Economic Mechanics Behind the Repair of Control valves
energycioinsights

Economic Mechanics Behind the Repair of Control valves

By Energy CIO Insights | Tuesday, September 24, 2019

The economics behind the repair work of valves is complex. The rates are dependent on the work environment and the intensity of the job. 

FREMONT, CA: Sayings around the valves have existed since the valves were designed for the first time. While choosing a valve—price, quality, and delivery is important, but only two can be selected—should be kept in mind. Today, the choice is no more, and the most important criterion is the quality of the valves, then the delivery and lastly the nagging interloper price. 

In the business world today, the greatest influx of valve economics comes from the regular dedicated periods of plant maintenance, which includes outages, shutdowns, and turnarounds. During turnarounds, the valve repair companies have a test to pass as the volume of work is unknown with an additional seasoning of the time limits. Identification of the work that needs to be done, equipment required for the repair work, and strict deadlines are some among several pressure points. The repair person needs to measure accurately the work carried out for billing, making enough profit, and staying within the company’s budget.

The contracts are onerous in case of turnarounds because most of the problems are well known and solved quickly. But, some cases need further investigation to look into the exact issue. 

The difficult thought for the owner is to choose, that means understanding that every dollar needs to maximize the value of the valve. The ones that last longer and easily repaired are the best of the valves. The costs of owning these valves need to comprise the initial investment along with the required maintenance cost and repairs; this is called a Total Cost of Ownership (TCO). 

TCO is considered most important in the repair/no-repair decision-making steps. Although the variables have changed significantly since the last two decades, the variables are equally important. Today, most of the valves that were fixed more than two decades ago are not repaired but replaced. The replacement of such valves cost less than repairing it. 

The TCO assists the owner to draw a line between the economically repairable valves or whether to replace it with a newer valve of distinctive size and pressure class. Many refiners will not consider repairing a Class 150 cast-steel valve less than the NPS 12. In class 300, the economical-to-repair dimension limit is around NPS 10 for cast steel-bodied valves. The size scale drops even lower in class 600 and above.

With inspections and checkups for all parts ready, the repair work in the facility can be listed with attention on the scope of work and a detailed quotation including the expected price, purchase of the new parts and the availability. The owner then decides whether to repair it or replace it. The option of taking up the contract is also an important decision the repair professionals need to make. Some crucial factors that influence the decisions are up and down monthly business cycles, no of projects carried out in a year. For assessing the financial viability of a repair company, at least a 12-month business cycle needs to be checked. A full year cycle, wherein the majority of months should show a profit, even if the minority is stained in red ink. 

The labor rates for fieldwork are rising to more than 50-100 percent in comparison with shop rates. The high prices are dependent on the working conditions of the environment and the stringent rules imposed on the workers, when in plants. With settings ranging from dull to the most dangerous workplaces being a nuclear power plant. The personnel chosen to perform the repairs in the nuclear power plant turf are the cream of valve repair crop. The operation is highly sensitive, and any mishaps during the repair can be deadly. The labor rates of these professionals are extremely high. 

If the prices are set before the inspection of the valves, significant expenses are saved, but many factors can go wrong, especially while fixing the valve. Set prices are occasionally carried out, but, if a no-inspection-basis quote is given, the value will be extremely high to accommodate any extra expenses or cover all contingencies. 

The goal of every repair guy is to perform a valve repair work that is profitable to both service providers and the owner. The owner needs to be confident about the repair work conducted. On the flip side, the service provider should be able to pay the workers well. All while making a reasonable profit is what the objective is at the end of the day.

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