Plant Decommissioning- How to decontaminate, dismantle and decommission process plants

Executive Summary

The current economic and socio-political environment has made product lifecycles of chemicals much shorter. Also cost pressures, regulatory pressures, influence of non-state actors and changing market geographies, mean that manufacturing plants (examples are chemical process plants, Oil & Gas facilities, hydrocarbon processing plants and similar) need to be shuffled around, shut down or shifted at a much higher frequency than in earlier years. This article is a primer on how company managements can handle this without getting overwhelmed by the complexities of these projects. This can happen because quite a few company managements may be very skilled and versatile when setting up new plants, but may be inexperienced while doing the reverse.

Why decommission?

There has been a change in the economic environment in the world due to various factors such as technological advancement in communications, transport and policies of states such as low entry tariffs, encouragement for foreign direct investment, tax incentives, etc. The product life cycle undergoes a change when an external environment changes. If we look at events in the last few years, it becomes clear that the economic boom and bust cycle happens much faster, unlike in the past, where plants could adjust to the environment over a period of a decade or so. In the present economic climate, there are several times when plants need to be decommissioned. It could be because of technological obsolescence, or due to various regulatory, taxation or cost pressures, or even due to pressures from third parties. Such a situation may also arise due to a buy-out, or due to change in the market geography. In all these cases, there is a need to decommission an existing plant. The fixed assets need to be utilized for alternate products or simply disposed off to recover part of the investment. Alternatively, they can be relocated to a new place, to set up a new facility, which may be geographically, even several thousands of miles away. Typical examples would be of a plant that may be sold off in the US to a Chinese company and the new owner may want to shift it from North America to China. Or an Indian entrepreneur may want to shift a plant from a congested urban location, to a new industrial area in another state. While we have always heard of these cases, the fact is that the frequency of these events happening has increased and will continue to increase as the economy becomes more and more fast-changing and globally integrated.

The common thread amongst all these cases is that a plant (or plants) is to be decommissioned.

Decommissioning a plant in the chemical, pharmaceutical, hydrocarbon processing and similar industries is much more challenging, than other in sectors like engineering or automobile, because of the nature of the chemicals handled in such plants. Many of these may be explosive, toxic or in other ways harmful to the environment. In these plants, where chemicals are toxic, explosive, or corrosive, a sound methodology is needed. This article presents such a methodology.

Plant Decommisioning

Where do we start?

Once it is clear that there is a need to decommission the plant, the first stage is estimation of costs. Be aware that many of the garden variety of consultants, contractors and others are very familiar with erection and commissioning costs, but may not be completely at ease with estimating decommissioning costs. So think about getting some help from people who either specialize in these activities, or have a couple of such completed jobs under their belt, to get the best results.


In case this is not done properly, some unfortunate incidents may occur, for which normally company managements are held liable for prosecution, by the authorities. Hazard and Operational Study is an excellent risk assessment tool that can be used in any stage of a plant's lifecycle, including decommissioning. To know more about it, please download or access online our  e-learning course.

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Internal support from various departments

The decommissioning project should involve members from other departments too, whose expertise would be necessary in carrying out the project. These are people from Finance & Accounting, Taxation, Purchasing, IT and HR who would be helping the core team from Production/Plant Operations, Engineering/Maintenance & Safety / Environmental services, to complete the project. Involving the corporate audit team is also recommended since a lot of asset disposal, asset modifications, scrap sales and so on are involved. The site administration team is also important since these people will be getting the necessary permissions from regulatory authorities, tax authorities and local communities who may be adversely affected by the shifting.

Conclusion

As can be seen from above, the decommissioning process for a manufacturing plant or a site is complex in nature; it is not a simple "demolish and exit" job. Hence, a structured approach is essential for success. However, each decommissioning may have certain unique features that require special procedures to be developed. It is a good idea to get help from experts (who have plant decommissioning expertise) wherever necessary. The project can be as complex (or even more so), as compared to setting up a new plant or facility.

Need help with Decontamination, Decommissioning or related stuff?

Abhisam's Subject matter experts on Decontamination, Decommissioning and Disposal can help you understand the process, help you with estimation of costs, guide you in creating your own project management plan and lead it too! Abhisam's experts have more than a hundred man years expertise between them, in process plants of all sizes and have extensively worked in Decontamination, Decommissioning, Dismantling, Disposal and/or plant relocation services, taking all environmental standards, rules and regulations into account. Get in touch with us today for help! We are there for you.

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You do need to carry out a HAZOP Study, even during the decommissioning process! Are your people trained for this? If not, simply take our HAZOP e-learning course now and get Certified too!

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