Plant builders use new methods to control schedule, boost FEED

Petrochemical and refining owners can significantly improve their front-end engineering and design (FEED) packages if they complement the standard consultant project evaluations with their own in-house project performance criteria, according to Taylor Auburg, project director at Freeport LNG.

New methods to manage schedule and rigorously quantify compliance in house have helped Freeport LNG control the planning, engineering, design and construction of its $10 billion three-train LNG export project in Freeport, Texas, designed to liquefy and export about 14 million tons/year of LNG.

The facility is slated to be completed in 2019.

Though most companies in the industry assess their FEED phase efforts using consultant databases, analyses and benchmarking, Auburg said owners can advance standard practice by taking additional steps to evaluate the quality of the detailed work products in the FEED package.

He said owners should start by identifying the key work products from the FEED phase and specify what should be included in the final deliverables.

This will provide additional direction to the FEED phase engineering contractor early on in the project life cycle and will give a quantified baseline for scoring the quality of the work products in the final FEED package.

This step increases the probability of success coming out of the FEED phase by not only ensuring compliance with the work processes (as assessed by the consultants), but also by making sure the work products meet the requirements of the subsequent project phases.

Managing schedule

Schedule control is also key to controlling project costs. “Maintaining the pace of the project is the most important attribute in determining the final outcomes,” Auburg said.

The industry's normal schedule conventions make managing the project time more difficult, according to Auburg. Level 3 Schedules can reach 300-500 pages, which are hard to digest and are rarely read as most project teams rely on their schedulers to tell them what they need to know.

The engineering and construction sections typically follow a common format that breaks down the work in each process or utility unit by discipline or craft. Project teams can still follow the sequence of events from engineering through mechanical completion, even though they are separated by as many as 200 pages of procurement activities.

Yet, according to Auburg, the conventional structure of the procurement and subcontracting activities hampers the project teams' ability to follow the trail as procurement and contracts are typically based on different units from the engineering and construction work efforts.

Auburg said coding the procurement of the major deliverables by the same units used in the WBS for engineering and construction will allow project teams to see all aspects of the delivery of a process unit on no more than 3-5 pages.

This will also simplify the transition to the completion phase based on process systems in the commissioning phase, Auburg said.

Project performance

Almost two thirds of the major capital projects in the United States do not meet their budgets and schedules, and most industry executives are not happy with the performance of their systems, according to strategic consultancy Asset Performance Networks (AP-Networks). which services oil, chemical and energy companies in the Americas, Asia, Europe and the Middle East.

The company’s analysis shows that traditional project governance and assurance processes are often misreporting the true state of front-end loading (FEL), and are often one of the key factors for poor project performance.

Some 72% of more than 800 capital projects (over $25 million) in AP-Networks’ database executed since 2002 have failed to satisfy all of their performance goals (+/10% of budget, +/- 10% of planned schedule and no major operability failures after start-up).

One in four projects in the firm’s database grossly exceeded one or more of their success criteria metrics, meaning that they either overran their budget or schedule by 30% or had a major operability failure that prevented them from achieving steady operations.

Moreover, more and more capital project work is now being executed during turnarounds, Shawn Hansen, manager capital project consulting at AP-Networks, told Petrochemical Update.

Capital intensive turnarounds are particularly challenging in today’s market environment.

AP-Networks’ database of medium and high-complexity turnarounds executed since mid-2012 in the onshore and offshore upstream, gas, refining, chemical, and power sectors shows that 32% were successful while 68% failed to meet their project goals (including 40% that AP-Networks categorized as “train wrecks”).

To learn about other project execution & management strategies and case studies from some of the major owners on the US Gulf Coast, read Petrochemical Update's Beyond Best Practice: Improving the Predictability & Outcomes of US Petrochemical Projects whitepaper.