Hydrocarbon Processing - July 2021 - 23

Special Focus Plant Design, Engineering and Construction
P. DONNELLY, AspenTech, Bedford, Massachusetts
Why EPC firms are accelerating digitalization
Even before the challenges of the COVID-19 pandemic
emerged, engineering, procurement and construction (EPC)
firms were already under considerable stress. Combining low
net margins with the burden of carrying much of the project
risk was resulting in general underperformance by the sector.
When plant owner-operators announced capital spending
cuts in the range of 20%-50%, it looked like engineering firms
were about to enter another cyclical downturn. Interestingly,
the management of these firms, with the hard-won wisdom
gained in previous downturns, did not act as one might have
predicted. Instead of immediate deep cuts to personnel, engineering
firms looked for alternative ways to pare costs, such as
cutting dividends, reducing bonuses and eliminating certain
non-employee contractors.
While layoffs have not been completely avoided, these actions
have mitigated the deeper reductions in the workforce that
were seen in 2014-2015 and have also better positioned these
firms to capitalize as a recovery slowly emerges. It is also worthy
to note that, in addition to carefully managing cost reductions,
certain investments have continued and even accelerated-
most notably in digitalization. According to McKinsey & Company's
2020 report The Next Normal in Construction, two-thirds
of the 400 surveyed EPC executives were accelerating their investments
in digitalization. These managers and executives understand
that smart investments in digitalization will help preserve
core competencies and personnel, and, over the long term,
protect their ability to compete as business conditions improve.
Often, the objectives of digitalization investments include
streamlining software and technology portfolios, along with
automating the flow of project data. This enhances collaboration
internally and externally, while making data available for
reuse across disciplines and project phases. In addition, many
firms are now seeking to continue leveraging project engineering
data to provide value-adding services in operations
and maintenance. This can increase customer intimacy, while
adding necessary and more stable revenues based on operating
budgets. The digitalization of project data is a key enabler
of these digital-twin-based services, which will be enhanced
through a digital handover.
Four key challenge areas for EPC firms. Many EPC firms
are well underway on their digital journey, while others are
still in the planning phase. However, where are these investments
going? Common digital initiatives can be categorized
into four key areas. These include:
1. Data management: Digital technologies can play a
hugely important role in helping EPC firms manage
and move massive amounts of data more efficiently.
This means a reduced reliance on physical
documents to store and share information and
making that information more available for review
and use by others, as well as making it faster and
easier to hand off to other disciplines, partners,
vendors, owner-operators, regulators and other
parties in the project ecosystem.
2. Technology consolidation: Many EPC firms
have dozens (if not hundreds) of unique software
solutions in the engineering department. Comprised
of Tier 1 providers, niche commercial applications
and engineers' homegrown applications, these types
of solutions create a bird's nest of technology that
prevents any real progress toward digitalization. By
standardizing and reducing the overall number of
software providers, eliminating redundancies, and
using stricter criteria for the support of smaller niche
apps, chief information officers (CIOs) and heads of
engineering departments can simplify the landscape
of the software that they rely on, while creating the
conditions required for automating the flow of data.
3. Apps and data integration: Once the software
portfolio is rationalized and consolidated, the work
of integrating the remaining applications should start.
Connecting the remaining apps with the intent of
automating flow and reusing data should be the priority.
4. Expansion of digital-twin-based services:
The engineering data used to design and build the
plant can also be used to enhance startup, training
and operations, while providing additional and diverse
revenues for EPC firms. Examples might include the
use of engineering tools to ensure that the models
used for running the plant are accurate and up to
date; that dynamic models and operator training tools
ensure safe, profitable operations; and that predictive
maintenance services maximize asset uptime.
Digital twins of the physical asset and its operating conditions
are a marriage of the digital representation of the physical
plant (e.g., equipment data) and the information about the
process occurring within that physical equipment.
A digital twin can be viewed in three ways. The first is the
plant digital twin, which provides equipment and process
models of the plant, along with relevant cost data. These types
of digital twins are typically used for plant design, debottlenecking
and revamping, as well as for tuning of the asset during
operations and maintenance. Plant digital twins can be
Hydrocarbon Processing | JULY 2021 23

Hydrocarbon Processing - July 2021

Table of Contents for the Digital Edition of Hydrocarbon Processing - July 2021

Hydrocarbon Processing - July 2021 - Intro
Hydrocarbon Processing - July 2021 - Cover1
Hydrocarbon Processing - July 2021 - Cover2
Hydrocarbon Processing - July 2021 - 3
Hydrocarbon Processing - July 2021 - 4
Hydrocarbon Processing - July 2021 - 5
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Hydrocarbon Processing - July 2021 - Cover3
Hydrocarbon Processing - July 2021 - Cover4
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