Proposal of a new approach for the asset replacement period in the natural gas distribution industry

Asset management is a key element for natural gas distribution companies. In order to ensure the optimal plant organization, the optimization of maintenance activities for all the elements of the network must be matched by the identification of their best replacement moment. In this way, in fact, it is possible to reduce the total management costs while necessarily keeping a high efficiency and effectiveness for the network and a time-sparing strategy of the unavailable periods. There are some key elements to define the replacement time of every asset of a plant. First of all, the natural gas distribution industry has its own specific return on investment since it is payed by users for the gas distribution service. Secondly, according to the new tender procedures (for a period of twelve years), the existing plants value depends on the VIR index, as defined by National Authority of Gas. In consequence, the identification of the best management strategy for a plant in the twelve years reference period needs specific analysis considering all these elements: for each asset it is essential to evaluate if its substitution might be appropriate or not, and which is the best change-over year. This paper presents an analytical model for the identification of the best renewal strategy for natural gas distribution plants. The proposed model was validated through a case study applied to a final reduction group, to its housing and finally to both of them. The related results show that the best change-over year of an asset could be different from the last year of its amortization, and that its correct identification allows economic benefits. This tool complies with applicable regulations and allows easy reading of the results in terms of optimal asset management strategy. Future developments are the integration of this approach in the company CMMS and ERP, in order to fully exploit its potentialities.