MEGlobal prepares for start-up of US EG project

Author: Al Greenwood

2019/08/22

Kuwait-based EQUATE Group subsidiary MEGlobal’s 750,000 tonne/year ethylene glycol (EG) project in Oyster Creek, Texas, US is on track for mechanical completion by early September 2019.

“The plant should be mechanically complete in early September, and we are expecting product availability in November,” said Clarence Stadlwieser, global operations excellence director at MEGlobal, in an interview with ICIS.

The project - MEGlobal’s first in the US and being built by US-based Fluor as the main unit construction contractor - is coming in ahead of schedule and under budget, he noted.

“We are trending under budget. Schedule-wise, compared to the US industry standard, we are a few months ahead of schedule,” said Stadlwieser.

Construction on the $1bn-plus Oyster Creek project started in March 2018. There had been heavy foundation work on the site in late 2017 and early 2018, he noted.

Leadership, supervision and accountability were key aspects to the project’s success, along with a focus on safety, noted Fluor.

“We instituted a leadership and training agenda from the craft supervisor to the foreman level, to motivate and keep them engaged with the work,” said Rocky Plemons, vice president, construction, at Fluor.

“When there’s trouble with execution and performance, normally it’s not about the craft people but the supervisors not being engaged and driving performance,” he added.

The EG from the Oyster Creek plant will be “predominantly for export” with much going to Latin America and other parts of the world, and product also potentially going to Europe, noted Stadlwieser.

China has 25% tariffs on imports of ethylene glycol (EG) from the US instituted as of August 2018 as part of the ongoing trade dispute.

MEGlobal’s plant in Fort Saskatchewan, Canada has 460,000 tonnes/year of EG capacity, and its two plants in Prentiss, Canada, have EG capacities of 430,000 tonnes/year each, according to the ICIS Supply and Demand Database.

While MEGlobal expects to complete its project on time, many US petrochemical projects have missed deadlines and budgets, whether because of bad weather or labour costs.

MEGlobal was fortunate in that construction started in the 2018, after Hurricane Harvey hit the Gulf Coast. That storm delayed many projects along the US Gulf Coast.

But hurricanes are not the only reason why some chemical projects in the US faced delays.

ELEMENTS FOR PROJECT SUCCESS

In many cases, it comes down to properly staging materials for the project, said Plemons from Fluor. The scope of Fluor’s involvement at the MEGlobal project included the installation of equipment, steel and piping for the process unit at the project.

That required 7,000 tonnes of structural steel, 250,000 linear feet of pipe and 35,000 cubic yards of concrete.

Over the years, companies have blamed delays and overruns on a shortage of well-trained labour such as welders and pipefitters. But Plemons said the weak link has actually been among leadership and supervision. Because leadership is so important, Fluor adopted a training agenda for all of its craft supervisors, extending all the way down to foreman level.

One benchmark for the MEGlobal project was for the crew erecting steel to make at least 20 lifts/day with a crane, Plemons said. These types of goals set clear expectations to the crew.

Fluor even kept track of various project requests. If a project was hanging a certain number of spools of pipe each day, it should be accompanied by a certain number of scaffolding requests. If those scaffolding requests lagged behind the spool hanging, then that could cause a bottleneck down the line.

Another tip for getting a project done on time is having supervisors on the ground engaged in the work of their crew.

Plemons recalled a time in 2015, prior to the MEGlobal project, when he noticed a rejected weld, one that should have been easily noticed by the welder. It turns out that welder’s vision had started to deteriorate, something that is a hazard for that particular trade, he said.

Being on the ground not only helped Plemons find the problematic weld, it allowed him to come up with a solution to reduce the number of rejected welds in future projects. In 2015, he instituted vision exams for welders.

The policy helped keep MEGlobal’s weld-reject rate down to 0.19% among the 80,000 welds at the project, Plemons said. A more typical reject rate is 7-8%.

Safety is another key factor to avoiding delays. Mishaps and accidents cost time, and it needs to be the top priority of a project.

“The success of the project began with our safety focus,” said Stadlwieser of MEGlobal. The project had 3m work hours without an incident.

Tying everything together was coordination and team work among the contractors, suppliers and the project’s owner, MEGlobal, Plemons said. Fluor worked well with MEGlobal as well as Worley, which won the engineering, procurement and construction management contract for the project.