The Six Sigma Equation

Business management strategies such as Six Sigma and Lean now embrace a rich variety of industries. Alex Hawkes talks to Julian Mosquera of LCP Consulting to find out what benefits they can bring to the chemicals sector.

Six Sigma is a business management strategy that was introduced in the US by Motorola in 1981 and is now deployed across a wide range of sectors, including the chemicals industry.

Having enjoyed early success with the likes of General Electric and Honeywell, varying forms of Six Sigma were deployed on a wider scale in the late 1990s and have most recently been practised in conjunction with Lean – a production practice that focuses on eliminating all waste from the production chain.

Six Sigma projects tend to follow two main methodologies, which comprise five phases each – DMAIC, which is used for projects aimed at improving an existing business process and stands for define, measure, analyse, improve and control; and DMADV, which is aimed at created new product or process designs and stands for define, measure, analyse, design and verify.

The strategy's name derives from the notion that if one has six standard deviations between the process mean and the nearest specification limit then practically no items will fail to meet specifications. This calculation method is employed in process capability studies which are often implemented by Six Sigma consultants, such as LCP Consultants.

Alex Hawkes: What is the main ethos of Six Sigma? And how does it work in tandem with other production practices such as Lean?

Julian Mosquera: Six Sigma and Lean are both essentially a mindset and collection of techniques deployed to investigate and resolve a given problem or business issue. Six Sigma has evolved from what was originally a single technique designed to manage process variability – at the heart of this philosophy is the idea that making processes more predictable and reliable leads to increased quality, improved yield and less waste. Lean, on the other hand, has a strong process engineering background with its central focus on waste reduction in all its forms.

"Six Sigma has evolved from what was originally a single technique designed to manage process variability."

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SINOPEC to build two MTO projects in Henan

In Feb. 3, 2010, SINOPEC and Henan Provincial Government signed a memorandum of outstanding, deciding to set up a 1.8Mt/a methanol to 600kt/a olefins project in Baoshan Cyclic Economy Industrial Cluster, Hebi City, Henan Province.河南省鶴壁市

The project will be jointly executed by SINOPEC and Henan Coal & Chemical Industry Group (HNCC河南煤業化工集団）. The project shall combine coal mining, methanol synthesis, MTO (methanol-to-olefins) and downstream processing into an integrated operation. Work of the project preliminary stage is divided between HNCC, in charge of the coal mining design, and SINOPEC, in charge of that of methanol, MTO and the derivative plants, while relevant governmental departments of Henan province shall provide the supporting documents necessary for the project proposal. The project application report shall be accomplished and submitted to state authorities before June 2010.

According to the earlier released information, at the end of 2009, SINOPEC approved the ethylene feedstock diversifying project proposed by Zhongyuan Petrochemical 中原石油化学in Puyang濮陽市, Henan Province. This project was reported to cost around CNY1.5bn and use a SINOPEC self-developed SMTO process. Construction scope shall cover a 600kt/a methanol to 200kt/a olefin unit. Also, it includes the expansion of existing PE unit to 260kt/a and a new PP plant of 100kt/a capacity. Zhongyuan Petrochemical is a subsidiary of SINOPEC. It is currently operating a 180kt/a ethylene cracker, a 200kt/a PE unit, a 60kt/a PP unit, a 50kt/a C4 extraction and a 100kt/a aromatic extraction plant. 

Combining the news, SINOPEC is supposed to execute two MTO project in northern part of Henan Province. Firstly, the company will build a demonstration MTO unit of 200kt/a olefins in Puyang . Then a larger size MTO complex (600kt/a olefins) shall follow and to be built in Hebi.

According to the analysis of ASIACHEM, the existing naphtha crackers of under 300kt/a capacity in China will gradually lose their competitiveness with those coal-based olefin plants developed in China or ethane-based crackers boomed in Middle East. Therefore, the feedstock change project of Zhongyuan Petrochemical, once comes true, will be a good choice for SINOPEC, by the project not only the company can obtain commercial experience from the 200kt/a MTO operation and avoid the risk of one-step scale up to 600kt/a capacity, but also the existing downstream plants and distribution channels can be made full use to reduce investment cost.

SINOPEC has developed SMTO (initiated with S for SINOPEC) process as a technology reserve. In 2007, SINOPEC built a 100t/d SMTO commercial pilot unit in Yanshan Petrochemical. Then in 2008 the company developed 1.8Mt/a SMTO process package and acquired all capabilities necessary for the engineering & construction of full size MTO complex. 

Sinopec announced that it has all the capabilities to scale up the SMTO project to 1.8 Mt/a (methanol feedstock). 

Both Puyang and Hebi are located in northern part of Henan Province, belonging in one of the state planned 7 coal chemical industry bases, i.e. the borderland between Jiangsu, Shandong, Henan and Anhui Provinces. The abundance of local coal and water resources will provide a better foundation for SINOPEC to develop coal chemical projects.

Quoted from: New Kaznak

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No more Iraqi oilfields for foreign companies: prime minister

Iraq has no further plans to use foreign firms to develop its oilfields beyond ones auctioned off last year, the country's prime minister said on Saturday(2/20), ahead of a national election next month.

Analysts say that foreign companies may have accepted the tough terms in oilfield development contracts awarded in two rounds last year partly to secure an initial foothold in Iraq, with a view to possible access to other untapped reserves later.

Iraq has the world's third-largest crude reserves and is the world's 11th-biggest oil producer.

Prime Minister Nuri al-Maliki said Iraq should start thinking about developing its national oil firms and warned of "staying captive in the hands of foreign oil firms."

"I told the oil minister during a cabinet meeting that we will never sign any more contracts with foreign oil companies," Maliki told supporters at a rally in the southern oil hub of Basra, weeks before a parliamentary election on March 7.

"We will depend on our national companies in developing our oilfields," Maliki said.

His nationalistic tone could discomfort oil firms such as BP Plc and Royal Dutch Shell, which are monitoring their likely reception in a country wracked by years of war and with little recent experience of working with foreign companies.

Baghdad has struck deals with international oil firms that could boost its output capacity to 12 million barrels per day (bpd) within seven years from about 2.5 million bpd now.

Oil Minister Hussain al-Shahristani said in December there were no plans for a third oil contract auction.

Maliki's coalition is not expected to repeat its triumphant performance in last year's local polls. Huge bombings have since chipped away at his claims to have improved security, and opponents have united to oust him.

Analysts expect the ten oil deals awarded in auctions last year will likely survive the change in Iraq's government after the parliamentary vote next month, seen as a crucial test for Iraq as it tries to move away from years of war and sanctions.

Foreign capital and expertise is seen as essential if Iraq is to rebuild its battered economy and infrastructure.

The country's oil installations and pipelines have suffered repeated bombings and sabotage, and many of its most qualified workers fled the country in the violent and chaotic aftermath of the 2003 U.S.-led invasion.

Quoted from: New Kaznak

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LyondellBasell Preparing to Stop PP Production in Terni

LyondellBasell Industries today announced a project to cease the production of polypropylene (PP) at Terni, Italy. The company has started the employee consultation process regarding a project to permanently shut down the unit. 

“Demand for polypropylene continues to be affected by global economic conditions and the resulting market environment has made facilities such as Terni no longer economically viable. We expect to be able to meet projected customer demand for polypropylene (including local customers in Terni) with product supplied from our other facilities in Italy,” said Anton De Vries , LyondellBasell’s senior vice president, Olefins and Polyolefins - Europe, Asia and International.  LyondellBasell said that PP production activities in Italy will be focused on the company’s world-scale sites at Ferrara and Brindisi.  

The Terni plant has a nameplate capacity of 255 KT per year.  In conjunction with the shutdown project, LyondellBasell has started consultation with representatives of the employees to determine the appropriate path forward for the employees at the site.  The plant currently has approximately 120 permanent employees.

Quoted from: New Kaznak

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