Despite the current downturn in the petrochemical industry and the accompanying volatile market conditions, there are still steps owners can take to maximize growth, according to James Kleiss, director of the USGC supply chain optimization for Valero.
Kleiss said among those steps is owners should always make sure they have a backlog of new projects, as well as improvements they want to make to current projects.
âAs more conditions move your way, make sure you have the project ready to go,â Kleiss said, speaking on a panel at the recent Refining Engineering & Construction event in Houston.
Beyond having a backlog of projects âready to go,â Kleiss said he expects his managers to share their ideas about improving productivity.
âI tell my guys that I donât care if their ideas are wild or whatever,â he explained. âI want them to have a list of ideas. And if theyâre good ideas, thatâs great, and if theyâre bad ideas, thatâs great, too. Thatâs why we have a process. Good or bad, weâll work them through the process, and with that process, weâll figure out if itâs something we want to pursue. Donât be afraid to bring up anything, because thatâs why we have the process that we have.â
Kleiss stressed the importance of knowing what market conditions favor projects already in the works, so when markets, conditions or projections move in a favorable direction, owners can best understand which projects to develop in that market environment.
Another tactic Kleiss suggested is to resist the temptation to chase short-term economics or trends.
âThatâs one thing that, as the owner of a company, you can really run into, especially when itâs driven by short-term events or thinking,â he explained. âYou need to make sure youâre not chasing some short-term event because in two, three or four years from now, thatâs going to turn and those market conditions arenât going to be that way anymore.â
Co-panelist Carlos Camera, senior advisor of major capital projects for Chevron, echoed Kleissâ sentiments regarding avoiding short-term thinking and how it differs in application regarding long-term projects.
âWhen we look at the long-term kind of thing, overall we go down the tactical decisions and clue in the business plan for the whole company,â Camera said. âBut then we break it down by region and we look into the whole portfolio for how it looks.â
Kleiss also encouraged owners to be familiar with regulatory and political environments as they pertain to their projects.
âWe talk about that a lot, but those items really can influence the projects that you might want to select,â Kleiss said. âObviously, thereâs a lot of interest in renewable fuels. Knowing and understanding the regulatory environment is extremely important.â
Camera summed up what he believes is the most significant, proactive way to avoid productivity issues during construction in three simple words: âplanning, planning, planning.â
Camera added it is essential to place highly qualified workers on-site âwho can go about the planning and make sure that productivity is in sync with the level of productivity that owners want.â
He noted project selection is a very dynamic and disciplined process from a market standpoint.
âWhen you look at project selection, itâs not going to happen in one meeting or one session,â Camera said. âBig developments like an ethylene cracker and things like that take years. Youâre going to have down times and good times during the selection process. When the project looks strained and has challenges, you go back and forth. But the maturity of that process will make your investment decision stronger.â
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