Valero Energy's Lubrication Transformation

Valero Energy’s 950-acre refinery in Paulsboro, N.J., was preoccupied, busy, absorbed with its primary task of converting more than 175,000 barrels of sour crude oil every day into polished lubricant base-stocks, liquefied petroleum gases, gasolines, jet fuels, mid-distillate products, asphalt, petroleum coke and molten sulfur. The management mantra “nothing is wasted from a barrel of crude” was established to underscore the business goals of efficiency, productivity and profitability.

Valero paid great attention to the oil products being refined and then sold by the company. However, opportunities existed to upgrade the refinery’s system for purchasing, storing and dispensing oil products for use in production equipment at the site.

“Each (operations department) operating unit was previously responsible for inventorying, ordering and storing their own oil,” says senior reliability engineer Steve Immordino.

This resulted in excess inventories and poor storage conditions, which contributed to equipment reliability problems. As is common at many refining and processing sites, the Paulsboro plant stationed some of its drums of lubricating oils outside in holding and dispensing areas.

Tom Gaskill, a machinist who has worked 38 years at the refinery, states: “Without controlled storage conditions, the rotating equipment suffers, as the oil continues to be exposed – to water and contaminants – before it ever goes into a piece of rotating equipment.”

Contaminated oil poured into production equipment can negatively affect component productivity, health and life. Bearings and seals can be impacted, which in turn can impact pumps and pump systems.

When contamination was identified ahead of time, Valero incurred additional costs to have an outside entity and/or its own personnel dewater, filter or properly dispose drums of such oil.

“We saw the need to address pump reliability, cleanliness and safety, and consolidation and cost reconfiguration,” says maintenance superintendent Matt DiGiacomo. “Those were the targets that we have addressed over the past two years. This is a work in progress, but the results have been significant.”

Taking Control of the Situation

The refinery created the position of lubrication improvement leader in the spring of 2007 after seeing lube management as an area to improve. This person would be 100 percent focused on formulating game plans for equipment lubrication and serve as the point person for internal and external contacts. Gaskill, a specialist in troubleshooting rotating equipment, was chosen for this job.

“I welcomed the challenge,” says Gaskill. “I knew this would be difficult, but I enjoy solving difficult problems. I told management, ‘I know where our problems are. I have seen them first hand.’ I asked my supervisor, ‘Where do you want me to go with this?’ He said he wanted to give me the autonomy to decide how to proceed.”

The first step was oil consolidation. The Valero plant in Paulsboro needed to consolidate its lubrication requirements and minimize the number of oils that it handled. On December 5, 2007, Gaskill began a feasibility study with a cross-functional team comprised of Valero reliability engineers and representatives from ExxonMobil (technical sales and product engineering) and the site’s lubricants distributor to identify types and grades of lubricants that could be removed or replaced based on redundancy or specific application.

“Every piece of equipment was studied to see if a change was possible or not,” he says. “We examined what the process was, what was required from a lubricant perspective and what oil was presently used.”

By July 2008, the overall inventory requirements were reduced from 27 different lubricating oils down to 14. The efforts elicited an immediate and annual cost savings of $140,000. That figure is based on past volume of purchase. With better control of lubricant procurement and consumption, that figure will increase in 2010 and beyond.

Valero lubrication improvement leader Tom Gaskill (left) and ExxonMobil sales executive Chris van Skoik examine filtration systems on in-use oil drums.

The next task was procurement.

Gaskill brought together a team that set up a vendor-managed inventory and just-in-time (JIT) delivery system with a lubricants distributor located 15 minutes from the refinery. No longer would an extensive turnaround time necessitate bulk purchase of drums. The distributor holds stock at its warehouse for Valero until it is required. A company representative visits twice a week to assess needs. Oil, grease, absorbent pads and lint-free towels are all inventoried.

Shedding Light on a Solution

An adjunct to consolidation and procurement was storage. Valero could reduce inventory and buy only as needed, but if the Paulsboro site didn’t change the manner in which it stationed and drew from its drums, the efforts never would be maximized.

Oil transfer containers and backup oil drums are among the products that are neatly arranged and ready for use in a lubrication storage shed.

Because of the extreme conditions present throughout the year in the northeastern part of the United States, the refinery needed a concept that would allow a controlled environment for storing lubricants.

“We needed a lasting solution,” he says. “We had to promise to management that the money we were going to spend would be sufficient. We couldn’t come back in 10 years and ask for more money to replace what we had built. The equipment we were going to put in place had to last.”

Doing some research, Gaskill found the solution: a fiberglass-body, steel-reinforced shed made exclusively for lubricant storage by an Ontario-based company. The shed design included a grated floor with the ability to contain spilled fluids and configurability allowing for lighting, electricity and complete climate control. Before placing an order, he and a project consultant from Valero drove to Maryland in January 2008 to see a shed in use at a school district’s fleet maintenance yard. “We wanted to physically put our hands on the product before making the final decision,” he says.

An outside look at one of the lubrication storage sheds that are located on the Valero Energy refinery grounds in Paulsboro, N.J.

Gaskill and members of the lubrication team opted for 12 sheds that would handle the specific needs and inventory of 12 refinery process areas spread out around the property. Existing facilities would house lubricants for the refinery’s other two process areas.

The size of each shed was determined following the consolidation and JIT work. Sheds would be either 12 feet wide by 14 feet long by 10 feet high or 12 x 12 x 10. They would be laid out to handle six in-use 55-gallon oil drums and a backup drum for each, plus several five-gallon pails for lesser-used oils. Grease cartridges, grease guns, cleaners/degreasers, sorbents and shop towels also would be stored on shelving units.

“I made sure that the operators and maintenance crew in an area would have everything that they needed and nothing else,” says Gaskill. “The sheds weren’t to be used to store anything other than items related to lubrication.” (Regular audits would ensure compliance.)

The first shed was installed and fully operational in August 2009. By the end of November, five additional sheds were placed and the two existing facilities were remodeled and made functional.

“Winter is here, but we have put our available oil in a controlled temperature environment,” says Immordino, noting that the temperature ranges between 75 and 80 degrees Fahrenheit.

A Valero employee dispenses oil from a color-coded spigot into a transfer container.

Taking it to the Next Level

Prior to purchase, the shed strategy was centered on storage, but it would evolve into something more in-depth. Speaking with representatives from Valero’s refinery in Port Arthur, Texas (the 2007 winner of the International Council for Machinery Lubrication’s John R. Battle Award for Excellence in Machinery Lubrication), Gaskill latched onto the philosophy of “Clean, Dry, Right”.

• Clean = the oil has no contaminants

• Dry = the oil has no water

• Right = the right oil is used in the right equipment

“If you incorporate that into your plan, everything else will fall into place,” he says.

As a result, funding was obtained to purchase bypass filtration systems. These were installed for all in-use drums in every shed (37 filtration units were in place by mid-November). Drums coming into the refinery have a cleanliness level of approximately 22 microns. Running continuously, the filtration system brings that level down to 1 micron or less in seven days. While 22 microns by no means constitutes “dirty” oil, super-cleanliness enables envelope-pushing performance in mechanical systems that have very tight tolerances, such as those associated with gas and steam turbines.

Inside a lube shed, a color-coded wall chart tells operators and technicians what equipment receives what type of oil.

Desiccant breathers are placed on in-service drums to absorb moisture.

A color-code scheme addresses the “right” portion. A wall chart displays three columns: a piece of equipment in the area, the particular lubricant that it requires and the color code for that lubricant. For instance, 60-K-7A motors in the H2 plant require DTE 10 EXCEL 68 lubricant; the code for that lube is orange. The operator or maintenance technician takes an orange-labeled lubricant transfer container off a shelf in the shed and finds the orange-balled spigot on the lube-dispensing bar. That draws clean, dry, filtered oil from the DTE 10 EXCEL 68 drum.

While the system is sound, Noria Corporation was hired to provide additional training to operators and techs on lubrication and oil sampling fundamentals.

“Training and constant communication is important to lasting success,” he says. “This isn’t something where we build it, hand it over to them and then turn our back. It is important to me and everyone else that, when all is said and done, this is a best-in-class solution.”

A closed oil system is installed on a piece of rotating equipment at the Valero refinery.

Return on Hefty Investment

This lubrication improvement initiative is an evergreen process, so feedback is constantly sought in order to improve it over time.

“I have been surprised and pleased how well this is being accepted. Ninety-five percent of the time, the process is being followed to the letter in the areas where we have made changes,” Gaskill says.

Maintenance supervisor DiGiacomo knows why.

“The investments that the company has made (more than $500,000 to date) show that we are serious and we care about what we are putting into the equipment,” he says. “If we care that much to make that commitment, then it must be important.”

The maintenance and reliability department is showing the company a return on its high-level investment.

• Mean time between repairs for the plant’s 1,300-plus production pumps has increased to 48 months, and the goal over the next few years is to push that to between 60 and 66 months. “If we can simply improve our bearing-related failures by 15 percent, we will have paid for the investment,” says DiGiacomo.
• Plant availability is approaching 98 percent, an impressive figure for a refining plant.
• The “Clean, Dry, Right” philosophy has reduced slip/fall and environmental hazards, and more ergonomic-friendly tools for handling drums and pails have led to fewer injuries.
• And, consolidation and procurement practices have reduced the total spend on lubricants. “We now track costs for the oil we are using,” says Gaskill. “I anticipate a significant cost savings in addition to the initial $140,000 per year in savings.”

Lubrication leader Tom Gaskill (right) goes over lube reports with senior reliability engineer Steve Immordino (left) and maintenance superintendent Matt DiGiacomo.

Further Refinement

While this is all good, there is still plenty of work to be done. The new strategy is in place in the north half of the refinery.

“Change is coming to the rest of the refinery,” says Immordino. “We’ve gone too far to turn back.”

One by one, the six south-end sheds will be installed in the near future.

“Overall, I think we are at a grade B right now because we are halfway done,” he says. “We have to stay the course and keep pushing. What we have put in place is a good plan.”

Extra steps in the plan include attempts at a further consolidation in lubrication oils from the current 14 to perhaps as few as 10 and further refinements to shed installation (savings are possible by having the shed manufacturer install all of the electrical and heating components).

The goal was (and is) to make this a lasting solution. The Paulsboro refinery is committed to seeing this through.

Outside the reliability office building at the Valero refinery in New Jersey.

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