ASSET RECOVERY AS A WAY TO FUND D&D PROJECTS

John M. Tuohy, Nathan H. Hurt, Daniel Quinn and Jose Capote
IDM Environmental Corp.

ABSTRACT

There exists a world-wide market for the re-utilization of surplus plants, equipment and materials. The effective integration of asset recovery strategies in conjunction with facility D&D projects provides a number of very significant benefits: 1) the proceeds generated by the sale of surplus assets can be directly applied toward funding the D&D project, 2) the salvage of surplus equipment and materials significantly reduces the volume wastes requiring disposal, 3) the relocation of surplus plants can provide unique opportunities for site re-development and re-industrialization. This paper describes several recent examples of IDM's innovative approach to the decommissioning of industrial facilities, involving the integration of asset recovery and plant relocation strategies as essential elements of a comprehensive D&D strategy.

DISCUSSION

During the last several years there has been an increasing movement toward turnkey environmental remediation and facility D&D services in which asset recovery has been integrated at both government agencies and some of the world's largest and most prestigious companies. Today, markets are developing for what was previously viewed as waste or even a liability. IDM Environmental Corporation is a full-service company capable of providing this integration because its decontamination, demolition and plant relocation services are accompanied by an in-house asset recovery group specializing in the marketing and sale of scrap metal, surplus equipment, and even complete plants.

The relocation of manufacturing process facilities is a relatively new phenomenon in modern progressive countries but one that is occurring more frequently. It is a service that has a very bright future as the viability and advantages of moving an existing facility become more apparent to end users of these facilities. A surplus plant can be purchased, dismantled, transported, and re-erected for a fraction of the cost of a new plant. The plant can also be reconstructed in a much faster time than it would take to build a new plant. Here are just a few advantages of plant relocation:

• The design work is already complete. In many cases, numerous man years of engineering is obtained literally free of charge. Also, in most instances, no licensing or royalty fees are associated with purchase of the facility.
• These plants have already been operated. Any original design problems have been resolved and usually improvements made even to those areas that worked properly. The technology and equipment have already proved successful.
• Typically, a used plant can be purchased, refurbished, dismantled, transported, reerected and started up for substantially less than the cost of new plant. A used plant can be reconstructed in about one third to one half the time as it would take to build it new.
• The optimum method of operation has already been determined and is usually available in the form of an operation's manual. This is the result of years of trial and error experience that does not have to be duplicated.

The first major relocation of a process facility occurred in 1971-72 when IDM moved two ammonia facilities from two different U.S. locations and combined them at a third location for Errol Beker, a leading entrepreneur in the fertilizer industry. Beker was able to envision the feasibility and economics of moving and combining these facilities. The relocation was such a unique business concept that it was featured in Fortune magazine. The highly successful project triggered a number of plant relocation ventures in the 1970's including polystyrene, methanol refining, oxygen, paper, oxalic acid, and nitric acid plants.

Several examples of current reuse and relocation of facilities can be cited.

1. The most recent is the relocation of a 1,400-ton-per-day ammonia fertilizer facility from the U.S. to Pakistan. The scope of work was very comprehensive and included these services:

• Engineering was provided to verify all drawings and diagrams and update the drawings to reflect "as built" conditions. Matchmarking of the entire facility was done. The plant was re-erected using the existing footprint for configuration.
• The entire plant was dismantled using a modulized technic. This allowed for fewer cuts and expedited the re-erection phase. The equipment, steel support structures, and piping were water blasted at the site providing for a significant reduction in costs as opposed to sandblasting. The equipment was primed and painted. Compressor, turbines, instrumentation, pressure relief valves, control valves, and motor control centers were sent to shops for refurbishing. All pressure vessels were tested for corrosion and stress to ensure operational integrity.
• The entire plant was sent as break bulk cargo. Large equipment pieces were skidded or cradled. for the heavy lifts, saddles were specifically designed.
• Inland transportation involved the movement of "light" cargo directly to the Port of Lake Charles from the plant. Equipment was marshalled there for subsequent loading to the ocean vessel. The Port could not handle cargo in excess of thirty tone, so heavy cargo was marshalled on the banks of the Calcasieu River where it was loaded to barges for delivery alongside a heavy lift ship at the Port of Lake Charles. All export documentation and the ocean transportation to Karachi, Pakistan, was provided.
• Matchmark documentation on drawings and line lists, packing lists for each crate or skid, photographs with matchmarks and descriptions, and videotape of the facility during all phases of dismantling was furnished. Supervision and engineering was provided for re-erection. Local labor did the erection.
• The total cost of the services provided was $25 million.

2. In 1994, Penco of Lyndhurst, Inc., declared bankruptcy forcing the closing of a specialty chemical plant. All equipment, machinery, vessels, tanks, and process piping were left in place, many still containing hazardous and non-hazardous solvents. The decontamination and demolition of this plant site was done under a lump-sum contract. All solvent lines were purged and flushed, and all vessels were drained and cleaned. Solvents that were encountered during decommissioning included toluene, acetone, cyclohexane, heptane, emthanol, ethanol, isopropyl acetate, sulfuric acid, nitric acid, chloroform, chlorinated esters, other chlorinated solvents and amines, hydrochloric acid, and dimethyl aniline. The equipment recovered and reconditioned was sold for more than one million dollars.
3. A 50 MW cogeneration project is being developed in an economically depressed area near Lisbon, Portugal. The approach is to, in partnership with a local economic development agency and the local electric utility, take rights to an idle 15 MW power plant at this site, expand it to a 50 MW plant by relocation of a refurbished combustion turbine and a recovery boiler, and then operate the plant under a long-term power sales contract with the local utility.
4. A Foreign Equity Joint Venture is being carried out with a State-owned paper manufacturing firm in the People's Republic of China that will own and operate a relocated fiber board manufacturing facility and is a minority partner in a 1 million ton per year cement manufacturing plant in the Philippines utilizing a relocated pre-owned plant.
5. Another joint venture is a partnership with a leading Engineering and Management Consulting firm in Europe. An integrated D&D and re-industrialization program is being developed for the decommissioning of a large power plant complex, built by the former East-Block government, that was shutdown in the early 1990's. A major element of this project involves the development of new commercial business enterprises at the site, including a "Mini-Mill" for recycling scrap metal into rebar (to supply the growing new construction market in Central/Eastern European countries) and a recycling facility for scrap tires, "auto-fluff" and other solid wastes utilizing a proprietary gasification technology from Global Waste and Energy.

At DOE sites there is a rapidly developing practice of integrating site cleanups with facility re-industrialization and economic development. The Department of Energy (DOE) Oak Ridge K-25 site is a most prominent example. The gaseous diffusion process for the enrichment of uranium has been out of operation since 1985. Parts of the facility since then has been used for other purposes but by and large the surveillance and maintenance costs have been a massive drain on government funds and estimates of overall cleanup were in billions of dollars. DOE Oak Ridge through its Vision 2010 program has made available to private industry valuable assets for sale or lease. Reusable or salvageable equipment and approximately 450 thousand tons of recyclable metals such as steel, nickel, copper and aluminum will help defray the costs of cleanup. The program was kicked off in April, 1996. Already some facilities have been leased, other leases are being negotiated and there is a continuing strong interest being shown by several other industrial firms. Also, negotiations are underway between DOE and a consortium headed by BNFL whereby three of the process buildings would be turned over to the consortium, who would dismantle the process systems to reclaim approximately 300 thousand tons of metals thereby effecting large savings of funds. A major goal, also, through the re-industrialization is the creation of new jobs for those losing jobs as the DOE Oak Ridge facilities reduce their forces.

There is a recent example of reuse of material to offset the cost of dismantlement and disposal at the Y-12 plant in Oak Ridge. An advanced toroidal facility was dismantled under an arrangement whereby the cost of dismantlement and the revenue from the sale of the materials was shared thus minimizing the plant budgetary requirements.

In summary, the re-utilization of surplus plants and equipment is rapidly becoming the obvious choice for private companies and governments who desire to enter a new manufacturing market or to increase output for an existing market. The key ingredient for a successful re-utilization is a contractor who can provide the full scope of work from decontamination to dismantlement or demolition and asset recovery.