Case Studies › Downstream Refining
Case StudyRFP & Tender DesignDownstream RefiningIndependent · No Chemistry Sold

A refinery moves its water treatment RFP from chemistry volume to KPIs and value, and eliminates ~$48M a year in losses.

For 15 years, the refinery used the same water treatment specification and got the same results: 30–40 heat exchanger replacements a year, about 6 exchanger cleanings, and a production cut of about 13% every summer. Industrial Water Advisory rewrote the RFP around performance KPIs instead of chemistry volumes, built an accountability plan, and let the refinery award more than one supplier on the same site to drive competition, comparison, and accountability.

Asset
Large refinery water systems
Old Spec
Same RFP for 15 years
The Change
Product list → KPIs
Chemical Use
About −70%
Outcome
~$48M/yr losses eliminated
Challenge — What Was Happening

The refinery had come to accept an estimated $48M a year in capital and lost profit as the normal cost of operating: exchanger replacements, repeated cleanings, and a summer rate cut every year.

Earlier consultants had recommended long chemistry lists for every water system: boiler, cooling, wastewater, and RO. The failures, cleanings, and lost production continued.

The real questions were contractual. How do you write an RFP that lets suppliers provide only the chemistry the systems need, managed to a performance target? How do you hold them accountable? And what are the refinery’s options when performance is off target?

Intervention — What We Did

A new operations manager asked Industrial Water Advisory to review the chemical program and the failure history.

After reviewing the chemistry and operating conditions, we delivered an analysis and engineering report showing that the specified chemistry could not provide effective corrosion and deposition control at the site’s operating conditions.

Advanced saturation and corrosion modeling defined the risk and the types of programs known to deliver performance under those conditions. With that proof, the refinery asked IWA to rewrite the tender and help manage the bid.

The “Kitchen Sink” Specification
  • Cooling towers alone specified 11 products: phosphate, zinc, molybdate, a copolymer, a terpolymer, a phosphonate, hypochlorite, chlorine dioxide, glutaraldehyde, isothiazolin, and DBNPA
  • A dose and a maximum usage specified for every product
  • The same specification carried forward for 15 years
  • Supplier selected on the lowest price to supply the listed products
  • Alternative approaches not accepted
What the Specification Left Out
  • No corrosion rate requirement for any metallurgy
  • No deposition requirement
  • No microbiological control target
  • No defined operating conditions or makeup water ranges for bidders to design against
  • No way to compare supplier performance, and no fallback if the single supplier failed
Root Cause Finding

The specification, not the supplier. The RFP bought chemistry by volume and price, not by result. A long product list with maximum-usage caps cannot match the treatment to each system’s metallurgy, water, and operating limits, and no performance requirement meant nobody was measured on corrosion, deposition, or microbiological control.

The result was predictable. The program in the specification could not control corrosion and deposition at the site’s conditions, so exchangers failed, fouled, and limited production every summer, while every bid cycle repeated the same specification and the same outcome.

Performance & Scope
  • Bid by unit, not the whole refinery, so treatment could be awarded unit by unit and two suppliers could be onsite in case one failed
  • Corrosion rate requirements for each applicable metallurgy
  • Deposition performance requirements
  • Expected operating conditions based on the real limits of each water system
  • Average, low, and high makeup water quality for every system
  • Field and laboratory analyses required, and their frequency
Service & Accountability
  • The onsite team, contracted visits, and support required
  • Safety performance requirements for bidders
  • A base bid plus one alternate, so bidders could show what they would bring on day one
  • A defined list of value projects to start in the first 90–180 days
  • A third-party, supplier-neutral telemetry and modeling platform collecting data from the PI historian and every water treatment controller
  • A formal performance review program
~$48M / yr
Estimated annual losses eliminated: exchanger replacements, cleanings, and the summer production cut, recovered directly to profit.
Suppliers Awarded
2 of 6 bidders
Chemical Use
About −70%
Performance Data
1 independent platform
Value Projects
90–180 day plan
Results Delivered
  • Selected — 2 suppliers from 6 bidders to service the site
  • Measured — all performance data on one third-party platform, with regular reporting
  • Enabled — best-in-class chemistry, with about 70% less chemical used
  • Defined — a plan of value projects for operations, reliability, and performance
Economics
  • Exchanger replacements, cleanings, and the summer rate cut: an estimated ~$48M a year eliminated
  • Losses recovered directly to profitability
  • Clear targets that benchmark supplier performance for future bids and renewals
  • A second supplier onsite as a built-in fallback if performance slips

Estimate basis: 30 exchanger replacements at ~$100K each, 6 cleanings at ~$50K each, and a 13% summer rate cut on ~250,000 bbl/d for 92 days at ~$15/bbl lost margin. Actual value depends on site throughput and refining margin. Details generalized to protect client confidentiality.

The RFP is where you decide how your water treatment suppliers will be managed. If you keep having failures with the same RFP and the same approach, it’s probably not the water treater’s fault. Industrial Water Advisory helps you write tenders that maximize performance, while letting water treaters bring the best service and capability you deserve.

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