Shell Chemical plant struggling with substandard Chinese parts
I have a report from Shell Chemical detailing a shocking problem discovered in Holland. Chinese-made piping for a major chemical plant was discovered to have been deliberately reworked to hide serious flaws that engineers believe could have resulted in disastrous consequences.
Shell, the Dutch petrochemical giant, is currently constructing a world-scale styrene monomer/propylene oxide plant at Moerdijk, The Netherlands, known as MSPO-2.
Don't worry if you didn't know that.
Like any major industrical chemical operation, huge pipes will move massive volumes of potentially lethal chemicals from point to point in the processing. These pipes can't fail, or else people die.
The Bhopal disaster in 1984 was caused when an isolation plate was not put in place during a maintenance procedure. Water and methyl isocyanide mixed, exploded, and tens of thousands of people died, and are continuing to die this day, from exposure to the chemical cloud. Chemical plants are a serious business.
Leaks kill.
So read this report from Shell Chemicals that was slipped to me. I've highlighted the most interesting bits:
HIDDEN DEFECTS IN FITTINGS
Reported by: Shell Chemicals, SNC MoerdijkLarge bore flanges and fittings that were delivered in a critical phase of a multi-million project had to be rejected because of unusual and possibly concealed manufacturing defects. In this stage, the project can only be continued at the expense of very high cost and effort.
Currently SNC Moerdijk is implementing a 10 million+ project in the MSPO-2 unit. For these projects numerous piping materials have to be supplied, diameters ranging up to 56". Most materials are made of AISI 316L stainless steel.
Initially some issues were encountered on a shipment of 40" flanges, where cracking was observed visually. Follow-up inspections with dye penetrant testing further revealed that 10 out of 60 flanges had crack indications. Metallurgical investigations confirmed that cracking was caused by forging defects. Moreover, the investigations showed that cracking was concealed by welding! (see figure 1). The whole shipment had to be rejected. The manufacturer of the flanges is: Wenzhou Fada Flange Co Ltd, Wenzhou PRC.
In parallel, another shipment was received of fittings, sizes 8"and larger, including longitudinally welded fittings Since materials certificates and test reports were incomplete, additional acceptance tests were performed. These tests not only revealed that unacceptable welding defects were found on welds that were approved by the notified body, there were additional welds too! (see figures 2 and 3). With further investigation it became clear that the majority of the fittings appeared to have additional welds, as if they were assembled by pieces. The certificates did not mention any additional welds, nor repairs and were witnessed and approved by the NoBo (!). Also, while the longitudinal welds were visible, the additional welds were so well concealed that they could only be found by eddy current testing. Again, the whole shipment was rejected. The manufacturer of the fittings is: Shanghai Want Industry Co Ltd, Shanghai, PRC.
Although further investigation would be needed to detect all backgrounds and causes, the findings are striking and the impression of intentional deception is hard to avoid in both cases.
Needless to say that it is very unfortunate that these issues become evident in a critical stage and jeopardize the whole project, since finding replacement parts of this diameter on the very short term is extremely difficult. Furthermore, some fittings and flanges were already installed and had to be cut out.
Nevertheless, if these materials would have been installed without detection of these defects, consequences would without any doubt have been disastrous: potential of very serious process safety incidents and loss of production of months!
Actions taken:
- All rejected materials have to be replaced at the expense of very high costs and efforts. Failing to install correct materials on time, will stop the project with multi-million regret cost.
- The issue will be included in a Business Control Incident that will be submitted.
- Liability of the supplier will be established and followed through (again at the expense of cost and time).
The above incident triggers existential questions on the effectiveness of the procurement process, quality assurance and the policy to rely on the QA system of manufacturers and suppliers:
- How effective is the quality assurance system of our supply chain?
- What actions do YOU take to prevent this from happening?
Figure 1. Weld covering defect in flange
Figure 2. 24"elbow, with dotted line indicating additional weld as detected by Eddy Current and confirmed by metallography.
Figure 3. More additional welds, besides the longitudinal.
So two Chinese-based companies have been called out by Shell Chemical for shipping substandard part that Shell alleges were deliberately reworked to hide the flaws. Some pipes looked like they were welded together from different pieces, like a broken ceramic cup stuck back together with crazy glue. Paperwork was allegedly falsified, and certificates supplied with the Chinese parts were suspect. Worse than that, allegedly flawed piping and flanges were already installed, and had to be removed at great cost, but the alternative would have "disastrous" safety incidents. The entire project has been put in jeopardy by the "intentional deception".
Piping undergoes hydrostatic testing prior to use. You fill the system with water under pressure, and look for leaks. Based on this analysis, it is possible that entire lengths of pipe would have shattered.
Millions of dollars would have to be spent to fix this -- costs born by the shareholders and then ultimately by the consumers of Shell Chemical products (that is, anything made with plastic). The report is not dated so I can't tell you if this is a current problem or one that has been resolved. But like a lot of problems we've recently had with Chinese-made products, it sure seems likely that no effort would be spared by the Chinese authorities to make sure nothing of this would be made public.
Skew my story on Skewz.com
Rate political news for their bias, read related stories, and leave your own skewed commentary
Search for more opinions from Canadian bloggers on these related keywords
China Shell Chemical MSPO-2 Moerdijk The Netherlands Bhopal India fittings flaws welds cracks Wenzhou Fada Flange Shanghai Want Industry
Sphere presents related news articles and blog posts
Sphere It!
Comments
That is pretty damn serious business especially noting that not everyone may have the QC in place that Shell does.
Posted by: Darcey at June 29, 2007 02:31 PM
Typical Chinese crap products. Those loosers will build 1000 bad parts to get 1 good one.
Guess who gets the 1000 bad parts.
Posted by: missing link at June 29, 2007 06:46 PM
And that is what happens when you accept the lowest tender.
Posted by: Ron at June 29, 2007 09:52 PM
What a surprise... and all for the bottom line.. and all of this when our North American manufacturing jobs are going to China. Keep producing in N. America to avoid safety hazards such as this. Didn't I read that Boeing is now buying certain aircraft parts from China now too???
Posted by: Vil at June 30, 2007 08:26 AM
I love the China-bashing. Everyone knows that when you go with an unknown supplier you take certain risks. Shell's QC picked up the shoddy work and issued a press release that will virtually kill the companies involved chances of getting any sizeable future contracts, likely putting them out of business. What more do you want?
I also got a good chuckle from your last line where you specualate that Chinese-authorities were involved in some sort of conspiracy or cover-up with absolutely no evidence whatsoever. I would think they have better stuff to do than get involved in a dispute between Shell and two domestic suppliers who obviously have a limited future in business.
Posted by: at June 30, 2007 04:42 PM
This wasn't a press release.
Posted by: Steve Janke at June 30, 2007 05:44 PM
Sorry. I assumed when you said that Shell called them out that they had gone public with their complaint.
Posted by: at June 30, 2007 06:15 PM
I blame Shell for this whole mess. It's well known that the Chinese will cut corners anyway they can. The only way to protect yourself with Chinese manufactured products is to have third-party inspection that cannot be compromised by bribery. Obviously Shell had no reliable factory inspection and just trusted the Chinese. I doubt they will bother attempting to recover their costs from these Chinese companies because that will be a waste of time and money. Shell engineers were stupid to have trusted the Chinese just because they got lower prices for the product.
Posted by: Bruce P.Eng. at June 30, 2007 06:24 PM
Chinese intransigence and incompetence is enabled in large part because of a lack of transparency. Put it in the open, scare the general public silly with the truth of the products they are exposed to, and then Chinese manufacturing will change. Or whither and die. Either works for me.
Posted by: Steve Janke at June 30, 2007 06:25 PM
Turn the telescope around and look at the Netherlands and the EU, and not the Chinese. We know the Chinese government and all their cronies are a bunch of lying, thieving idiots. But what does that say about the people who have placed themselves in the position such that they have no other choice but to buy stuff from them?
The Netherlands are struggling with a substandard socialist political and economic system which has allowed a huge percentage of fit adults to screw the dog and live off the government for their entire lives. In order to pay for all this dog-fucking the government has joined a super-socialist organization called the EU. The entire purpose of the EU is to allow as many people as possible to do as little as possible for as long as possible, ignoring the laws of economics and the fundamental axioms of human behavior until the day when the whole thing collapses into the pyre of bankruptcy, civil war and genocide.
In the meantime, since everyone is so busy crafting the perfect welfare policy, the perfect rules for euthanizing the old and the sick, designing a set of regulations to make it all but impossible for anyone to create a new business in the free market, searching for the Goldilocks formula for destroying the currency at just the right rate that postpones for as long as possible the inevitable socialist implosion - as long as it's just too much damn trouble to actually build anything any more - the Dutch have decided to buy crappy, bogus goods from a country which is slightly less socialistic than themselves, and which has a little less conscience about trying to conceal their fraud, negligence and other crimes.
Posted by: at July 2, 2007 03:19 PM
To the person who blamed Shell engineers, I doubt the Shell corp engineers specified a Chinese mfg. It was likely some middle management layer that did so to save costs.
Didn't work out that way though. You wonder how many more shoddy products are in use now that weren't caught.
Posted by: jmcnamera at July 3, 2007 09:34 AM
I fight this kind of garbage on a daily basis in the oil supply side. Its very simple; very few purchasing agents understand the difference between cost and expense.
Sure a valve may cost you 650 dollars, but when you have to replace it in six months time, what is the expense? Some purchasing agent has decided that a low priced equivalent at 650 dollars (say vs. 690 for the quality valve) is the way to go. Result? The purchasing agent looks like a hero. They saved the company a bunch of money.
Six - twelve months down the road, the replacement for this poor quality fitting is 5 times the original purchase price. That comes out of operations. But the purchasing guy is never implicated. Nor is the engineer who spec'd it, although both should be held accountable and their bonuses deducted accordingly.
Posted by: JimC at July 3, 2007 02:23 PM
...what's the problem with this? Supply and Demand. Sow and Reap.
If we'd all get our heads out of our arses, we'd see this law of economics being played before our eyes.
We want cheap, we get cheap.
What's the problem?
Posted by: tomax7 at July 3, 2007 07:57 PM
...here's a good example of Supply and Demand.
My outside GFI wasn't working. Get one electrician friend to find this out. He says go to RONA and get one.
No problem. I see one for $13.95 and one for $16.50. Get the cheaper one.
Have it installed. Three months later get zapped. Call another electrician friend (first one busy). He says GFI is "made in China", guarentee's this is why it failed.
Tells me to get NA made one.
No problems since.
But this is just a small example of the problems we face out there. Sure one was more expensive, but both have the CSA stamp on them.
So they both are safe right?
Posted by: tomax7 at July 3, 2007 08:08 PM
So the crap Chinese pipe fitting arrived on the job site and the inspectors detected the flaws. They went to the project engineers who confirmed the inspection and both rejected the Chinese piping. They sent their report to upper management who were probably engineers too.
It's inconceivable that specialized piping components built to spec were not properly inspected at the factory ... unless these components were found on the open market by purchasing dept and brought in on the cheap. What do you think hhappened???
Posted by: Bruce p.eng at July 3, 2007 09:06 PM
should we consider the above mentioned two Chinese manufacturer is good manufacurer because Shell like to buy from them? In my experience, Shell is very strictly for choise their supplier. Give Chinese manufacturer some more potience, they can do better!
Posted by: thomas at July 5, 2007 12:36 AM
"Give Chinese manufacturer some more potience..."
...is that like Coigate?
;-)
hehe
Posted by: tomax7 at July 5, 2007 06:17 PM
 
|
|
