The Impact of the Use of International Standards on Projects and Their Assets

Gary Napier and Mario Dona

International Standards for the Oil and Gas Industry

Drivers

Drivers for the adoption and use of international standards:• Greater access to international markets for supply of oilfield equipment

and services.• Optimum international standardisation results in –

• Continual improvement in equipment and systems,• Enhanced safety, operability, reliability and fitness for purpose of

equipment and systems,• Improved cost effectiveness,• Common understanding of expectations and requirements.

Relevance of International Standards to the Australian Oil & Gas Industry (1)

• Australia like USA, Canada, UK, South Africa, NZ and other participants in the development and harmonisation of international standards, isstandardising with the international community and adopting ISO, IEC and other international standards.

• To date this process however is preceded by adapting such international standards to Australian terminology, references and conditions.

• Direct use of international standards will bypass this adaptation phase with potential impacts on users as summarised below.

• Some of these will translate into benefits and advantages to the project and/or asset, and others will translate to disadvantages and issues for the project and/or asset.

ADOPTION vs ADAPTATION

Relevance (2)

• The greatest wealth of experienced based knowledge and information resides in international standards and in particular those born out of industry based standards of the most experienced communities, especially the likes of API which are accepted worldwide by default as international standards.

• It is important that when the international community developingstandards adopts the likes of API and adapts them to ISO format that the technical experience based content is not compromised.

Relevance (3)

• It is equally important that in adopting international standards such as ISO and IEC that national users such as Australia do not compromise the intrinsic value of such standards.

The Impact of the Application of International Standards in the Australian Oil & Gas Industry (1)

• Cost (additions or savings)• Time (increase or reduction)• Dependability (personnel

familiarity, training requirements, etc)

• Scope (design and supply, installation, operations and maintenance - these need to be set in context of Australian installation conditions)

• Approvals (stakeholders, regulators, insurers, etc)

The Impact of the Application of International Standards in the Australian Oil & Gas Industry (2)

• Safety (proven in service however similar personnel issues as above)

• Competencies (personnel familiarity and training as above)

• Documentation (standardised internationally but is this consistent with standards used in Australia - will need familiarisation)

• Management of expectations (purchasers and suppliers - will they be on the same page -international suppliers may be, but what of Australian?)

Advantages to the Project of the Use of International Standards (1)

• The likes of ISO, API, IEC, DNV and ABS, amongst others, bring the greater breadth and depth of experience of a particular industry to bear on the project, in the design phase flowing through to procurement, fabrication, installation and operations and maintenance.

Advantages to the Project of the Use of International Standards (2)

• Such standards have the potential to curb costs as a result of opening the door to the international range of products, equipment, systems and services. In other words the suppliers are more likely to more readily understand and comply with international standards and therefore respond to enquiries, as well as their being quite simply more suppliers with more services, systems and equipment on offer than in the national environment.

Advantages to the Project of the Use of International Standards (3)

• International standards also have the potential to optimise project schedules and minimise critical paths due to standardisation of products, systems and services, and their availability.

Advantages to the Asset of the Use of International Standards (1)

• The use of international standards is likely to improve ongoing availability of parts and service support. Suppliers to the international community will have a greater commitment to meet the larger community of users and therefore products are likely to stay in the market for longer with a greater depth of support service available.

Advantages to the Asset of the Use of International Standards (2)

• Products, systems and services developed and marketed to international standards in the international arena are likely to benefit more from continual product improvement and development fed by the broader international installation base.

Disadvantages to the Project of the Use of International Standards (1)

• Obtaining regulatory approvals for equipment and installations based on international standards may take longer to achieve where regulators are more familiar with Australian standards for such, or are committed to an ongoing regulatory approval framework predicated on the use of Australian standards.

Disadvantages to the Project of the Use of International Standards (2)

• Similarly obtaining endorsement by insurers may be more difficult for installations based on international standards. The Insurers Council of Australia publishes their ready recognition and acceptance of products, equipment and installations which conform to Australian standards and therefore there may be a time and cost premium to consider.

Disadvantages to the Project of the Use of International Standards (3)

• The use of international standards may require the need to overcome gaps in familiarity and competency with international standards by designers, engineers and installers more familiar with Australian standards.

Disadvantages to the Asset of the Use of International Standards (1)

• The use of equipment manufactured to international standards is most likely to result in equipment and parts manufactured overseas requiring to be imported. There is a potential exposure to variations in currency exchange rates and tariffs which may be unbudgeted.

Disadvantages to the Asset of the Use of International Standards (2)

• There may be long term ongoing risks associated with legacy equipment in older Australian facilities based on international standards. These risks may include changes to codes and regulations concerning the ongoing use and maintenance of such equipment, which could result in unforeseen costs and time to address during the maintenance life cycle of the asset.

• As with design and installation, the use of international standards may again require bridging competency gaps for maintenance personnel.

Questions in the Open Arena Concerning the Use of International Standards (1)

• Q - Why are there differences in the standards systems used onshore and offshore?

• A - Connection to the supply (electricity, gas, etc) may drive onshore regulatory approval frameworks whereas offshore resource developers and producers are also the generators of electricity and the suppliers of their own gas.

• A - Availability of relevant Australian standards to the marine industry is considerably more restricted than either availability of international marine standards or Australian onshore standards. Accordingly offshore regulatory frameworks such as P(SL)A and their Schedule of Requirements specify the use of APIs for marine structures, platforms, helidecks and the like.

• A - Availability of products, equipment, systems and services to the offshore industry is more restricted than for the onshore industry.

Questions commonly posed in the open arena which may or may not have answers but are generated as a result, include:

Questions in the Open Arena Concerning the Use of International Standards (2)

• Q - Why is there such a difference in the weighting of standards between different disciplines?

Questions in the Open Arena Concerning the Use of International Standards (3)

• A - In Australia this is most evident in the electrical and electronics industries which when applied to offshore and onshore oil and gas facilities appear to have vastly more standards than their mechanical counterparts. This is possibly driven by the maturity and establishment of international standards groups such as IEEE and the IEC, and the greater degree of acceptance they achieve in the Australian community. The development and use of mechanical standards for the oil and gas industry, by contrast, are some years behind the electrical industry.

Questions in the Open Arena Concerning the Use of International Standards (4)

• A - This in fact translates to one significant advantage in adopting international standards. International standards apply to all disciplines in a far more even handed manner. There are proportionately more codes, standards and recommended practices for structural, mechanical and piping, than for electrical, controls and instrumentation in the likes of the ANSI/API standards.

Questions in the Open Arena Concerning the Use of International Standards (5)

• Q – As international standards such as API* are readily accepted byAustralian regulators, insurers and producers of oil and gas in the offshore industry for the likes of structural, mechanical and non-electrical equipment, why is there resistance to the acceptance of the electrical codes and standards from the same suites, ie API, specifically API RP 14F, API RP 14G, etc?

* Acknowledging that API is in fact an ANSI national standard accepted by default as international.

• A - This is probably because most electrical practitioners’experience is onshore in Australia whereas their mechanical counterparts have offshore experience overseas where APIs are accepted without question.

Questions in the Open Arena Concerning the Use of International Standards (6)

• A - Australian standards were never intended for use offshore and the preponderance of detail is clearly based on onshore domestic, commercial and industrial installations. In the fullness of time one should expect to see references in the Australian standards to the use of API*, after all this already exists in hazardous area classification, the Australian standards for which cite their acceptance of API RP 500 (API RP 505) and IP 15, and pipeline and piping codes which cite their acceptance of ANSI B31.3, ANSI B16.5, etc.

• NB – The anomaly of acceptance of international standards is very clearly evident in the apparent side by side use of NFPA 20 and AS 2941 for fire pumps. The latter adds no value to the NFPA & in any event most fire pumps are manufactured worldwide to NFPA 20.

* Acknowledging that API is in fact an ANSI national standard accepted by default as international.

Questions in the Open Arena Concerning the Use of International Standards (7)

• Q - What is the international standards community doing to ratify the adoption of ANSI and API standards as formal international standards?

• A - ISO is currently incorporating APIs and promoting them to the offshore oil and gas community.

• A - The IEC have designated committees and liaison representatives bridging between the groups developing standards for onshore industry, such as TC31 committees, and the groups developing standards for offshore industry, such as TC18 committees.