sulphur oxides present in the flue gas. The flue gas is then compressed in a flue gas bowler, and fed to CO2 absorber. The CO2 absorber is a two bed column with structured packing’s. Bottom bed is for CO2 absorption and top bed is for washing of exhaust gases.
KS1 Solution Agreement Signing with MHI, 4th April 2008
In this column, CO2 is absorbed in a special solvent (KS-1), supplied from the top of the absorption section. Flue gas after washing is then exhausted to the atmosphere. Rich solution is regenerated in the regenerator by supplying heat through LP steam reboilers.
Lean solution from the bottom of the regenerator is cooled in the lean solution cooler using cooling water and re-circulated back to the CO2 absorber. Overhead vapours from the regenerator are condensed and separated condensate is returned back to the top of the regenerator. The cooled CO2 is sent to the network.
GPIC CDR Unit is the first project of this capacity to have an integrated incinerator for the treatment and disposal of reclaimed waste generated in the CDR Unit. This was installed as a commitment to the environment to safely dispose of the waste generated from the unit. The incinerator package has been exclusively designed and built by TSKE, Japan to safely dispose of the KS1 containing heat stable salts generated in the CDR unit. MHI have conducted tests and have confirmed that the by-products of combustion from the incinerator are safe for the environment.
Challenges faced in CDR implementation
Transportation of Three Major Columns:
Three major columns for the CDR Project were fabricated at AMC, Malaysia. These columns are ~4.5m in diameter and ~50m in length. To avoid site welding, TICB wanted to bring each of them as single piece. An exclusive cargo ship brought all the three columns to Bahrain. Transporting such huge columns on Bahrain roads was a great task. Exclusive road survey was conducted by specialists to identify the bottleneck areas on the road and with the help of concerned Directorates, all the bottlenecks were overcome and the columns were transported to site safely. This was a major achievement was accomplished with the cooperation of all the concerned Directorates.
Columns Transportation to Site January 2009
Clearance on export of Titanium Exchanger from India:
Export restriction was imposed by Government of India for Titanium Materials for internal security reasons. The critical exchangers were manufactured in India and due to the above restrictions the exchangers were not cleared for export. GPIC had to present the case with the foreign ministry and other officials and could get the clearance ultimately without causing any delay to the project.
Inspection of columns at AMC Malaysia 2008
Installation of Sea water GRE lines in the existing units area:
Installation of sea water lines was a great task. Excavation for burying the pipeline had to be carried out within the vicinity of the existing pipe racks, cables and road crossings. This was a very challenging task. Great care was taken to execute this work with good planning coordination and proper risk assessments. The total work was carried out successfully without any incidents.
GRE Lines Installation, September 2009
Importance of Safety, Health & Environment during CDR Project
Safety culture alignment is not simple when a project involves different contractors with a large work force; it involves people’s values and beliefs, guiding their behaviour and developing and maintaining effective safety at the work place. To achieve “Safety Excellence” we sought a very positive safety culture that added significant financial value to the project and continued work without any delay. It was a huge challenge that consumed a great deal of time and hard work for Safety Personnel including contractors and sub-contractors.
CDR Model Assembled at Training Centre July 2009
To achieve a world-class safety culture in the CDR project, it was vital to develop a safety coordination and understanding between GPIC and the contractors. Early safety statistics clearly identified the need for regular awareness training and safety talks on a daily basis. To strive for ZERO Lost Time Accident, GPIC management recognized the importance of safety in the initial stages itself and provided a dedicated Safety Specialist to the CDR Team. To achieve this goal GPIC put a great deal of effort into making everyone understand GPIC’s Permit to Work, Emergency Procedures and the most import value of “care for others”.
Columns Installation, January 2009
One of the main challenges was to maintain a hazard free work place where dozens of cables for electrical welding machines and air compressors were running everywhere and workers were involved with welding, cutting and fabrication activities. Four cranes and couple of heavy vehicles were also operating in a limited area. Major lifts for installing three columns, boiler and exchanger were carried out safely without any incident. All jobs were discussed regularly; Risk Assessments were carried out to identify smallest possible hazards and was well communicated to all for a smooth and safe operation. All safety inspections, audits, meetings and emergency drills were well recorded and communicated.
Paving Work, September 2009
Finance played an important role in supporting the project by fulfilling its financial obligations, whilst protecting the company interests, thus ensuring the successful completion of the project. To achieve such goal, a cash flow plan was formulated that ensured sustaining the required liquidity and attaining the "zero payment delay” objective. Attaining such goal would have been extremely difficult without preparing an accurate cash flow plan, considering the global recession experienced in early 2009 and thus resulting in a relatively lower cash inflow.
A comprehensive reporting and monitoring system was established that ensured guaranteed availability of the funds as per the contractual agreed terms. The three layered level of cost control reporting ensured that data is available on operational level as well as management control level.
Training & Visits:
GPIC established great emphasis on training of Bahrainis from the project stage itself. Dedicated Engineers from every discipline were involved and were given tasks to review, monitor and report on regular basis. They worked along with TICB Engineers and got exposure of Project work throughout the construction activities.
During the Engineering phase, concerned discipline engineers were greatly involved in reviewing various documents and participating in Hazop studies at TICB offices. Every document was reviewed and comments were communicated regularly with MHI & TICB to ensure all the review comments are addressed.
During the fabrication of critical equipment, GPIC Engineers visited the vendors workshops for quality assurance, quality checks to ensure the fabrication work is to the standards as per the ITP Documents. GPIC Engineers participated in Factory Acceptance Tests (FAT) for DCS System, Boiler, Blower and Motor Control Systems.