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Chinese chemical plants and refiners raise the bar on HSEQ

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Arthur William Stoddart Arthur William Stoddart
Regional Manager Oil & Gas Greater China, Korea & Japan
Qin Zhong Gao Qin Zhong Gao
Head of Section
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Wanhua Chemical Group at Yantai
Wanhua Chemical Group has set challenging health, safety, environment and quality goals for its plants at Yantai (pictured) and overseas (Photo: Wanhua Chemical Group)
  • Health, safety, environment and quality (HSEQ) move up the agenda

  • Wanhua Chemical Group sees HSEQ as key to international ambitions

  • International standards assist globalization

China’s chemicals and oil refining industries are increasing focus on quality standards as an overhaul of domestic health, safety and environmental (HSEQ) laws and regulations continues. They are responding to this and global opportunities by also embracing international industry standards.

Wanhua Chemical Group is pursuing a vision to strengthen its global position, for example. It has several plants in China, one in Hungary, and plans to build a facility in the US to produce methylene diphenyl diisocyanate (MDI) for polyurethane manufacture.

It has set “challenging leading and lagging indicators” to achieve its HSEQ targets and benchmark performance, according to Chen Yifeng, vice president.

International standard assists globalization

Wanhua views HSEQ management, technical innovation, and ‘green chemical chains’ as pillars of brand value-building built on ‘sustainable development though responsibility’.

It targets zero injury, zero accident and zero emission through its own HSEQ management system based on area safety management and universal safety principles. Every area of a plant has designated personnel responsible for the safety of people, facilities, activities and the environment.

“We benchmark our performance through lost time injury rate; recordable injury rate; process safety accident rate; traffic accident rate; training and drills; inspection; safety observation and communication; and safety sharing,” explained Chen Yifeng.

“The performances of these leading and lagging indicators are monitored based upon regular HSEQ performance assessment procedures,” he added. “The International Safety Rating System (ISRS) is a comprehensive and systematic assessment tool for HSEQ and risk management. It lets us identify the gaps with the international benchmark. It offers more detailed instructions in safety management, such as in the field of barrier management, which complement our internationalization well. It also provides a good window of opportunity to learn new tools and advance HSEQ management.”

DNV GL recommends implementing ISRS to identify gaps in HSEQ management to plan how to enhance safety management, safety culture, and risk assessment.

HSEQ regime changing for refineries


In the refineries sector, implementation of higher fuel-quality standards and stricter environmental regulations are challenging large-scale, state-owned companies to adopt strategies and advanced technology to reduce pollution, and improve production and energy-use efficiency.

“A structural shift away from an investment-driven economy to a consumption-driven one also drags on domestic demand for refined fuels, which is leading refiners to manage output,” said Arthur Stoddart, regional manager, Greater China, Korea and Japan, DNV GL – Oil & Gas. “They are looking to foreign markets to underpin revenue growth in the future, and fully understand the importance of their HSEQ processes and management to achieve this goal.”

Internationalization is a key strategy in a country which accounted for 15% of global refining capacity at the end of 2015.1 Amid overcapacity at home, the most ambitious refiners want to keep pace with global requirements for product consistency and quality to underpin product reputation.

Stoddart explained: “Like Wanhua Chemical Group in the chemicals sector, some refiners integrate the essence of international systems and standards within their own practices, but tailored for their own circumstances. This strategy helps them to maximize both domestic and export opportunities safely and profitably.”

Benchmarking HSEQ performance in China

One indicator of the challenge for Chinese refiners is that 95% of the country’s refineries with an annual capacity of at least 10 million tonnes are self-designed and self-built2; and the application of local, national and international standards vary.

Commissioned by the State Administration of Work Safety (SAWS) to perform ISRS assessments of four key refining companies, DNV GL found them to be ‘middle of the pack’ internationally.

When SAWS recently organized training courses for leaders of state-owned refinery and petrochemical organizations, DNV GL was invited to introduce ISRS applications: four courses have been completed so far.

“We are encouraged by the appetite shown by Chinese refiners to raise the bar on HSEQ performance as part of their strategic responses to challenges and opportunities, and look forward to working closely with them in future to assist them on the journey that they are undertaking,” Stoddart said.

References

1 ‘Statistical Review of World Energy 2016’, BP, February 2017
2 ‘Oil and gas regulation in China: overview’, X Jin, Z Yan and Z George, King & Wood Mallesons in Thomson Reuters Practical Law, October 2014

Disclaimer:
DNV GL prides itself on providing accurate information but makes no claims or guarantees about the accuracy, completeness or adequacy of contents in this publication, and disclaims liability for any errors or omissions. The authors’ views here do not necessarily reflect DNV GL’s views.