The United Arab Emirates

Transcription

1 Interface management in complex projects Managing the interface between contractors, owners and a host of authorities and affected groups is vital to the success of large and complex energy projects Richard Collins and Robert Durham Foster Wheeler Raafat Fayek and Walid Zeid GASCO The United Arab Emirates (UAE) has been progressively expanding its oil and gas production for decades, and has ambitious plans to continue to do so. However, as projects have become larger and more complex, and some of them are extensions to existing facilities, there has been a vast increase in the array of interactions between the respective projects, the existing facilities and the infrastructure and third parties upon which they both depend and on which they impact. These interactions, if not managed effectively, can lead to major difficulties at both macro and local planning levels. Foster Wheeler, an engineering, procurement and construction contractor (EPC), is active in the design and execution of major projects throughout the Middle East region and globally, and has provided management services to several of the larger projects in Abu Dhabi at Habshan, Asab and Ruwais. This article outlines some of the challenges with key interfaces and interdependencies that were encountered in Abu Dhabi, together with the actions taken to manage them during the implementation of these large and complex projects. Working closely with the GASCO management team, interfacing activities with parties such as Abu Dhabi National Oil Company (ADNOC) for health, safety and environment (HSE) studies approvals, the Supreme Petroleum Council to obtain project approvals, and working with ADNOC management, other ADNOC operating companies, EPC contractors, Abu Dhabi Water & Electricity Authority (ADWEA), municipalities, forestry commission, local highways authorities, the Petroleum Port Authority at Ruwais, Port Zayed at Abu Dhabi, Critical National Infrastructure Authority, police, and so on, have all had their challenging moments. This experience has provided an extensive insight into the way in which these interactions work in Abu Dhabi, and lessons learned regarding the critical success factors in making these interactions function well. In summary, this article provides a case study which demonstrates that good interface management is vital to the successful delivery of large, complex projects. Ruwais Figure 1 Overall facilities block diagram GASCO projects In 2001, as part of its ongoing development programme for oil and gas production in Abu Dhabi, ADNOC instigated a major project to recover and process additional quantities of oil and gas from its existing reserves. The project was known as OGD-III/AGD-II. A pre-feasibility study resulted in the definition of a suite of five separate, but closely integrated, projects interconnected to existing facilities at Habshan, Asab and Ruwais (see Figure 1). While the five new plants would ultimately be owned and operated by three of ADNOC s subsidiaries namely, Abu Dhabi Gas Industries (GASCO), Abu Dhabi Company for Onshore Oil Operations (ADCO) GASCO OGD III Asab Habshan PTQ Q

2 and Abu Dhabi Oil Refining Company (TAKREER) GASCO was given the lead role in developing and implementing this overall project, with support from its two sister companies. Package definition was allocated on a geographic basis, taking account of eventual asset operatorship. The final split of major packages is shown in Table 1. Together, these projects represented a total investment in excess of $5 billion on a 2005 cost base. A contract was awarded to Foster Wheeler in December 2001 for the provision of project management consultancy (PMC) services to assist GASCO in developing the OGD-III/ AGD-II suite of projects. The feasibility study was undertaken by Fluor in the US, and the front-end engineering design (FEED)/project specification was completed by Bechtel in the UK. Throughout these early stages, staff from GASCO and the PMC were based in the respective contractors offices to provide management and general review/approval of the work as it proceeded. Support was provided as required by visits from ADCO and TAKREER management teams. FEED stage development Identified need for an interface manager As can be seen from the highly integrated flow scheme and multioperator scenario, there are substantial technical, physical, logistical, commercial and organisational interfaces between the various elements of this project. Management coordination of the extensive and diverse nature of these interfaces was recognised as being critical to the overall success of the project. In May 2003, the position of interface manager was established to provide a single focal point. In addition to inter-project interfaces, it was soon perceived that each of the five individual EPC project packages not only had its own intra-project interfaces, such as tie-ins to existing facilities, but each also had extra-project interfaces in relation to other independent projects in their vicinity, including local infrastructure systems. Local and national approvals were Project package description Responsible operating company (OPCO) 1 OGD-III Upstream (OGG & I) Gas gathering and sour gas ADCO injection facilities for OGD-III 2 OGD-III Onshore gas development phase III GASCO condensate and NGL recovery and NGL pipeline 3 AGD-II Asab gas development phase II NGL recovery and pipeline GASCO 4 Train III GASCO Ruwais expansion 3rd NGL GASCO fractionation train, storage, jetty and berth 5 Condensate tanks TAKREER Ruwais condensate tankage and tie-ins TAKREER Table 1 Allocation of project packages progressively required to document and sanction the identified impacts at every stage of each project s development. While the general requirements for the function were known by many, the initial task for the interface manager was to define the role and optimum strategy for its successful implementation. With such a range of possible strategies, it was important to agree and document the balance of scope, responsibility and resources to be provided to support the position of interface manager within the established project teams. Alternative strategies were defined, complete with resource assessments, for review with GASCO. The selected strategy required that the interface manager would work within the overall project team and utilise existing personnel and services to support his work. Interface execution plan The project execution plan for both the FEED and the EPC stages had already been defined. However, specific considerations relating to planning of, and responsibilities for, interface coordination within, between and external to the various projects were incorporated. These related to all project phases, from initial site surveys through commissioning to operation and final plant acceptance. The concept selected required that the EPC contractors would have the prime responsibility to coordinate and manage their respective interfaces. However, the GASCO/ PMC team would provide support, facilitate contact with the respective authorities and generally monitor the interface activities and drive these to a successful conclusion. Primary interfaces and inter-dependencies With the execution strategy agreed, a list of all the possible projects and tasks that could potentially affect, or be affected by, the various individual projects, was identified and agreed. An initial list of about 15 projects formed the original basis of the assessment. By the end of the FEED stage, more than 30 projects were listed and many others were added during the life of the EPC phase execution. Interfacing projects were defined as either: interdependent, where there would be direct interface for instance, physical tie-ins; or parallel, where there would be no direct interface, but where the potential for interference, such as access to site, could not be discounted. A tabulation of these projects was established, together with key reference data, examples of which are shown below. These were reviewed and updated monthly, with any new data being progressed through the information chain so as to enable review for any 28 PTQ Q

3 Interdependent projects (example) Project Contact scope Affected scopes Scheduled completion interface issues S/S9 Project manager, New substation Provides power Oct Responsible company/contact: GASCO Project 6404 GASCO at Ruwais supply to 3rd NGL Level 0 2 Extent of workscope: available as EPC including new SCMS train at Ruwais schedule available enquiry spec EPC award Dec 03 3 Schedule for undertaking work conditions/limitations/risks: draft schedule in tender documents 4 Interface points (responsibilities for location, design, construction, commissioning): new switchgear/tie-in to new SS9; cable route accessibility 5 Construction plan: awaited Table 2a possible impact on other projects. Monitoring and reporting in-country developments Identification of ongoing and future projects and their potential impacts was essential. The GASCO project team, with input from ADCO and TAKREER, provided a wealth of knowledge regarding potential interface projects. However, it was not until a tour of all the plant sites at Habshan, Asab, Ruwais and the interconnecting pipelines route was complete that all of the smaller, more obscure projects were identified. The project listing was considered a live document. Existing projects changed through their lifetime and new projects were regularly added, reflecting the ambitious development plans of a dynamic country. Throughout the FEED stage, the PMC had resident site coordinators at each of the three GASCO sites at Habshan, Asab and Ruwais. These multitasking engineers provided a point of contact at the sites to supply the interface manager with information, including GASCO site management views regarding key interfaces and any potential problems associated with them. Optimal locations of tie-ins, pipe and cable routings were all facilitated by these site coordinators. Once interface projects were identified, their characteristics were investigated and an assessment of the impact risks they might have on each of the major projects documented. Planning for the interfaces When interface projects were identified, the interface manager: Liaised with all relevant parties to establish the schedules for all such interface projects and reviewed these in the context of the schedules for the individual scopes within the OGD-III/AGD-II project Identified the potential impacts in addition to schedule on this project of all the interfacing projects Ensured the FEED engineer identified and incorporated all intraproject interfaces and tie-in points for inclusion in the EPC packages Ensured the FEED engineer established proper schedules for the various parts of this project, to show the timing required for interfaces/tie-ins to be completed Identified the formal approval processes, and their timings, as are required for the project through to beneficial operation, so as to schedule these into the overall programme Reviewed the interactions of the multiple project schedules to identify key dates for performing tie-ins and minimise the number of any additional shutdowns necessary for this project to be implemented Arranged for all interested parties to participate in a risk assessment relating to the impacts of the interface projects, and proposed a methodology for monitoring and advising GASCO management regarding the progress of the interface projects and any mitigating actions that might be required as the projects progressed Established a level 1 programme to show all of the interface projects and their potential impact on each of the five projects within the OGD- III/AGD-II programme. To formalise these activities, check Interdependent projects (example) Project Contact Scope Affected scopes Scheduled completion interface issues Liquid Sr project manager, Pipeline from Pipetrack Habshan-Ruwais. Aug Responsible company/contact: GASCO sulphur GASCO Habshan Power supply at Habshan Level 0 2 Extent of workscope: pipeline and power pipeline Project 5204 to Ruwais & Ruwais (S/S 9) schedule available supply scope of requirements available FEED stage EPC award Feb 04 3 Pipe routing: per pipe alignment drawings by study engineer 4 Schedule for undertaking work conditions/ limitations/risks: later, after EPC award 5 Construction plan: later, after EPC award Table 2b PTQ Q

4 lists of issues and criteria against which each of the interface projects would be assessed were established to monitor and report progress on all related issues. Publicity As with all new initiatives, publicity was important to get all people who could assist the initiative to fully understand the need, the objectives, the methodology and the planned benefits. In July 2003, a series of presentations was held in Abu Dhabi for the parties who would most directly influence success. GASCO division and project managers, ADNOC managers and executives, then separately the OPCO managers at Habshan, Asab and Ruwais were appraised of the initiative and encouraged to participate. This effort in making key people aware of, and included in, the activity was crucial to the later success of the interface initiative. High-level workshop Following the publicity tour, the tangible deliverables in terms of project procedures were developed. By January 2004, a high-level workshop was undertaken. More than 40 executives and senior personnel from the relevant companies, covering the full range of business lines, attended. These included ADNOC E&P, ADNOC Marketing, ADNOC Chemicals Directorate, TAKREER, ADCO and GASCO, as well as senior members of the OGD-III/AGD-II project management teams. The workshop comprised a series of presentations on key issues, followed by structured teamwork sessions. Report-back from the team sessions resulted in a range of additional issues that were later correlated, analysed and consolidated into the Interface Management Programme. This workshop presented an ideal forum for the disclosure of potential effects on the project and their evaluation by the attendees, benefiting from their extensive knowledge and experience in the oil and gas business in Abu Dhabi. Land allocations One of the first critical areas of interface coordination was land allocation. This covered the new processing facilities, but also temporary facilities such as labour camps, project offices, fabrication and laydown areas required to realise the project. This temporary land use usually requires a greater area than the permanent facilities. It may seem strange that land in Abu Dhabi can be difficult to allocate. However, parts of the country are inundated with oil and gas wells, and are criss-crossed with pipelines carrying oil, gas and water, high-voltage electrical power lines, occasional roads, tree plantations and settlements. This existing infrastructure can result in Longer term plans to drill additional oil and gas wells may preclude the use of land that appears to be accessible at present significant areas near existing oil and gas processing plants being construed as sterile with regards to further development or even temporary use. To add to existing limitations on land, longer term plans to drill additional oil and gas wells may preclude the use of land that appears to be accessible at present. The infrastructure supporting these plans also has to be considered. In general, land in the vicinity of an existing processing site is allocated to the care and control of the responsible operating company (OPCO) with the largest ownership of infrastructure. Land adjacent to the Habshan plants of ADCO/GASCO is under the care of ADCO, whereas within the Ruwais Industrial Complex land allocation is by TAKREER, the refinery operating company. Land away from the direct influence of the OPCO requires approval by the local and area administration authority and the respective directorates. This can relate to pipeline routings and road crossings, electrical power cable routes, fibre-optic cable routes, cross-country telemetry systems, and so on. Even when the prime party for land allocation has been identified, it is necessary to obtain letters of no objection from any number of other potentially affected parties before submitting a land use request. These may include the regional town and planning department, public works department, buildings directorate, water and power authority (ADWEA), Etisalat, Transco, forestry commission, military authorities and others. It is not unusual to find that one authority will provide a letter of no objection subject to another authority offering no objection. To obtain such approval, the scope and timing of the overall project must be provided, together with details relevant to the specific issue that requires approval. This may be a multistage process, starting with preliminary data to obtain outline permission and later followed up with fully engineered documentation to obtain final permission. The action of submitting requests for preliminary letters of no objection during the FEED stage ensured all relevant authorities were appraised of the project. As the projects received sanction, GASCO advised the key authorities accordingly to facilitate final approvals during the project execution stage. SIMOPS SIMOPS refers to the simultaneous operations of existing facilities during the construction and commissioning of adjacent new facilities. It is a critical element in the overall HSE management for any new facilities project. Interfaces by definition include SIMOPS, and extensive efforts were made to identify the issues and mitigations that would be required to reduce to PTQ Q

5 the realistic minimum any risk to safety and the environment. Obligations for contractors and owner With any project, it is important for the owner, at the outset, to define and sanction the level of risk it is prepared to take, whether this is cost, schedule, HSE or product quality. Once this level of risk is defined, the appropriate allocation of risk between owner and contractor can be communicated, and the contract wording and procedures developed accordingly. Risk means money, and any exceptional risk allocated by owner to contractor will generally manifest itself in a higher contract value. In the case of interfaces, it is doubly important to identify which party is best able to minimise specific components of risk and to control those that will exist. Some owners will provide an extended project team to manage all such interfaces, while others will allocate the full risk to the contractor. In this case, GASCO identified in the invitation to tender as many of the interface issues as could be identified at the tender stage, advised of others as they arose during the tender stage, and required the contractor to provide interface management for all known and inherent interfaces at the time of contract award. The message in the Tender documentation and subsequently incorporated in the EPC Contract was: Owner has identified extensive interfaces that Contractor will be required to manage. Whilst Owner has an Interface Manager in its management team and will monitor Contractor s interface activities and assist by facilitating access to other parties undertaking such interfaces, Contractor s responsibility for coordinating and completing all interfaces is within the contract scope. Tender evaluations The comprehensive evaluation of the lump sum tenders for the projects included an assessment of the contractor s understanding of, and provision for, interface management. This covered the contractor s inclusion of a dedicated interface manager, its knowledge of undertaking EPC contracts in the Emirate of Abu Dhabi, the general process for obtaining permits, interaction at ports of entry, market availability of local materials in the context of other project works in the specific project area, logistics of site access with other contractors on site, and so on. EPC stage management Reinforcing the message The critical role of interface management, and the obligation for the EPC contractor to manage it, was reinforced right from the outset in the project kick-off meetings. Coordination of this message was facilitated by the award of further PMC contracts to Foster Wheeler for the EPC stage of two separate major projects at Habshan and for the 3rd NGL Train project at Ruwais, and in the role of overall interface management between the suite of projects. This provided the continuity of personnel and knowledge of the interface issues. It also ensured the ready interaction between the individual project management teams within the overall interface framework established by the resident GASCO/PMC interface manager. Managing the interfaces Each PMC project team worked closely with GASCO s own project personnel and the operating groups to ensure complete understanding of, and agreement with, all decisions regarding project issues. This was never more critical than with regard to interfaces, of which there were many between GASCO s existing plants and the new projects. In the case of Ruwais, there were many piping tie-ins that required a shipping window in which piping in the storage and jetty areas could be emptied and purged by GASCO s operations team so as to enable the EPC contractor to undertake the necessary tie-in work. Each EPC contractor developed a comprehensive list of interfaces against which it reported progress on a regular basis. It was crucial that each EPC contractor progressed its own activities and highlighted any areas or interfaces that required GASCO s input or support to facilitate responses or actions from third parties. EPC contractors progress with these interfaces was monitored consistently across all the projects by the GASCO/PMC interface manager to ensure focus on the big picture was maintained. Corrective actions were recommended where it was deemed necessary. Some of the most important interfaces related to the alignment of projects where they directly interact; for instance, power supply to OGD-III at Habshan, product flow from OGD-III and AGD-II to Ruwais NGL3, and availability of new wells. These are critical; the outcome of any delay in these interface areas could cascade down through affected projects and determine when additional product is available to market. A problem with even the most obscure interface can, therefore, be multiplied, to have a serious detrimental impact on the whole of the integrated projects in this chain of supply. Certain key value judgments that inevitably have to be taken by owners throughout the life of a project can be seriously flawed without an overview of the full perspective of the interfacing schedules and interdependencies. Managing perceptions The substantial effort expended by GASCO/PMC to ensure all external parties were kept informed of the progress of the projects was one of the key elements of the PMC interface manager s role. Affected parties were advised in advance of the specific issues where they would be requested to assist. Many of these third parties allocated a single point of contact so that GASCO/PMC and the EPC contractor could jointly and individually communicate with them on a consistent basis. Maintaining alignment Regular alignment workshops were held to encourage cross communication between project management teams. Project managers and PMC PTQ Q

6 representatives from the OGD-III/ ADG-II projects presented their project status to the assembled GASCO senior management, corporate division managers and project managers from other, interfacing projects. Lessons learned and project initiatives were shared at this forum that further reinforced GASCO s commitment to interface coordination. Keep alert to new and recurring issues The FEED stage identified approximately 30 projects that would require some degree of interface monitoring. Since then, and in line with Abu Dhabi s drive to increase production in the oil and gas sector, there has been a series of announcements regarding many world-scale projects in the Emirate. As each of these progresses through the early development and FEED stages, the GASCO PMC interface manager has been active in securing contact with, and obtaining information on, the new projects. In particular, during the EPC execution of the Ruwais 3rd NGL Train, design has started on three new projects, which have a direct effect on Train 3 and also interface with each other, not least with regard to land allocation. The extent to which the ongoing project can accept any modifications to pre-empt the needs of the new projects has to be carefully judged with regard to cost, schedule impact and technical suitability. Here, again, it is the GASCO/PMC interface manager who guides these issues through the decision-making stage. Step in to assist The GASCO/PMC interface manager has a broad-ranging remit and obviously cannot handle all of the interface management issues directly. However, GASCO has ensured every one of its projects has a team member to coordinate with and assist the interface manager. The efforts put into the OGD-III/ AGD-II suite of projects has demonstrated that, however well the foreseeable interfaces can be allocated and managed, there will always be new issues that arise, often at short notice. At times like these, all of those involved in the project interfaces to date can be relied upon to step in and assist, and it is to everyone s credit that we did not experience any interface impasses in the ongoing GASCO projects. Lessons learned When developing a project in the oil and gas business in the Emirate of Abu Dhabi, it is crucial to identify and plan for an extensive number of direct and indirect interfaces with other parties. Spread the net as wide as necessary to capture all such projects, whatever their stage of development. Get everything on the radar, even if later, after investigation, it can be discounted: Establish the position of an When developing a project in the oil and gas business in Abu Dhabi, it is crucial to plan for an extensive number of direct and indirect interfaces with other parties interface manager in the owner s team. This person should be a senior member of the team and have a broad base of experience, preferably including project development, process, engineering, commercial and contract wording/interpretation Think through the logical stages of defining, progressing and managing the interfaces, to identify the best options for allocation of responsibility for their management Include as much definition as possible in the enquiry documentation, to minimise the risk to EPC contractors arising from potential interfaces Establish contract obligations for EPC contractors, which are as clear as possible without loading excessive interface risk for unrealistic or undefined requirements Ensure each EPC contractor understands the interface issues and its obligations to manage them Follow this all through to the project execution and do not lose track of the issues Accept that new issues will arise and have the personnel and infrastructure in place to handle them. This article is based on a paper originally presented at the 2008 Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) held in Abu Dhabi, UAE and organised by dmg world media. Richard Collins is a Senior Project Manager with Foster Wheeler, Reading, UK. He was Interface Manager during the front-end engineering design (FEED) stage of the suite of five projects being undertaken by GASCO on behalf of ADNOC in Abu Dhabi. He then became PMC Project Manager for the engineering, procurement and construction (EPC) stage of the Ruwais 3rd NGL train. richard_collins@fwuk.fwc.com Robert Durham is a Principal Project Engineer with Foster Wheeler in the UK. As part of the project management consultancy team, he was Area Project Engineer during the evaluation stage of the projects undertaken by GASCO on behalf of ADNOC in Abu Dhabi. He was then appointed PMC Engineering Manager for the Ruwais 3rd NGL train and has in addition taken the role of interface manager on behalf of GASCO. robert_durham@fwuk.fwc.com Walid Zeid is the Senior Project Manager for Habshan 3 (formerly OGD III) EPC Phase in the Major Projects Group with GASCO. He was formerly Senior Projects Manager in the Projects Execution Division, later joining the FEED stage of the OGD III/ AGD II projects, before managing the bidding phase of AGD II. Raafat Fayek was the Senior Project Manager for GASCO for the Ruwais 3rd NGL train project and is now Senior Project Manager for all major new projects at Ruwais. He was formerly Electrical Section Head at Ruwais, then Project Co-ordinator, before moving to GASCO s major projects division in Abu Dhabi as a Project Manager. 34 PTQ Q