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Asset Verification & Spare Parts Optimization Project

At RasGas Company Limited (RasGas)

Authors:
Anton Moore, Material Specialist, ExxonMobil Corp
H. Siahaan, CMRP, Reliability Engineer, RasGas Company Limited
Albert Sijm, CMRP, Head of Reliability Engineering, RasGas Company Limited

Synopsis

Lack of spare parts can have both a significant impact on
maintenance execution as well as plant availability. Low
Preventative Plant Maintenance (PPM) compliance,
excessive stock outs, material obsolesce, wasted time
searching for parts availability or parts information and
higher than required inventory are just some examples of
the impact a poor spare parts management system can
have on day to day operations. Similarly, incomplete or
inaccurate Asset data inside the Computerised
Maintenance Management System (CMMS) leads to
ineffective allocation of resources resulting in wasted time
and effort by many personnel across the whole
organization.
In 2007 RasGas started its journey to review and improve
its spare parts management system. This paper explains
how the Asset Verification and Spare Parts Project was
driven from concept to implementation in one of the
worlds largest Liquefied Natural Gas (LNG) producing
companies. The paper also highlights the major stages
and challenges faced during the execution of the project
including steps taken to ensure sound materials
management practices in the future.
The paper will comprise the following key factors:
1. Why the project was developed and needed
2. Explanation of the key project elements
3. Challenges that arose during the project
4. Results in each of the project elements
5. Project summary and critical success factors

1.0 Introduction to Qatar

Qatar is a peninsula located in the Arabian Gulf,
approximately 11,500 square kilometres in size. It shares
its southern border with Saudi Arabia and United Arab
Emirates. Bahrain and Iran are among other countries
located within 150km of Qatars international boarder. In
1971 exploration engineers discovered natural gas off the
north-east coast of Qatar. The importance of the discovery
was not immediately apparent. Since then however, the
North Field has been confirmed as the largest non-
associated natural gas field in the world with recoverable
reserves of more than 900 trillion standard cubic feet, or
approximately 10 per cent of the worlds known gas
reserves.
To exploit this remarkable field, Ras Laffan Liquefied
Natural Gas Company Limited (RasGas Company Ltd)
was established in 1993 to produce LNG in Qatar. Over
the insuring years, the Company has developed world
class facilities for the extraction, storage, processing and
export of LNG.

2.0 RasGas Business Profile
RasGas is a joint venture between Qatar Petroleum and
ExxonMobil. Key customers are located in South Korea,
India, Italy, Spain, Belgium, Taiwan and the USA. At
present seven LNG trains produce a total of 37 million
tonnes of LNG per annum. Although most of the
Companys operation is concerned with the production of
LNG, other natural resource projects including Helium and
sulphur maximise the use of the liquids extracted from the
North Field. Natural gas is also transported by pipeline
and sold to National utilities within Qatar.
RasGas extracts its natural gas from 93 offshore wells.
This is transported to shore via pipelines, treated and then
liquefied before transportation to markets. RasGas has
shipping facilities in Qatar. The LNG leaves Ras Laffan
port on board Q-Flex or Q-Max LNG tankers, currently the
largest LNG carriers in the world, with capacities of up to
266,000 cubic metres.
Onshore, the Company currently operates 7 LNG trains
and two sales gas trains which supply gas to local
industries.
As well as building onshore and offshore facilities in Qatar,
Qatar Petroleum and its partners are investing in
regasification terminals in customer home countries
around the world. Several facilities have been constructed
in recent years in UK (South Hook, Wales), USA (Golden
Pass Gulf of Mexico) and Italy (Adriatic LNG Terminal).
With the most recent expansion project completed and
commissioned, RasGas has over 260,000 equipments in
CMMS (from a small sensor to a 125 megawatt (MW) gas
turbine) and more than 100,000 Material Master Records.
Together with its sister company Qatar Gas, Qatar is
currently the leading world exporter of LNG with total
production of 77 million tonnes year annum. From a
standing start, RasGas has become one of the worlds
leading producers of LNG.

3.0 Why this project was needed
RasGas mission statement is to develop, produce and sell
hydrocarbons in a safe and environmentally responsible
manner for the welfare of the State of Qatar and the
satisfaction of our customers while maximising
shareholder value. The Company is committed to long
term product reliability. One of RasGas Strategic Choices
is to: Enhance reliability and gas deliverability from
reservoir to delivery point.
To achieve this, obtaining the highest plant reliability is a
must. A reliable operation is a safe operation. Most
companies holding MRO inventory agonize at one time or

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another over the issue of spares parts; From Maintenance
and Operations: do we have enough stock to keep the
plant running at required levels; From Finance and Senior
Management: have we too much capital invested in
inventory levels. RasGas is no different. Implementation of
a spare parts strategy and support for adequate stocking
levels across the entire organization is paramount.
Spare parts have a significant function in supporting a safe
and efficient operation. Availability increases maintenance
efficiency and can reduce Mean Time to Repair. The
shortage or non availability of critical spare parts will have
a direct impact on the plants availability and safety.
Holding surplus or obsolete spares on the other hand ties
up capital that could be used elsewhere. RasGas Spare
Parts motto is: The Right Spares available at the right
time.

Some potential problems that were identified at the time
were:
Whether all assets were recorded in RasGas
CMMS.
Whether Inventory levels in the warehouse were
adequate to keep the LNG plant running at the
uptime required. A high level of work orders were
open pending materials availability.
RasGas Bill of Materials (BOM) concept was based
on vendor Recommended Spare Parts List (RSPL)
for 2 years, rather Complete Spare Parts Lists
(CSPL).
The BOM structure across the different plants
(Trains) was inconsistently applied. For example the
exploded BOM for identical pumps in Train 1 and
Train 5 was often times different.
There was no standard method used to determine
correct stock levels and replenishment. Stock level
adjustments were manually calculated and
uploaded. Typically individual stocking levels for
SKUs were only reviewed when field personnel
requested a change.
The total lead time (Internal and External) for routine
and non routine materials to arrive was excessive in
many cases.
An external audit commissioned in 2007 confirmed most of
the concerns identified above. The audit results were used
to identify weak areas and to scope the project and identify
the project strategy. A baseline was set and the Asset
Verification and Spare Parts optimization Project was
initiated. With two of the seven LNG trains operating for
more than 10 years, the time had come to initiate this
important project.

4.0 Project Overview
The project was divided into five phases:
1. Field Asset Verification. This comprised a walk
down of every plant asset using Plant Layout
drawings and Process & Instrumentation
Drawings (P&IDs). The deliverable was an
updated and verified list of all plant assets
accurately recorded in CMMS following a
consistent Functional Location hierarchy
structure.
2. BOM Revi ew and Standardization. A
comprehensive review and update of all BOMs.
Typical BOMs only included 2 years of operating
spares and not complete parts lists. As some of
the older Trains are more than 10 years old, these
BOMs were often incomplete leading to much
time searching drawings and vendor documents
looking for correct part details.
3. Material Master Cleansing and clean up. This
element included applying standard nomenclature
across all 100,000 Material Masters and adding
missing information vital for purchase of the
spare. This phase also included de-duplicating
existing MM catalogue.
4. Stock Level Optimization. Updated MRP stock
parameters with Max, ROP and Safety Stock
levels identified.
5. Development of a comprehensi ve Spare Parts
Philosophy document approved and
implemented across all affected RasGas
departments: e.g. Manufacturing, Engineering,
Maintenance, Projects, Supply and Purchasing.

Some of the key project metrics were as follows:
260,000 existing Tags (Equipments) in SAP
100,000 existing Material Masters (SKUs)
70,000 Material Masters with stock on hand
17,000 existing BOMs

Figure 1 RasGas Asset Verification and Spare Optimization project overview
















1 Field Asset (Equipment) Verification
2. Bill of Material Review
3. SAP material Master Data clean up
4. Review of Stock Levels
5. RasGas Sparing Philosophy Document
Project Estimated 2 -3 yrs duration
-
-
1 Field Asset (Equipment) Verification
2. Bill of Material Review
3. SAP material Master Data clean up
4. Review of Stock Levels
5. RasGas Sparing Philosophy Document
Project Estimated 2-3 Years Duration
- Outsource to specialized Company
Reliability Target
Equipment Strategies
Integrated Spare Parts Document
Updated CMMS Equipment Master
Increased Plant Reliability
Updated Bill of Materials
Updated Stock Parameters
The Vision:
Right Spares available at the right time
Inputs
Desired Outcome

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5.0 Project Preparation

In 2007 a project charter was developed and approved by
Senior Management across the effected departments
Engineering, Maintenance & Supply (Procurement). This
was essential as CMMS optimization and determination of
correct stock levels contain different areas of expertise
and stakeholders have different interests. For example in
RasGas, CMMS data (Functional Location, Equipment
data details, Equipment strategy information) is controlled
by Maintenance Department. MRP settings and the
upkeep of the Material Master catalogue is controlled by
the Supply Department.
Integration and alignment of new facilities with existing
facilities was an extra challenge for the project team. A
lot of effort, team building and soft skills were required to
align interests across all the affected departments within
the Company.
RasGas also faces the same internal pressures as most
organizations holding large MRO inventory. The
maintenance department typically wants all spares
immediately available and in stock. Finance and Supply
Departments like to run with a lean inventory with a
minimum of spares in stock. To find the right balance
Reliability Engineering, a part of Operations Department,
was assigned to take the lead.
The Charter documented the objectives of the project,
boundaries, team members, roles and responsibilities,
project plan and schedule.
One of the unknowns was how many new equipments
would be found in the plant that needed to be configured
in SAP. To determine the exact scope of the project, a
qualified consultant was invited to audit RasGas CMMS
system, work management, procurement processes and
perform a field audit.
Based on the audit it became easier to define the exact
work scope. Nonetheless there were still several
variables. A decision was made to tender with a fixed
scope of work and include an additional ad-hoc portion
based on price per equipment to cover the additional
scope that was not completely identified. In this way there
was also an incentive created for the Contractor to do an
excellent and thorough job.
Some of the general concerns were confirmed and
quantified in the audit. These included:
Physical asset verification identified inconsistencies
between plant and SAP.
BOM structure was inconsistent. Parent
equipments were not always clearly defined.
Inconsistent process for creating new Functional
Locations, equipment & BOMs, resulting in different
hierarchies across the plant.
Inconsistencies in existing material items
nomenclature.
Duplicate materials.
Delays in current procurement process.
Existing MRP (Inventory Management & Control)
process was not fully functional.
Current spare parts rotatable process was
unstructured and not tightly monitored.
High number of open work orders awaiting
materials; and
Many open Material Reservations against closed
work orders.
The preferred contracting strategy was to award the
contract to one company who could deliver all the
objectives across all the phases. Vendors were
encouraged to form alliances or partnerships where one
element of the project may not have been inside the
services they were experienced or sufficiently competent
with. Due to the project nature, selective companies were
invited to tender.
The Contractor was selected on the following criteria:
A company (or partnership) that could provide the
total solution;
A proven history of safety excellence as majority of
the site work involved work inside a live LNG
plant;
Previous experience in Asset verification and
Spare Parts optimization projects;
Oil & Gas experience;
A Quality Control / Quality Assurance system that
met RasGas standards;
Current workload and ability to complete the
project in the time frame requested;
The quality and experience of the key personnel
actually involved in the day to day execution of the
project; and
The quality of management executives that would
oversee the Project.
During the tender process it appeared that only a few
companies would be able to meet all of the strict RasGas
requirements for this project.
6.0 Field Asset Verification

The objective of this phase of the project was to ensure
that physical assets in the plant were captured in CMMS,
the data inside CMMS was complete and accurate and
the Functional Location hierarchy was consistently
applied across all plants.
6.1 Asset Verification acti vities

This phase was the most challenging and resource
intensive. Continuously a team of 20+ Contractor
personnel was working daily in the plant. Added to this,
RasGas provided a team of multi skilled technicians
across all disciplines (5) and a plant operator. The
contribution of this team to the project in terms of getting
relevant Permits to Work (PTW), finding the maintenance
personnel, assistance in preparing mandatory J ob Safety
Analysis (J SA), assistance in getting the required
documents and leading the QA/QC effort was a key to the
fluent progress and success of this phase of the project.
This was a lesson learned from similar projects. During
the preparation phase, RasGas visited several other
companies. The lack of good communication and an
efficient interface between Contractor and the end user
delayed or contributed to unsuccessful outcomes in other
similar projects in the past.
The methodology followed for the field asset verification
was as follows:
P&IDs were used as a baseline. Field equipment
name plate data was recorded and then compared

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with Functional Locations and Equipment Master
Data recorded in SAP.
The data collected from name plate included Tag
Number, Original Equipment Manufacturer (OEM),
OEM Model number, Serial Number, physical
location, height from ground, scaffolding
requirements for potential future maintenance and
various other information contained on the data
plates (e.g. material composition and sizes for
valves).
Management of Change (MOC) documents that
relate to design modifications, plant drawings or
P&IDs, were captured at the physical verification
stage to ensure these were updated and included
in SAP data.
6.2 Asset Verification Result
Approximately 90,000 new equipments were identified for
inclusion into CMMS. This represents an increase of 25%
compared to the baseline. The chart in figure 2 shows the
breakdown of the total equipment tags at the completion
of Phase 2 of the project. These new equipments consist
predominantly of manual valves, transmitters,
temperature elements, switches and gauges however the
list also included some pumps, motors and relief valves.
All were maintainable equipments that were not
maintained or managed previously in CMMS. It is
probably also safe to assume that no spares or
replacement parts were kept in stock for these assets.
On top of the new tags which were identified as not in
SAP, there was also a small percentage of tags (1%) that
could not be located and 2% which could not be verified
for various reasons (access restraints due to height or
location, shut down required etc).
At the completion of this phase of the project, a uniform
and consistent CMMS data base was updated for all
Functional Locations. This was a big improvement over
the existing structure which had evolved over 10 years of
operations and the subsequent new project interfaces.



Figure 2: Field Asset Verification results

6.3 Asset Verification Challenges
Many of the challenges faced during the course of the
project could be attributed to the Asset Verification phase.
The main challenges were:
Many equipment tags in the plant had missing
name plate or name plates that could not be read
due to corrosion damage or for other reasons. This
was especially true in the old plants such as Train 1
and 2. As part of the project scope, the Contractor
was required to record these equipments with
reference to P&ID. The Contractor was also
required to record the equipment tag that did not
have its RasGas tag plate, so that RasGas could
fabricate new tag plates. The total number of
equipment tags that had missing or corroded name
plates, names plates that were painted over or that
were inaccessible was approximately 70,000.
Accessing equipments that were elevated and not
accessible from ground level was a challenging
activity. For selected equipments, scaffolding was
erected in order to access the name plate details.
The rate of scaffolding erected was not as originally
anticipated. This however was a reality that had to
be acknowledged as there were obviously more
important and critical plant maintenance scaffolding
requirements that had priority. On an average,
scaffolding was erected for 5 or fewer locations
each week. To overcome this, a Scaffolding team
was set up under the Maintenance Department.
Erecting scaffolding is also a very costly exercise
especially when its use was for a very short period
of time (5-10 min). To keep costs to an absolute
minimum for this activity, it is recommended to
investigate alternative means of accessing the
name plate details with either mobile scaffolding or
by using binoculars or other plant friendly
magnifying devices. For this project, scaffolding
was erected in approximately 2,000 different
locations.
Hot weather in the Middle East is a challenge as
summer temperatures can reach over 50 degC.
During summer, plant asset verification started at
04:00am and finished at 09:00am. After this time,
FieldAssetVerificationResults
72%
2%
1%
25%
TagsAvailableinCMMS
Unabletoverify
Unabletolocate
NewTagsIdentified

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the Contractor Engineers would return to the office
to record their results into the master database.
The focus for equipments in the summer months
was on equipment in shaded areas. In winter
months, the focus shifted to outdoor equipment in
open areas, such as the Tank Farm, J etties and the
Port.
To verify equipment in critical packages like
compressors and turbines, the complete unit
needed to be shutdown. It was not justified or
sensible to shutdown major equipment just for
verification purposes. RasGas informed the
Contractor at an early stage about the shutdown
schedule so planned unit or plant shutdowns could
be utilized to the maximum possible extent.
Specialized Shutdown training required for
personnel involved in the verification of these
equipments was organized beforehand.
Nonetheless there was still some equipment that
could not be verified because the shutdown
schedule fell outside the project schedule. This
activity will continue after the project concludes by
RasGas personnel.
RasGas Document Management System (RGDMS)
is very effective and available online to everyone
who has a RasGas login ID. Electronic copies of
documents can be found through different
combinations of search methods. Linking of
documents to their respective Functional Locations
or Equipment can be improved and search time
reduced.
Several equipments identified in the plant were not
listed in the P&ID. The explanation could possibly
be that the existing Management of Change
process (MOC) may not be as robust as it needs to
be. There were on the other hand, functional
locations which could not be located at site but
were configured in SAP. These tags would have
most likely been created from project documents.
Most offshore wellhead platforms are unmanned.
To visit these wellhead platforms, special boat or
helicopter arrangements are required. Wellhead
platform asset verification needed to be aligned
with wellhead planned maintenance work so
Contractor personnel could avail themselves of the
opportunity to visit the required location. Restriction
in offshore bed spaces availability also affected the
number of Contractor personnel that could be
offshore at one time to conduct the field verification.

7.0 BOM Review and Standardization

The objective of this phase of the project was to ensure
that the existing BOMs in SAP were accurate and
complete. Any spare part not included in the existing BOM
or in the material catalogue was added.
7.1 BOM Optimization acti vities
This activity was performed offsite at the Contractors
home office. A team of about 30 engineers were engaged
in reviewing a total of almost 17,000 unique BOMS. The
BOM Optimization phase consisted of the following
activities:
Completeness of the existing BOMs in CMMS was
reviewed and compared to sectional drawings in
the equipment manuals. Further it was also
ensured that identical equipment had identical
BOMs. The initial RasGas BOM concept was based
on vendor RSPL for 2 years, rather complete BOMs
(CSPLs).
Existing BOM structures were reviewed. All existing
Material masters were confirmed as belonging to
the BOM.
Extra attention in the review stage was paid to
materials which were de-linked from the existing
BOM.
For BOMs with incomplete or missing data, the
Contractor used RasGas RGDMS system,
interviewed plant people and finally contacted the
Original Equipment manufacturer (OEM), Original
Construction Manufacturer (OCM) or supplier.
Some items identified in the RasGas Sparing
Philosophy Document do not require a complete
BOM and only require a replacement component.
Identification of part commonality between OCM
and OEM part number.
7.2 BOM Optimization results

At the moment of writing this paper, this phase is 90%
complete. The difficulty remains with equipments where
sectional drawings or required parts breakdown
documentation have not been located.
Based on a Pareto analysis it appeared that the vast
majority of this missing documentation relates to about 50
OEMs. Much effort continues to contact these OEMs and
obtain the necessary documentation. The dedicated
RasGas Technicians assigned to the project are also
being used to try and locate these documents internally. A
and B critical equipments are being targeted first with this
endeavor. Another way to complete the BOM exercise
and reduce the number of floating materials is to look to
previous work orders and Purchase Order history. More
than 30,000 equipment tags have yet to have the BOMs
verified due to missing or incomplete documentation.
Some of the preliminary results for the BOM phase are
that over 4,000 new unique BOMs have been created and
over 55,000 new Material Masters identified for creation.
Also, a standard and consistent BOM structure across all
Plants is now in place. An identical pump installed in both
Train 1 and Train 7 for example will now have the same
BOM structure. This was not the case previously.

From a review perspective, much effort has been placed
to make the BOMs of the highest quality possible. Extra
resources were assigned to this task. For future projects
of this nature it is recommended to take this into account
at the start of the project and include provisions in the
project budget.

7.3 BOM Review Challenges
Supporting document was not available in RGDMS
for a significant amount of cases. For some
packages, spares exist in the BOM without any
document references. Without equipment drawings
and spare part lists, it is almost impossible to
complete the BOM review and standardization. The

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Contractor was required to source any missing or
incomplete information directly from the Original
Equipment Manufacturer however the success rate
for obtaining the missing documentation from either
the OEM or the vendor was disappointingly low.
To smooth the process in contacting vendors,
RasGas provided the last PO number as a
reference to contact OEM or OCM. Further, a
Pareto analysis was performed to focus on the
main OEM/OCM only. Many challenges were faced
by the Contractor in pursuit of the required
documents. Contacting the OEM in many cases
was not the right answer as the OEM supplied the
equipment to a package vendor or Construction
manufacturer and therefore had no record of
RasGas drawing numbers.
In many cases the PO text had insufficient details
to correlate with any equipment.
On top of not always having all the supporting
documents required, there were many cases where
the available documentation was not complete. For
example, if a complete model was not available in
data sheets then only a base model was provided.
Supporting documents didnt always have the
installed quantity noted. There were also many item
description and part number mismatches.
About 25,000 or 30% of the existing Material
Master records were floating in CMMS or in other
words were not attached to any BOM. In all
likelihood, the majority of these items will be
attached to a BOM when the BOM review process
is completed. The Material Masters which are not
attached to any BOMs at the completion of this
phase will be the first candidates to be reviewed for
material obsolesce. It will however be difficult to
completely rule these Materials as obsolete if the
BOM exception list is not narrowed down
significantly.
8.0 Material Cleansing

The objective of this phase of the project was to ensure
there is a consistent taxonomy and nomenclature applied
throughout the existing material catalogue. Material
descriptions were to be improved and all duplicate
material masters eliminated.
8.1 Material Cleansing acti vities
This phase was performed simultaneously with BOM
Optimization with the predominate activity occurring
offsite. Material cleansing began as soon as the materials
were confirmed in the BOMs. A total of 82,000 materials
were identified to be cleansed. The following activities
were performed:
Material items were cleansed. Taxonomy was
reviewed and where necessary standardized.
Material descriptions and supplementary fields were
reviewed.
Maintenance centric text was introduced in the
material items, for example simplified description,
drawing numbers and technical reference numbers
were added.
A download was taken of RasGas Material Master
Table and an analysis was run in the Contractors
own software to identify potential duplicate SKUs.
A review of material types was completed to ensure
material masters are coded and assigned to the
correct material type.
8.2 Material Cleansing results
A surprisingly low number of duplicate SKUs were
identified (approximately 250). This result would appear to
confirm that the process for creation of new SKUs is
working well. There were however a high number of items
that were either rearranged into a standard format or
missing information was added. Many one time
purchasing items (ND items) had missing purchasing
information.
8.3 Material Cleansing challenges:
Parallel updating of material master data by Supply
Department required the Contractor to revisit the
completed material items before final submittal. This
activity could have been avoided if an Asset
Management system was used with direct linkage to
SAP rather than MS Access.
Contractors data spreadsheet contained some
characters, such as the question mark symbol ?, that
are non compatible with RasGas CMMS. The
RasGas Supply Department Material Specialist
needed to verify and correct the data before
uploading into CMMS.
Mismatch between different data sources, for
example: Information available in OCM detail and PO
text manufacturer details were different. Mismatch
between PO text and item header information for
Manufacturer, Part number or Equipment model
number.
9.0 Stock Level Optimization
The objective of this phase of the project is to have The
Right Spares available at the right time to meet the
plants operating and business objectives. Deliverables of
this phase of the project are to determine Maximum,
Minimum (Reorder Level) and Safety Stock Level for all
catalogues material items.
Before any activity was commenced to determine the
required stock levels, a key question needed to be asked;
Does the material item required to be carried in Stock in
the first place? The following factors were considered by
RasGas in determining the answer to this question.
Ensure a thorough check of existing Material Master
catalogue to ensure the required item is not a
duplication or interchangeable with another part.
Check if consignment stock is an option.
Check vendor stocking options.
What is the reliability and speed of delivery in relation
to the requirement need? (i.e. can the item be
supplied with confidence by a local vendor within the
time frame required by Operations?
Check if the item to be replaced can be repaired and
returned to service in a suitable timeframe.
Is substitution or duplication a possibility?

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Can the item be made on site or locally produced?
Is the item available as part of a stocked assembly?
Are failure modes known? Are these failure modes
predictable?
Is Inventory sharing a possibility?
All materials in RasGas are assigned material criticality.
This was based initially entirely on the type of commodity.
To arrive at a final material criticality (which considers
both the initial material classification and the equipment
criticality), the matrix in Figure 3 was developed. This final
material criticality is the value which will be used for
calculating stocking levels. Material criticality is just one of
the inputs to determine required service factor/level.

A EC EC HC MC
B EC HC HC MC
C HC HC MC LC
D MC MC LC LC
A B C D
ExtremeCritical HighCritical MediumCritical LowCritical
Color
Legend
E
x
i
s
t
i
n
g

E
q
u
i
p
m
e
n
t

C
r
i
t
i
c
a
l
i
t
y
ExistingMaterialClassification


Figure 3: RasGas Criticality matrix

Generally, for materials to be in the most critical category,
three elements must exist:
1. Risk. The failure scenario must fall within a
consequence I or II of the RasGas risk matrix.
2. Mitigation. The spare part is required to mitigate
the scenario.
3. Availability. The spare part is not routine. This
means that the material is not readily available off
the shelf from a local supplier.
Materials which have the highest criticality rating must be
reviewed and stewarded closely. KPIs should track the
management performance of these parts highlighting any
specific issues (e.g. stock outs).
Other parameters that were taken into account to
determine minimum stock levels were:
Cost of the item
Mean Time Between Repair (MTBR)
Potential production loss associated with
equipment failure
Supplier delivery time (Existing Company data)
Required service factor/level
Potential environmental and safety impacts
Number of like equipments in the plants (Installed
Base)
Reparability
Previous consumption history
Companys Equipment Maintenance Strategy
Companys Sparing Philosophy
Parts commonality
Shelf life


9.1 Minimum Stock level Acti vities

Software was used to evaluate stock requirement for
capital, critical and normal operating spares inventory.
Contractor developed a list of Capital spares.
Capital spares are repairable items generally used
to replace parts of assets undergoing repair,
refurbishment, maintenance or servicing. These
spares are high cost, long lead time, low demand
but critical to plant operations. Examples include
gas turbine rotor, compressor bundle,
transformers, circuit breakers etc.
Contractor provided a list for all relevant material
items, with Maximum, Minimum (Reorder Level)
and Safety Stock Level. Wherever consumption
history was not available, MTBF approach was
used.
The first two steps are relatively easy. Once all
required information was obtained, the information
was entered into the Contractors in-house
software tool and recommendations were provided.
The difficulty and challenge was with the analysis
and evaluation of all this data. RasGas adopted the
approach that only items where there was a
significant difference between existing minimum
levels and proposed new minimum levels (either
positive or negative) for each SKU was reviewed.
A RasGas cross functional team was set up to
review the Contractors recommendations. The
team consisted of a Reliability Engineer, who
facilitated the meetings, a SME, a Supply
Department representative and a Maintenance
Representative. The review lists were broken down

8/9
by discipline to help with the review and to ensure
the correct personnel were involved in the decision
making process. The teams met as required to
review the proposed stocking levels and come up
with the final stock level recommendations.
9.2 Minimum Stock Level result
Currently at the time of writing this paper, RasGas has
received the Contractors review for Helium and Trains 1
through 5. This accounts for approximately 60% of the
SKUs to be reviewed.
The initial perception prior to the project was that RasGas
was under stocked in many different areas. However from
the initial results received this may well prove to be not
the case. Only 30% of the SKUs have had any
movement within the past four years. This means that
there may well be a high potential for eliminating obsolete
or dead stock. The review has identified as many as 30%
of SKUs should have increased minimum stock levels.
As many as 40% of SKUs on the other hand could have
minimum stock levels reduced. These results will be
reviewed by the cross functional teams over the next few
months.
9.3 Minimum Stock Level challenges
Without doubt, the major challenge faced in this phase of
the project was data quality. Many different variables
influence the ultimate and final stock level figures.
Obtaining key data or suspect critical data was both
time consuming and received mix results. Lead times and
price information were the two key fields that created
most issues.
Parameters with insufficient or erroneous data in SAP
were:
Lead Times (Both internal and external)
Price (typically no price or prices that were older
than five years)
Consumption patterns.
Incorrect Repairable data
MTBF data
Parts criticality
Another challenge was the resources required to review
the recommendations proposed by the software.
Engineers and technicians spend a significant amount of
time on a weekly basis reviewing the results.
10.0 Spare Parts Philosophy
The spare parts philosophy document was developed to
guide the decision making process of personnel across
the entire RasGas organization involved in the
management of spare parts. The purpose of this
document is to:
1. Describe the need for carrying inventory, the
criteria for what items should be held and not
held in inventory and list the responsibilities of
key personnel within the process.
2. Provide guidance on the quantity of stock to
carry and the methodology on how to calculate it.
3. Ensure sound inventory management principles
are followed to guarantee high service
level/inventory turnover rates, limited instances
of stock outs and limited surplus or excess stock.
4. Establish fundamental benchmarking guidelines
in order to make certain the right spare parts are
physically available when they are required to
guarantee safe operation, plant reliability and
smooth maintenance practices.

Furthermore, the document defines the different types of
inventory at RasGas and their subsequent treatment.
The objective of the Spare Parts philosophy document is
to drive quality stocking policies, processes and
execution to:
Prevent excessive purchase of materials
Improve timeliness of availability of materials
Ensure the right spares are available when
required
Reduce the level of obsolescence and write offs
To improved plant reliability and availability
through reduced downtime
11.0 Conclusion & Key Success Factors

If we look back on the three years of the Asset
Verification and Spare Parts Optimization project, many
lessons can be learned. Undoubtedly, the project has
been a valuable experience for the people involved. This
type of project is typically executed infrequently if at all
during the lifetime of a facility.
Phase 1 of the project (Trains 1-5) is nearing completion
and Phase 2 is on budget and on schedule to be
completed by mid 2011. The project has achieved an
excellent safety record without a single recordable injury
or Lost Time Incident.
Some of the key metrics achieved as a result of the
project were as follows:
150,000 on site hours injury and incident free
90,000 additional Equipments uploaded in
CMMS
55,000 additional MMs created
4,000 Unique BOMs developed
50,000 MMs had Stock levels changed (up and
down)
1,500,000 data points added or updated in
CMMS
The following are some of the key success factors that
took the project from an idea through to field
implementation:
Management support. It is vital to have a high-
level sponsor who, throughout the project,
emphasizes its importance to all relevant people.
At RasGas, the sponsors belief and persistence
helped the project surpass its difficult initial
stages. The Sponsor was the Operations
Manager, who reported directly to the Managing
Director
Appropriate resources. A dedicated core staff
and adequate facilities ensured consistent
progress throughout the project. It is
recommended to have succession plans in place

9/9
as no doubt the project will loose some key
people over a period of 3 years.
Committed Contractor. A Contractor that shares
the same vision and expectations was
undoubtedly one of the keys to success. The
Contractor was only happy if RasGas was
happy.
Integrating the Contractor into RasGas way of
life. The Contractor became very self sufficient
once appropriate access to key resources and
business tools was obtained. This was identified
in the early stages of the project.
Quality resources. This was a labour intensive
project and the results were only as good as the
effort (both internal and external) that was
invested.
Phasing of project. This enabled small
celebrations each time minor milestones were
achieved and kept the team and stakeholders
happy and enthusiastic all the way.
Contracting Strategy. RasGas adopted the
approach of In-house management and
outsourced execution. Using this strategy,
RasGas experience was embedded into the
project and ensured the quality that was
expected. Lessons learnt from previous
Contractor experience was utilized to the full.
A close relationship with the Contractor was key.
Re-work was kept to a minimum but when it was
required, the costs were shared so there was a
win-win situation for both the Contractor and
RasGas. RasGas personnel were open to
suggestions and ideas on project execution from
the beginning.
Business controls. Business controls are
essential for this type of project, which may be
huge in size and spread over multiple years.
Without a continuous focus on business controls,
this project would not have come to a successful
end.

Success seemed distant at the beginning of the project,
but by pursuing excellence, it came within our reach. In
spite of all the unexpected obstacles, the RasGas Asset
Verification and Spares Optimization project is close to
completion, achieving a remarkable result that will
position RasGas in the future with the realization of its
mission.

1
Business & Management; Track 1
Asset Verification & Spare
Parts Optimization Project

By,
Anton Moore
RasGas Company Limited

Qatar & RasGas

Project Overview

Project Journey
Challenges
Solutions
Achievements

Key Success Factors

Agenda

State of Qatar
Peninsula of 11,500 km
2

Located in Persian Gulf

Borders Saudi Arabia,
Bahrain & UAE

3
rd
largest reserves of
LNG in the World

Leader in LNG Industry
Milwaukee
Doha
7
1
0
0
M
ile
s


The North Field
Worlds Largest Natural Gas
Field

Covers 5,000 km
2

Gas reserves of 900 trillion
standard cubic ft

93 Offshore wells

Gas transported onshore via
pipeline

RasGas Company Limited
Facilities for Extraction, Storage, Processing & Export

Fleet of Q-Flex & Q-Max LNG Tankers

Key Customers in Korea, India, Italy, Spain, Belgium,
Taiwan and USA

Employees from 56+ Nationalities

Liquefied Natural Gas (LNG)
Natural Gas becomes Liquid
at 260 F

LNG is odourless, non toxic,
non corrosive liquid

LNG occupies 1/600
th
the
volume of Natural Gas

LNG burns more cleanly
than oil and coal


RasGas Plant, Ras Laffan, Qatar
7 LNG Trains
2 Domestic Gas Trains
1 Helium Plant

CMMS Profile
260,000 Equipment Tags

17,000 Unique BOMs

100,000 Material Masters

70,000 MMs with SOH

SAP & Meridium EAM
Systems


Integrated Asset Management Model
Reliability Leadership
Operator Care
Plan
Asset Verification
CMMS Optimization
Equipment
Strategy
Spares
Optimization
Maintenance
Plan
Duty Standby
Plan
Spares
Preservation
Plan
Execution

Reliability Optimization
Leading Indicators
Bad Actor Elimination
RCFA


There were Concerns
Not all assets in CMMS

BOMs not accurate or Consistent

Inventory levels never seem right

Too many stock outs

Too many Open Work Orders waiting for
Materials

RQ to receipt takes too long

No Integrated Spares Philosophy
Document
Sound Familiar??


Project Description
1 Field Asset (Equipment) Verification
2. Bill of Material Review
3. SAP material Master Data clean up
4. Review of Stock Levels
5. RasGas Sparing Philosophy Document

Project Estimated 2-3 yrs duration
- Resource intensive
- Outsource to specialized Company

1 Field Asset (Equipment) Verification
2. Bill of Material Review
3. SAP material Master Data clean up
4. Review of Stock Levels
5. RasGas Sparing Philosophy Document

Project Estimated 2-3 yrs duration
- Resource intensive
- Outsource to specialized Company

Reliability
Target
Equipment
Strategies
Integrated Spare
Parts Philosophy
Document
Updated SAP
Equipment Master
Increased Plant
Reliability
Updated Bill of
Materials
Updated Stock
Parameters
(Minimum Stock)
The Vision:
Right Spares available at the right time
Input
Desired Outcome

Preparation
Independent External Audit
Project Charter Developed
Charter Agreed & Signed by
Cross-Departmental Senior Management
Development of Partnerships
Project Scope of Work developed

But there were Challenges
How much would this project cost?
Resources Everyone already had a day job
CMMS/MM data not always available

1. Field Asset Verification
Methodology
Physically check all equipment in the plant
Collect Name Plate details
Also collect other useful Maintenance data
P&IDs used as reference and starting point
Results of Field work cross-checked with SAP
Company Technicians assigned full-time
Field Unit Operators used for unable to locate
Equipments


Field Asset Verification Challenges
Missing name Plates
Corroded or damaged name plates
Hot weather
Some Equipments not accessible
Some Equipments cannot be verified unless
shutdown
Equipments at height; required scaffolding
Offshore Wellhead Platform schedule
P&ID not always updated



Field Asset Verification Results
90,000 Additional Equipments Added
All Maintainable Equipment
Majority C&D Critical
Low rate of Unable to locate Tags (0.8%)
Some Duplicate Tags identified (1,200)
Scaffolding erected for Approx 2,000 Tags
2% of Tags could not be verified
Over 1,500,000 data points added or updated in
CMMS

2. BOM Review & Standardization
BOMs inconsistent across different trains
Review BOM completeness, compare SAP and cross
sectional and other drawings
CSPL vs. RSPL
Identify Parts Commonality

BOM Review Challenges
Most BOMs were 2yrs Operating spares and not
life cycle parts
Not all Documents and drawings available
Difficulties getting Equipment data from OEM
Many MMs Floating and not attached to BOM
Supporting documents not always with installed Qtys
Vendor master not updated for some OEMs
Original purchase not always with OEM


BOM Review Results
4,000 Unique BOMs created
70% of existing BOMs updated
55,000 new Material Masters created
Un-linked Materials identified for Obsolesce review



3. Data Clean Up in SAP
Duplicate MMs identified and removed
Material Descriptions updated & standardized
Short Text
PO Text
Maintenance Centric Text added

And the Challenges
Data constantly changing
PO Text rules changed leading to rework
PO Text with incomplete details

4. Stock Level Optimization
Required to ensure Minimum Spares needed to
support critical plant equipment
Contractor Software
SAP & Non SAP data
Consumption & MTBF based Analysis
Results reviewed by SME's
Across Departments: Engineering, Maintenance
& Supply
Criticality Matrix developed

Criticality Matrix
A EC EC HC MC
B EC HC HC MC
C HC HC MC LC
D MC MC LC LC
A B C D
Extreme Critical High Critical Medium Critical Low Critical
Color
Legend
E
x
i
s
t
i
n
g

E
q
u
i
p
m
e
n
t

C
r
i
t
i
c
a
l
i
t
y
Existing Material Classification

Stock Level Review Challenges
Insufficient/Incorrect SAP data
Consumption Patterns
Lead Times
Prices
Repair Costs
MTBF Data
Parts Criticality
Results require significant effort to analyse
Engaging SMEs to take responsibility
Cross Functional responsibility & turf war
Funding for new items identified

Stock Level Optimization Results
For MMs with Previous Consumption History

23% of MMs Increase to Minimum Stock level
16% of MMs No Change
61% of MMs Reduction in Minimum Stock level
For MMs with No Previous Consumption

42% of MMs Increase to Minimum Stock level
28% of MMs No Change
29% of MMs Reduction in Minimum Stock level



Overall

36% of MMs Increase to Minimum Stock level
24% of MMs No Change
40% of MMs Reduction in Minimum Stock
Stock Level Optimization Results


Roles & Responsibilities
Use of OEM Vs Non OEM
Material Definitions
Inventory decision process
Stock Optimization & MRP
Specific material strategies
Signed off by
Maintenance Management
Engineering Management
Purchasing Management
Warehouse Management
5. Spare Parts Philosophy Document

RasGas Company Limited
___________________________________


Spare Parts Philosophy
Document



August 2010
Rev 1.0
______________________



150,000 On Site Hours with No Safety Incident
Project on Budget
Project Creep 25% extra work
90,000 additional equipments uploaded in CMMS
55,000 additional MMs created
4,000 Unique BOMs developed
Over 1,500,000 data points added/updated in CMMS
50,000 MMs had Stock Levels changed

Summary


Management Support & Commitment
Resourcing; Internal & External
Committed Contractor
Integration of Contractor into RasGas Daily Life
Internal Partnerships
Shared Vision
Contracting strategy

and lots of Persistence
Key Success Factors


Purchase of Identified spares
Removal/Disposal of obsolete Inventory
Continue with cultural change
Teamwork/Partnerships
Shared responsibilities
Communication with Asset Teams
Imbed learning's into base business
Identification of Inventory Optimization Tool

Next steps

29

RasGas Company Limited 2010
www.rasgas.com
Thank You. Questions?