Obsolescence a Great Challenge in Asset Life Cycle Management: Managing the Qatargas Way
Authors: Raj Jayprakash 
Published: December 2015

This paper is focused on bringing insight into the risk imposed on asset life cycle management by obsolescence of spares and equipment, it elaborates upon various aspects related to obsolescence, causes, classifications and impact. The paper also demonstrates the comprehensive proactive Obsolescence Management Process developed and adopted by Qatargas, the world's premier LNG company, and highlights associated challenges, benefits and forward path.

This will be a power point presentation with several pictures, diagrams, texts and graphs. The author, with his significant experience in asset lifecycle management will take the audience through definitions and classification of obsolescence with practical examples. The presentation then provides insight into the risk imposed by obsolescence on asset life cycle management and how availability and asset life cycle costs are impacted due to obsolescence. As the presentation progresses it will demonstrate a process that can be adopted by oil and gas operating companies to proactively mitigate the adverse effect of obsolescence with appropriate case study.

Oil and gas sectors are very much asset based industries and they are highly dependent on technologies and automation for their efficiency and safety. With the fast moving technological environment around the world due to innovation, scientific research and commercial reasons; the products are getting obsolete at rapid rate. It is estimated that 10 to 15 per cent of items enter into obsolescence phase within the first five years of their installation, especially electronic items. There are even instances when items get obsolete before actually put into operation. This scenario has significant impact on reliability, availability and life cycle cost of the asset. This also imposes a great risk of emergency and unplanned upgrades and thus a great challenge in Physical Asset Life Cycle Management. Qatargas Obsolescence Management Process is a world class business process and is an important step in the physical assets' lifecycle management. This process helps engineers and operators to proactively identify, monitor and mitigate the adverse impact of obsolescence of spares and equipment on the asset availability and reliability. The process also supports the highest level of active asset life in the project design, thus ensuring maximum asset availability with a high level of spares and service dependability.

Obsolescence is a new challenge and there is limited awareness about its impact. Obsolescence Management Process is not a common process in oil and gas operating organizations. This presentation will provide insight to the participants from operating organizations, what risk their own organization is having and how they can adopt this world class process. This presentation will highlight the challenges, preferences and expectations of operating organizations regarding Asset Life Cycle, Obsolescence and Spares/Service support requirement to the Manufacturer Companies, EPC companies, Consulting Organizations, Spare part Suppliers and software providers.