A Template for EPC Project Management and Execution

1 A Template for EPC ProjectManagement and ExecutionRichard P Helper, PSPW illiam MihelichPLEASE USE MICROPHONE FOR ALLQUESTIONS AND COMMENTS!2 BIO of Richard Helper President, RPH Consulting, Ltd., Ann Arbor, Michigan 35 years EPC Project Management and Operationsexperience. 10 Years Consulting Owner s construction manager for $ Billion capitalprogram Worked with two major GCs on developing EPC templates. 17 Years with Aker Kvaerner Mining and Metals, Power, Oil & Gas Proposals, Project Management , Operations Management Claims and Resolutions Began working on EPC templating in 20033 BIO of Richard Helper Something You Don t Know About Me Private pilot, Instrument of William Mihelich General Manager Project Services, Matrix Service Inc. 26 years Project Management experience. Operations and Project Management for Constructor onPlan Spec and EPC projects mostly in Oil and Gas Project Controls Specialist for an Engineering Company Owner s Capital Program Manager Began working on EPC templating in 20145 BIO of William Mihelich Something You Don t Know About Me I m an avid sailor and hope to someday cross the Pacific Oceanaboard a sailboat6 Presentation Outline Review of information and sources available to the EPCindustry How our case study company organized their current way ofdoing projects How our case study company aligned and integrated AACEIand CII knowledge and publications to their processes.

2 How our case study company assigns performanceresponsibilities to roles. How our case study company ensures processes are beingfollowed by Project teams How our case study deploys the knowledge base. Questions7 INFORMATION SOURCES AVAILABLE TOTHE EPC INDUSTRY8 Information Sources9 Information Sources AACE Approximately 75 Recommended Practices 23 Professional Practice Guides Monthly / Bi monthly publications for several decades CII Approximately 700 publications, tools and trainingcourses 23 Professional Practice Guides PMI PMBOK10 Case Study Company Our Case Study company: Incorporated in 1984 Initially provided engineering, maintenance and repairsto oil tanks Expanded services to constructing new tanks Acquired an engineering company to add Cryogeniccapability as well as complete terminal engineering Acquired companies that perform maintenance inrefineries Acquired companies that perform maintenance andcapital projects in other industries11 Case Study Company New CEO in 2011 World class HSE culture Develop EPC capabilities to support large cap projectswithin current areas of expertise.

3 Become the preferred, added value partner to clients. Improved Project resultsThe Problem The charter: Standardize Project Management practices across allcompanies Provide integrated Project Execution processes fromEngineering through Commissioning Incorporate best industry practices13 DEFINING WHAT YOU DO 14 Defining What you do Underlying principles. Top down structure Relies on expertise from learned experience Communicates expectations by knowing the end at thebeginningDefining What you do First: develop a structure to organize processes bysubject matter. Started with CII Knowledge Areas Separated Project Management from Project Execution Finalized on set of Key Activities Defining What you do 17 Project Management KEY ACTIVITIESPROJECT Execution KEY ACTIVITIESPM01 FRONT END PLANNING MANAGEMENTPE01 FRONT END PLANNING EXECUTIONPM02 Project Execution MANAGEMENTPE02 HSE IN DESIGNPM03 CONTRACT MANAGEMENTPE03 SYSTEM ENGINEERINGPM04 RISK MANAGEMENTPE04 LAYOUT, 3D MODELING AND DISCIPLINE DESIGNPM05 QUANTITY MANAGEMENTPE05 PROCUREMENTPM06 ESTIMATING AND COST CONTROLPE06 SUBCONTRACTINGPM07 PLANNING AND SCHEDULINGPE07 FABRICATION AND CONSTRUCTIONPM08 CHANGE MANAGEMENTPE08 COMMISSIONINGPM09 HSE MANAGEMENTPM10 QUALITY MANAGEMENTPM11 INFORMATION Management Company specific list of Key ActivitiesDefining What you do 18 Project Management is aligned to supportProject ExecutionDefining What you do First.

4 Develop a structure to organize the processes. Started with CII Knowledge Areas Separated Project Management from Project Execution Second: utilize the Project life cycle to time phase theprocesses. Utilized traditional EPC phases for projects Added a Front End Planning (FEP) phase for thedevelopment of owner CAPEX process. Added a Proposal phase for the development What you do Front End Planning Aligned FEP phase to CII Front End Planning (CII 213-1)for furthering industry standardsFRONT END PLANNINGFEP1 FEP3 FEP2 Defining What you do 21 ENGINEERINGPROCUREMENTFABRICATION AND CONSTRUCTIONCOMMISSIONINGMEPC1 MEPC2 MEPC3 MEPC4 MEPC5 MEPC6 MEPC8 MEPC7 MEPC9 MSC1 MSC2 MSC3 Project Execution Used well known industry nomenclatureDefining What you do 22 Proposals Needed a mechanism to separate proposals slides to reflect the different types of proposals: EPC Engineering services Construction only projects bid from owner plans andspecificationsDefining What you do 23 PROCUREMENTC ritical PO's Awarded;Basic EngineeringCompletedLayout & Main StructureFrozenGlobal Design CompleteDetailed EngineeringComplete.

5 MajorSubcontracts AwardedEPC1 EPC2 EPC3 EPC4 ENGINEERING Subphases (aka Stages) Provides a unique interlocking relationship among theproject What you do 24 Critical PO's Awarded;Basic EngineeringCompletedLayout & Main StructureFrozenGlobal Design CompleteDetailed EngineeringComplete; MajorSubcontracts AwardedEPC1 EPC2 EPC3 EPC4 Piping & Instrument Diagram-Material Selection reflected- Pipe spec & spec breaks-Valves shown-Lines shown with estimatedsizes-Design Basis issued-'First Supplier Information'included for 1st PriorityequipmentMaster Equipment List- Draft equipment listcompleted (Initial Info)- 'First Supplier Information'included for 1st PriorityEquipmentPiping & Instrument Diagram-Critical lines sized- HAZOP performed-PCV/PSV and inlineinstruments sized-'First Supplier Information'included for 1st PriorityequipmentMaster Equipment List-All Tagged items listed-'First Supplier Information'included for 2nd PriorityEquipmentPiping & Instrument Diagram-All lines sized-HAZOP commentsincorporated-Vents & drains identified-P&ID/3-D model comparisondone-'Frozen Supplier InterfaceInformation' included for 1st,2nd & 3rd Priority equipmentMaster Equipment List-Equipment list ready to beused as basis of design-All tagged items containprocess data, load data-'Frozen Supplier InterfaceInformation' included for 1st.

6 2nd & 3rd Priority EquipmentPiping & Instrument Diagram-All instrument logic reflected- Control and alarm settingsincluded-Certified/final approvedvendor info implementedMaster Equipment List-Equipment list ready to beissued as a construction/fieldsupport document-Information updated based on'Final Approved SupplierInformation' for all Equipment Milestone Objectives List of significant interrelated progress requirementsfrom successful projects. Processes support milestone/stage gate objectivesDefining What you do Key Activity:PM01 Front End Planning Management :MFEP3 Detailed ScopeConceptFeasibilityMFEP2 MFEP1 MFEP0 FRONT END Process Maps Roadmap of What you do 26 Process Flow Diagram Exploded view of AND INTEGRATE INDUSTRYPRACTICES27 Align and Integrate Industry Practices28 Using the Key Activities and Life Cycle structure;build cross reference registersApplicable PhasesPFEPEPCS10S-90 Cost Engineering Terminology9/22/2015 All11R-88 Required Skills and Knowledge of Cost Engineering6/18/2013 AllHR12R-8913S-90 Recommended Method for Determining Building Area11/1 and Required Skills for a Planning and Scheduling Professional9/19 Methods7/16 , Technical and Economic Evaluations - As Applied to the Process andUtilitity Industries4/1 , Estimate Classification System11/29 PM06XX18R-97 Cost Estimate Classification System - As Applied in EPC for the Process Industries3/1 PM06XX19R-97 Estimate Preparation Costs - As Applied for the Process Industries6/19 Code of Accounts1/27/2003 , , PM06 PM05 PM0721R-98 Project Code of Accounts - As Applied in EPC for the Process Industries1/27/2003.

7 PM06 PM05 PM0722R-01 Direct labor Productivity Measurement - As Applied in Construction and Major Maintenance Projects4/26 of Activities5/3 PM05 PM06 XXXX24R-03 Developing Activity Logic3/26 Lost Labor Productivity in Construction Claims4/13 PM06 PM07 PM08X27R-03 Schedule Classification System11/12 PM07XX28R-03 Developing Location Factors by Factoring - As Applied in AEC and EPC10/19 , Schedule Analysis4/25 Project Constructability5/20 , Validating and Documenting the Estimate5/12 Activity Durations1/14 PM05 XXXX34R-05 Basis of Estimate5/2 PM06XX35R-09 Development of Cost Estimate Plans - As Applied for the Building and Gen ConstIndustries2/14 International Recommended PracticesTCM RefProject TemplateRP TitlePublishedAlign and Integrate Industry Practices29 Using the Key Activities and Life Cycle structure;build cross reference registersApplicable PhasesPFEPEPCS10S-90 Cost Engineering Terminology9/22/2015 All11R-88 Required Skills and Knowledge of Cost Engineering6/18/2013 AllHR12R-8913S-90 Recommended Method for Determining Building Area11/1 and Required Skills for a Planning and Scheduling Professional9/19 Methods7/16 , Technical and Economic Evaluations - As Applied to the Process andUtilitity Industries4/1 , Estimate Classification System11/29 PM06XX18R-97 Cost Estimate Classification System - As Applied in EPC for the Process Industries3/1 PM06XX19R-97 Estimate Preparation Costs - As Applied for the Process Industries6/19 Code of Accounts1/27/2003 , , PM06 PM05 PM0721R-98 Project Code of Accounts - As Applied in EPC for the Process Industries1/27/2003.

8 PM06 PM05 PM0722R-01 Direct labor Productivity Measurement - As Applied in Construction and Major Maintenance Projects4/26 of Activities5/3 PM05 PM06 XXXX24R-03 Developing Activity Logic3/26 Lost Labor Productivity in Construction Claims4/13 PM06 PM07 PM08X27R-03 Schedule Classification System11/12 PM07XX28R-03 Developing Location Factors by Factoring - As Applied in AEC and EPC10/19 , Schedule Analysis4/25 Project Constructability5/20 , Validating and Documenting the Estimate5/12 Activity Durations1/14 PM05 XXXX34R-05 Basis of Estimate5/2 PM06XX35R-09 Development of Cost Estimate Plans - As Applied for the Building and Gen ConstIndustries2/14 International Recommended PracticesTCM RefProject TemplateRP TitlePublished17R-97 Cost Estimate Classification SystemPM01 PM0627R-03 Schedule Classification SystemPM01 PM07 Align and Integrate Industry Practices30 LastUpdated:9/25/2015 PFEPEPCS0001 Pipe Supports Details/Piping line Class Designator System/Piping ServiceIndex/ASME Metallic Piping Fabrication and Examination SpecificationPE041SD-1 Attributes of Materials Management Systems4/1/1985 Not PDRI Facilitation.

9 Better Results through Better DeliverActiveBest Impact on the Construction Industry12/1/1986 Not Guidelines/Data Sheets/Details, BMM-2 Benchmarking & Metrics Implementation Toolkit Pocket Guide5/1/2004 Best Exposure to the Business Roundtable's CICE Project12/1/1984 Not Industry Institute Model Plant10/1/1986 ActiveOther Industry Institute Model Plant Update11/1/1988 ActiveOther Measurement: An Introduction10/1/1990 ActiveOther PM05 XXX3IR BMM-3 Implementing Project Security Practices7/1/2005 Other Awareness of the Business Roundtable's CICE Project7/1/1985 Not : A Primer7/1/1986 ActiveBest for Implementing a Constructability Program7/1/1987 Not Concepts File8/1/1987 Not Materials Management Handbook9/1/1987 Not Improvement During Conceptual Planning3/1/1986 ActiveBest PM01X5SD-5 Constructability Improvement During Engineering and Procurement5/1/1986 Not of Various Construction Contract Types and Clauses on Project Performance7/1/1986 ActiveOther PM04X5-2RS5-2 Incentive Plans: Design & Application Considerations11/1/1988 Not Risk Allocation and Cost Effectiveness11/2/1988 Not Safety: Zero Accident Techniques11/1/2004 ActiveBest PM02 PM09XX6SD-6 Control of Construction Project Scope3/1/1986 Not PM06 PM07 PM08XX6SP6 Partnering.

10 Meeting the Challenges of the Future8/1/1989 Not PM03X6-1RS6-1 Project Control for Engineering7/1/1986 Not ActiveOther PM06 PM07 PM08X6-2RS6-2 Scope Definition and Control7/1/1986 Not PM05 PM08 XXXX6-3RS6-3 Model Planning and Controlling System for EPC of Industrial Projects4/1/1987 Not ActiveOther PM06 PM07 PM08 XXX6-4RS6-4 Contractor Planning for Fixed-Price Construction5/1/1987 ActiveOther Control for Construction9/1/1987 ActiveOther PM06 PM07X6-6RS6-6 Work Packaging for Project Control11/1/1988 ActiveOther PM03 PM05 XXX6-7RS6-7 Concepts and Methods of Schedule Compression11/1/1988 ActiveOther of Project Risks and Uncertainties, Version Construction Activity to Support the Startup Process2/1/1990 Not PE07PE08 XCII Publications RegisterApplicable PhasesCategoryKnowledgeAreaProject TemplatePub TitlePublishedStatus Using the Key Activities and Life Cycle structure;build cross reference registersAlign and Integrate Industry Practices31 LastUpdated:9/25/2015 PFEPEPCS0001 Pipe Supports Details/Piping line Class Designator System/Piping ServiceIndex/ASME Metallic Piping Fabrication and Examination SpecificationPE041SD-1 Attributes of Materials Management Systems4/1/1985 Not PDRI Facilitation: Bett