'More companies see training as an investment, not an expense'

Monday, February 19, 2018

As the exploration and production of hydrocarbons is revitalized in Argentina and other Latin American countries with increased investment and the great potential of formations like Vaca Muerta, national and provincial governments are pouring investment into their oil and natural gas pipeline networks which are strategic assets that need proper management.

To find out more about these developments and employee training in the sector, BNamericas spoke to Alejandro Palacios, founder and president of Training Argentina.  

BNamericas: What is Training Argentina and what plans do you have for 2018?

Palacios: Training Argentina is a consulting and training company specializing in the transportation of oil and natural gas by pipeline. Our services focus on pipelines, covering their entire life cycle from design, construction, operation, maintenance, integrity management, to their expiry, all under the concept of asset management. Our headquarters are located in Mendoza province, Argentina, and from there we work in different countries in Latin America such as Argentina, Bolivia, Chile, and Mexico, advising and training companies producing and transporting natural gas and oil.

Our services help companies to strongly improve their management to create a safe, profitable and environmentally-friendly operation, minimizing risks and maximizing the return of investment in pipelines, while developing the technical competency of their employees. Our aim is to efficiently manage pipelines and develop human capital for the company that hires us. We say, "do not change your employees, make your employees change."

For 2018, we have planned to strengthen our position in the countries that are already part of our business, through agreements with companies and institutions in the sector, which will allow us to have a greater presence. At the same time, we will continue to add value to our current client base. We are also developing strategies focused on new commercial links that allow us to be present in other oil and gas countries located in Latin America.

BNamericas: How does one manage pipelines that transport oil and natural gas?

Palacios: Transport pipelines are a very important part of the energy development for any country. They are strategic assets, which deserve to be treated with great care to avoid undesirable events that can have an impact on society and the environment, such as environmental pollution, spills, explosions, service interruptions, and in the worst cases, loss of human life. Therefore, safety is vitally important. 

The objective is for the pipelines to operate under safe and efficient conditions, for this we must have highly trained personnel, updated procedures, modern systems for monitoring, maintenance and correction of failures, and emergency plans, among the main issues. Therefore, the operating companies must have a management plan for integrity, performance, communications, change management and quality control which allows them to organize all the activities of identification, evaluation and mitigation of the dangers to which the pipelines are exposed.

The use of a Geographic Information System (GIS) is a very useful tool for the analysis of these existing hazards.

BNamericas: What are these risks that pipelines can be exposed to? And how can they be managed?

Palacios: Risk is a somewhat complex concept, but it is to do with the possibility of events occurring in the future. From a scientific point of view, it consists of evaluating the probability of a fault occurring and the consequences that this entails. Although the transport of oil and gas through pipelines is the safest way that exists, it does not mean that there is no risk, but it is much more manageable than transport by other means, as it would be in tankers or trucks, for example. Therefore, those risks must be managed or controlled.

Identifying hazards is key in that search for safety. The ASME B31.8.S code, Managing System Integrity of Gas Pipelines, considers the threats to which pipelines can be exposed and classifies them according to time such as corrosion, manufacturing and construction defects, damage by third parties, poor operations and external environmental forces. The big problem is that the threats are interactive. Hence the importance in managing them efficiently. 

BNamericas: What kind of pipeline inspection technologies are operators using internationally?

Palacios: An operator must consider the inspection of its pipelines as part of its business strategy, since the main objective is to maintain the safety of the pipeline and ensure that the fluid reaches its destination in a timely manner. Transport pipelines, in most cases, are buried, so the operator must use certain technologies to collect information on the pipeline, and determine the state in which it is in.

One of the most widely-used technologies worldwide, are "high resolution scrapers." These are instrumented tools called "smart pigs" that go through the ducts internally, pushed by the existing pressure differential and maintaining the flow without interruptions. The technique is called "in line inspection (ILI)." These magnetic or ultrasound tools detect any defects present in the steel of the pipeline like corrosion, dents, punctures, etc., and by applying qualifying criteria, they can determine transport under the current operating conditions, ensuring that the pipelines have a long and profitable life.

One of the latest technologies is the EMAT [Electro-Acoustic Transducer], which uses a magnetic field to generate ultrasound in the wall of the pipeline, and thus determine any cracks in the steel or disruptions in the coating - all a great technological development!

The ILI is the most advantageous method to maintain safe pipelines in terms of its cost-benefit, since it lets us implement effective maintenance plans, avoid unnecessary repairs, and protect heritage assets.

BNamericas: In your experience, how do companies in the oil and gas industry prioritize the training of their professionals?

Palacios: As an instructor, I have been able to realize that more and more companies see training as an investment, and not as an expense, which makes me very pleased. It is no longer a matter of complying with a budgetary item and sticking to a generalized program, companies are looking for courses tailored to their needs. For this reason, in-company training is increasingly gaining presence. 

In our area we are looking to find experts in the field, precisely because there are risks and the objective is to have a safe and reliable operation. Awareness of these risks, of handling facilities with flammable products, is the first step to the success of operations. 

Companies are going through a change where they know that it is key to know the potential of their employees in detail. They need to know if their tasks are being carried out properly, or if they should acquire new concepts that allow them to improve their performance. They want to have more competent professionals.

Many companies understand that knowledge management is very important to achieve success. That is why they hire a post-training service where the consultant performs a study regarding the results obtained within the organization, and evaluate what the employees have learnt and take the necessary corrective actions.

BNamericas: Are the increases in tariffs approved by the state for pipeline operators sufficient to stimulate investment?

Palacios: What is important to take into account is that natural gas transportation and distribution companies in Argentina are part of a regulated market, where, without a comprehensive tariff review that lets service rates be updated, it can be very difficult to make investments in the sector. Even more so in an economy with high inflation.

Therefore, the measures implemented by the ministry of energy and mining are a great step forward for the reactivation of the sector and the benefit of society. [This] after many years of stagnation, where the pesification and freezing of public tariffs increased the competitiveness of gas, but at the same time discouraged investments aimed at boosting the transport of this resource, and operators focused on, at best, only maintaining their assets.

Now, to determine if this tariff readjustment will allow the operating companies to complete the investments agreed with the government is the great dilemma. The investments should be oriented to the expansion of the national pipeline system, but also to the substantial improvement in their safety conditions, taking into account that the faults in the pipelines can generate great catastrophes, which should be avoided with efficient, preventive and corrective predictive work plans.

In order for investments to be made concrete, it is essential to know the real cost structure of companies in the sector, since without this it would be very difficult to predict economic behavior.

For this, it is important that the state fulfills its role as comptroller through national gas regulator Enargas, and thus analyze in detail the internal budgets of the licensees.

It should also be said that with these tariff measures the state is trying to promote investment, not only in transportation and distribution, but throughout the value chain of the natural gas market, mainly in exploration and production.

About Alejandro Gabriel Palacios

Alejandro Palacios is an industrial engineer who specializes in the management of the transportation of oil and natural gas by pipeline. 

For 14 years he developed his professional career at Ecogas before founding Training Argentina. 

About the company

Training Argentina is a training and consulting institution specialized in oil and natural gas pipeline management.