Sale of Invensys Rail to Siemens

Proposed disposal of Invensys’s Rail Division for £1,742 million, agreement with Trustee of Invensys’s UK Pension Scheme, proposed £625 million return of capital and strategy for the more focused continuing Group.

• Invensys agrees to dispose of Invensys Rail to Siemens for £1,742 million
• Agreements with Trustee of Invensys’s UK Pension Scheme to provide the Company with a long term pension solution and increased financial flexibility:
o Up-front payment of £400 million, and
o Payment of £225 million to a trust
• Proposed return of cash to Shareholders of £625 million (approximately 76 pence per share)
• Creates a more focused industrial software, systems and control equipment business with significant exposure to higher margin and higher growth markets, and funds to invest in them
• Significant run-rate cost savings of £25 million per annum by the end of FY2014 based on a simplified organisational structure
• Completion expected in second quarter of calendar 2013 conditional on Invensys shareholder approval, UK Pensions Regulator approval, certain anti-trust consents and lending bank approval.

In view of its size, the proposed disposal constitutes a Class 1 transaction for the purposes of the Financial Services Authority’s Listing Rules and therefore requires the approval of Invensys shareholders in order for it to be implemented. A circular containing further details of the proposed disposal and containing the notice convening the General Meeting will be sent to Invensys’s Shareholders as soon as practicable.

Wayne Edmunds, Chief Executive of Invensys, commented:
“Following a strategic review which highlighted the likely consolidation in the global rail signalling market and the limited scope to increase the size of the Invensys Rail business, we have decided to refocus the Group around our industrial software, systems and control equipment business and, accordingly, to dispose of Invensys Rail.
“Invensys Rail has made significant strategic progress over the last five years and this is reflected in the disposal price of £1.7 billion, which we believe delivers attractive value for our Shareholders and also reflects Siemens’s ability to maximise the division’s potential.
“As well as providing Shareholders with an immediate cash return, this transaction enables the Group to create a long term pension solution and therefore increased financial flexibility going forward. The agreements we have reached with the Trustee of the Invensys UK Pension Scheme for the £400 million contribution and the £225 million Reservoir Trust will result in the cessation of the current deficit reduction payments of £40-47 million per annum and we anticipate that no further contributions will be payable into the Scheme.
“This transaction creates a more focused industrial software, systems and control equipment Group with a significant exposure to higher growth and higher margin segments and the resources to invest in them. It also allows us to make substantial cost savings through a simplified organisational structure.”

Honeywell introduce a new DP range, the SmartLine transmitters

Honeywell Process Systems, at the EMEA Honeywell User Group meeting in Istanbul this week, launched a new range of industrial pressure transmitters, the SmartLine range, which will enhance communication abilities, improve operational efficiency and reduce lifecycle costs for process manufacturers.

In industrial process plants, field devices that measure pressure, flow and level are used throughout the manufacturing process to support safe and efficient production.  Large industrial complexes, such as those for refining crude oil, can have thousands of these devices to support their manufacturing processes.

Honeywell SmartLine pressure transmitters make it easier to support field devices and promote plant reliability with their unique efficiency-enhancing features, such as a graphic display capable of showing process data in graphical formats and communicating messages from the control room.  SmartLine transmitters also feature modular components to simplify field repairs and reduce inventory required to make those repairs. [In other words you can swap out all the internal modules live, on plant].

“SmartLine is designed to provide the lowest total cost of ownership at every point in the project lifecycle to help customers’ operations be more efficient, their process more accurate and their plant more reliable,” said Don Maness, VP Field Products, Honeywell Process Solutions.“Honeywell introduced the first industrial smart transmitter in 1983 and have since supplied millions of smart transmitters around the world. To build on this legacy, our latest generation was designed with input from our customers and distributors.”

The new display supports graphical process data in easy-to-read trend lines and bar graphs while also providing a unique platform for operator messages, comprehensive diagnostic warnings, and loop status for maintenance.  These capabilities are part of the transmitter’s Smart Connection Suite, and allow control room operators to send messages to the display to make it easier and faster for field operators to identify the correct transmitter and determine required maintenance tasks.  And, when integrated with the Honeywell Experion Process Knowledge System (PKS), the transmitter can also display its maintenance mode – telling field operators in plain language messages if the control loop is in a safe state to perform maintenance.  Even installation is made easier with this new display.  Three-buttons at the top of the transmitter are used with the graphic display to completely configure the transmitter with no external handheld devices required.

The modular design streamlines maintenance by allowing replacement of individual transmitter components instead of the entire unit, even in hazardous locations. This design reduces plant lifecycle costs by providing purchasing flexibility, lowering inventory costs and reducing maintenance and repair work.

“SmartLine offers a number of unique benefits to customers,” Maness said.  “It exceeds industry norms for accuracy, response time, turndown and stability.  It provides the lowest lifecycle cost by leveraging a modular design for configuration, installation, upgrades and maintenance.  It communicates to all automation systems through open communication protocol modules and is even more tightly integrated with Experion PKS and legacy DCS customers.   Lastly, we designed it for the instrument technician to make it simple to configure with an easy-to-read display and without the need to use a field calibrator or to open the housing itself.”

Other safety and efficiency features include enhanced security alerts and wiring polarity insensitivity.  Tamper reporting alerts the control room and records any change in the transmitters’ configuration or write protection setting to allow operations to investigate any unauthorized access.  Unlike most other transmitters, SmartLine transmitters cannot be damaged by reversed wiring polarity and will function correctly if connected as such. This protection significantly helps during a plant startup, when time can be wasted locating and repairing incorrectly wired devices. 

Honeywell’s SmartLine pressure transmitters are available now.  

What this didn’t say is that the SmartLine unit is much more compact and weighs far less than previous Honeywell DP transmitter ranges, making the units far easier to install on large plants and at elevated positions! The initial offering allows ISA100 wireless communications via an adaptor, but later models will build in wireless communications capabilities.

“Buncefield – Why did it happen?”

The causes underlying the Buncefield accident, on 11 December 2005, were not quoted in real detail in the several initial reports published, and even in the final report of the Major Incident Investigation Board, issued in 2008, basically because of the impending legal proceedings against several of the companies involved. Sentence was passed on the Defendants on 16 July 2010, with fines and associated costs charged to them of around GBP8.5m. Following that the issue of the Health and Safety Executive COMAH summary report “Buncefield – Why did it happen?” tried to summarize the details of the story. You can see this report on www.hse.gov.uk/comah/buncefield/buncefield-report.pdf.

What was more interesting was to listen to a recent presentation to the InstMC Wessex Section by Colin Howard, of Istech Consulting in Teesside, a company he founded in 2001 after a 35 year career with ICI, and various other roles in C+I, QA and safety. Introducing Mr Howard as a Past President of the Institute of Measurement and Control, and as a soon-to-be Honorary Fellow of the same, Graham Dunkley, Chairman of the Wessex section of InstMC explained to an audience of well over 100 engineers  at the National Motor Museum at Beaulieu that Howard had been the “Expert witness to the Court” in these Buncefield prosecutions: this is an impartial advisor to the Judge – and the Jury – on the technical aspects being discussed in the presentations of evidence to the Court.

Background to the operations

The detail was that the 6000m3 tank receiving the pipeline delivery of 8400m3 of heavy gasoline containing 10% butane inevitably overflowed, by around 300 tons / 250,000 litres, because the operational system in use covering this part of the site relied on high level alarms from the tank level gauging system to tell the operators to switch over to another receiving tank. This level gauging system failed, as it had done 14 times in the previous 3 months, but the operators did not have a display of the tank level visible (which would have shown a static level): the single screen display available to them was devoted to showing a different tank. The independent high level alarm (IHLS), a spring-supported magnetically actuated reed switch driven from a weight on the floating roof, also failed.  This was of an early 1980s design, and the failure was because the padlock holding the maintenance test arm on this switch had not been refitted after use, and therefore did not hold the self test arm in the correct place. The test arm dropped, making the relay move in relation to the end stop, and prevent the magnet reaching the reed switch. In the manual it stated “Fit the padlock for security”, which did not indicate that the padlock hasp had to be 5mm dia +/- 0.1mm, and that any different size would make a malfunction possible, and that this padlock played an essential part in the functioning of the level alarm system. It seems that most other sites using this system have also lost or replaced this padlock with their own unit, not of the required size.

At Buncefield, when delivery drivers reported to the control room that there was a dense cloud of fuel vapour around the tanks – the butane had vaporized when dropping over the edge of the tank in a spray – the operators pressed the Emergency Shut-Down button on the system – use of this was meant to close all tank side valves: but there was no software associated with this button. Later it was shown that of the five security levels in the software only one level was used, and everyone had access to that. While there was no procedure written down for the tank filling activity – a point missed during a recently completed DNV assessment and review of the site procedures – the operators knew that they had to phone Birmingham to have the operators there stop the delivery of the gasoline down the line: they had to use the normal commercial phone land-lines, they had no control system feature that could halt the inflow on site at Buncefield.

The operators did have a Fire Alarm button, which would start the firewater pump to cover the tanks with water, and protect them from the heat of any fire. However, pressing that led to an immediate vapour cloud explosion, probably ignited by a spark from the pump itself: it measured 2.4 on the Richter scale. The fire burned for several days, and the bund walls, another essential safety feature, showed themselves to be inefficient, and leak: the tertiary containment was inadequate. Fire suppressants and fuel leaked into the groundwater around the site.

The fines imposed

The fines imposed were a total of: Total (UK) Ltd GBP2.6m, Hertfordshire Oil Storage Ltd (HOSL), a Total subsidiary, GBP 1.45m, British Pipeline Agency Ltd (BPAL) GBP300k, Motherwell Control Systems 2003 Ltd GBP1k and TAV Engineering GBP1k. In this, apparently it was recognized that larger fines for these two instrumentation companies would threaten their commercial future. Initially some press reports suggested the high level alarms were Cobham float switches, but while Cobham float switches were common on this site, none were involved in this accident. This business has subsequently been sold by Cobham, to AMSensors Ltd.

Howard further commented that these overfill hazards are common occurrences, and over the last 30 years six similar events have been reported. Since Buncefield, there have been two further such events. He comments that in August 2003 Buncefield had a near miss – a dress rehearsal for the December 2005 accident. Then, the IHLS failed, but it was not replaced until April 2004!

What did the Judge say?

The Judge said all the things you would expect. But most relevant was the response to the defence offered by the main operators on site: their defence was that they had sub-contracted level gauging and alarm system maintenance, that they had subcontracted the safety and procedures audit, or in the case of HOSL, it had subcontracted all operational matters on site to Total (UK). In other words they said “It wasn’t our responsibility, we told them to do it!” The Judge ruled that it was not legally possible to pass on (ie sub-contract) such responsibility. “The core of a major hazard business should be clear and positive process safety leadership and board level involvement and competence to ensure that major hazard risks are being properly managed.” It was also noted that “Routine operations are often those in which lax habits are most likely to develop”. The summary report quoted above gives many more such comments.

What did Howard say?

The small comments, maybe of detail, from Colin Howard, were in a way more interesting. The whole site had been split into separate companies, and a perimeter fence built half way across the area covered by a control system: so the half of a system left with the operators of the BPA pipeline was not really adequate. The operators did not like the fact that they had no control over the delivery system, and indeed did not have a flow measurement indicator for that delivery line: during the delivery that caused the overflow, from 1850 hours on the Saturday night, the flow rate was around 550m3/hr: shortly before the accident the rate of flow increased to around 900m3/hr, without the knowledge of the operators, when other off-takes further down the line were ceased.

The IHLS supplied by TAV to Motherwell Control Systems to replace the alarm on this receiving tank was poorly specified (in April 04), and was of a different design: possibly the original design had been upgraded. It had a dual function test lever, for high or low level alarm. There were no MOC procedures in place to check the implications of this, for performance or maintenance procedures, even if there were such maintenance procedures available (this was not specified, but there were no written procedures relating to the tank filling operation). One supervisor did request the fitting of a back-up, second IHLS.

The staff on site were under pressure to increase throughput, possibly by dealing with higher volume deliveries where tank capacity was at a premium – and they were doing excessive overtime: with high staff turnover, their competencies and experience were open to question.

Will it happen again?

Howard commented that since Buncefield, there have been two further similar overfilling events. There are 60 sites of this type known around the UK, and the Process Safety Leadership Guide entitled “Safety and environmental standards for fuel storage sites” that is considered mandatory has seen patchy implementation across these sites: some have a schedule, and plan to conform only by 2014.

HVDC transmission moves closer with new ABB breaker

ABB has announced a breakthrough in the ability to interrupt direct current, solving a 100-year-old electrical engineering puzzle and paving the way for a more efficient and reliable electricity supply system. After years of research, ABB has developed the world’s first circuit breaker for high voltage direct current (HVDC). It combines very fast mechanics with power electronics, and will be capable of ‘interrupting’ power flows equivalent to the output of a large power station within 5milliseconds – that is thirty times faster than the blink of a human eye.

The breakthrough removes a 100-year-old barrier to the development of DC transmission grids, which will enable the efficient integration and exchange of renewable energy. DC grids will also improve grid reliability and enhance the capability of existing AC (alternating current) networks. ABB is in discussions with power utilities to identify pilot projects for the new development.

“ABB has written a new chapter in the history of electrical engineering,” said Joe Hogan, CEO of ABB. “This historical breakthrough will make it possible to build the grid of the future. Overlay DC grids will be able to interconnect countries and continents, balance loads and reinforce the existing AC transmission networks.”

The Hybrid HVDC breaker development has been a flagship research project for ABB, which invests over $1 billion annually in R&D activities. The breadth of ABB’s portfolio and unique combination of in-house manufacturing capability for power semiconductors, converters and high voltage cables (key components of HVDC systems) were distinct advantages in the new development.

HVDC technology is needed to facilitate the long distance transfer of power from hydropower plants, the integration of offshore wind power, the development of visionary solar projects, and the interconnection of different power networks. ABB pioneered HVDC nearly 60 years ago and continues to be a technology driver and market leader with many innovations and developments. With over 70 HVDC projects, ABB accounts for around half the global installed base, representing an installed capacity of more than 60,000 megawatts (MW).

Deployment of HVDC has led to an increasing number of point-to-point connections in different parts of the world. The logical next step is to connect the lines and optimize the network. ABB is already working on the construction of multi-terminal systems and the latest DC breaker innovation is a major step in the evolution of HVDC grids. In parallel to the new hybrid breaker development, ABB has an established HVDC grid simulation center developing solutions for future DC overlay grid operations.