The demands on the Oil & Gas Industry to optimize cost, while maintaining quality and ensuring the highest levels of HSE delivery have never been greater.
‘Business as usual’ is not an option. Innovative and robust project delivery options need to be identified. One technique gaining credibility is off-site fabrication of pre-assembled units and modules that allows owner companies to work around the high cost or lack of skilled labour in remote locations and space constraints on sites. Construction can start if work or environmental permits are still in progress or delayed.
In recent years there has been a significant rise in modular construction. In 2014, 60% of projects over US$15m used a modular approach on some scope.
Project Execution Planning Is Key: The decision to modularize is a key project execution decision, to be made as early as possible, to allow the design to progress efficiently. The best projects have selected the modular strategy when engineering was less than 7% complete. A common mistake is to engineer the plant and then try to modularize it. Key factors influencing the decision include:
To be successful, modular projects require significantly better project practices, using more frequent constructability reviews and better project controls. A master overarching schedule is needed and a detailed level four in the fabrication yard to which the fabrication team should be held accountable. Planned sail-away dates need to be achieved and modules that are 100% complete need to be loaded.
Modular Construction Yards: The selection of the fabrication yard and its past performance, should be carefully considered using a weighted scoring system, such as KT Analysis. Deploying an experienced leadership team into the yard at the outset will help ensure maximum weight for lifting on the final site is adhered to and will resolve fabrication design errors or changes in an efficient manner, thus avoiding increases in project costs. Robust management of quality and record keeping is important and improvements in software reduce the cost of inefficient document management.
Companies and their yards must agree to realistic schedules and pragmatic sail-away dates. The pressure to accept a critical path that suits investors is not un-common. This leads to the modules being shipped with too much carry-over work for completion on site. Best practices during fabrication phase now include incentivizing the fabricator to achieve results in quality and schedule, pre-commissioning and system testing.
Summary: Strong leadership and decision-making is essential, companies must deploy commissioning teams into the FEED phase and maintain an ongoing presence. The question to ask is: how will the plant be commissioned; and what build sequence and utilities will achieve this?
Risk assessment and management processes are mandatory, with frequent constructability reviews. Successful projects will be achieved through ensuring the schedule is achievable and the sail away date can be met.
If a modular execution methodology includes total Quality Engineering Principles, HSE outcomes will be improved and stakeholder value maximized. The proposed development costs can be significantly lowered for major new builds. The end result for our industry will be greater confidence in sanctioning projects at Final Investment Decision (FID) stage.
Thursday, April 6th 4:30pm - 4:55pm: Luc Morin, Senior Director, Social Responsibility at SNC-Lavalin will be presenting a paper entitled "Local Resource Development Initiative (LRDITM): Creating Shared Value Between Projects and Local Stakeholders" at the Gastech Conference 2017 in Chiba – Tokyo. View the Gastech conference programme and book your delegate place today.
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