Each country has its own regulations which define the process required to receive approval to construct LNG facilities. Some countries have very well defined processes whereas others have limited, if any, definition to their processes. Even the countries that do have very well defined processes and regulations on how to receive a permit may have very limited guidance documents which assist developers or owners to transition from permitting to execution phases.
This article describes a generic case study on the successful transition from permitting to execution for an LNG export terminal developed in the United States (US) through the Federal Energy Regulatory Commission (FERC). While this article will use the US as an example, the framework and fundamentals of this approach are applicable to successful transition from permitting to execution in other countries around the world.
To begin, an applicant must submit a design to the FERC to initiate the permitting effort. FERC will review the application and if deemed acceptable, will issue an Order which is provisional and will include conditions related to: environmental, safety, design, reliability, operability, and maintainability of the proposed facility.
As part of the conditions to the Order, much of the information that a developer submits during the permitting phase will need to be re-submitted again at a detailed design level with a request for FERC to approve construction. While a developer may have a permit in hand, there may be dozens of other FERC submittals required before the developer finally has full authorization to construct the entire project.
Compliance with conditions in a FERC Order presents significant risks for developers after receiving a permit, and some of these risks include much higher financial impacts than during the permitting stage. The solution to mitigating these risks? Proper Implementation Planning.
So what is Implementation Planning?
Implementation Planning should be thought as the transition from permitting to execution. Developers and owners need to recognize that delaying Implementation Planning to much later stages during permitting could have a direct impact on the execution phase of the project and could result in their project scrambling to pick up the pieces once they realize they are behind the curve.
In its early stages, Implementation Planning is connecting the dots between conditions in the FERC Order, the required government approvals for construction, and the EPC schedule. Ideally, the developers will put together an Implementation Plan Team (IP Team) consisting of representatives from the developer, representatives from the EPC contractor, representatives from legal counsel, representatives knowledgeable about environmental aspects and the engineering design of the project, and representatives knowledgeable of the permitting effort and future permitting requirements for the project.
Implementing the Plan
The next step is for an owner to develop an Implementation Plan with:
Monitoring changes is one of the more difficult and complex tasks for the IP Team. Even when a design reaches an ‘Issued for Construction’ state, changes still occur. Some of these are the result of HAZOP or LOPA activities, vendor information, and equipment or field changes.
With proper Implementation Planning, overall execution schedules will be obtainable, changes will be successfully managed, and projects will meet schedules and successfully move to in-service.
Share your insights and join the conversation: What would you identify as the greatest benefit of Implementation Planning? Leave your comment below.
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Image courtesy of CH-IV International
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