Project Management Case Study 2
- Mega Project: approved budget was about (~) $700 million US (early 1990’s).
- This mega project had two main sub-projects
- One sub-project was modifications to an existing refinery (~$100 million), and
- The second sub-project (~$600 million) was new facilities (grass roots/green field)
- Project was on an Island, in a country where there were limited labor and technicians.
The Project Owner
- The Project Owner was a joint venture consisting of three companies:
- 50% (N. America),
- 40% (N. America),
- 10% (Asia)
- The 10% company was a joint venture between the 40% company and a government of an Asian country.
The Service Providers
- Project Owner awarded a global contractor (main contractor) an Engineering, Procurement, and Construction (EPC) contract
- Contract was reimbursable (cost plus), incentive contract
- Main contractor was ultimately responsible for engineering, procurement, and construction management (UK); construction was to be awarded to a construction general contractor
- Construction general contractor, ended up being a joint venture between three companies (Europeans – mostly Germans)
- Construction labor came from Asian countries, senior construction staff were mostly European and Asian
- Project was on a small island, with an existing refinery, and limited space for the new plant. As a
result, we had to reclaim land from the sea to increase the plot space.
- The government wanted to connect all of these islands (see figure) into one large island; reclamation was ongoing while our project was in progress; which means we had to finish before they close the shipping channel on us.
- Another difficult challenge was the lack of qualified labors in the area, which we would have to bring from other countries and this led to another problem: housing them.
- A typical project of this size would require more than 5000 people on site, which was not possible in our case
- Build the plant’s main process units on barges,
- Float the barges to a partially prepared site,
- Build a dike around them,
- Fill the barges with concrete to settle them on the shallow sea floor
- Fill around them (reclaim from the sea)
- Build the rest of the facilities around them.
- Use modular construction techniques,
- Build the main process units as modules at fabrication yards in the region,
- Ship them to the site on barges,
- Install them one after the other – like Lego,
- This was the selected option,
- Resulted in close to 200 modules, including:
- Process units module (2nd picture below),
- Pipe racks modules (1st picture below),
- Large vessels modules (similar to the 3rd picture) but in our case the vessels came with insulation, paint, pipe, instruments, electrical, etc., already installed.
- Many of the modules were the size of a four-story building, which required heavy lifts
- The above solutions solved the challenges of the island limited space and labors but created numerous other challenges,
- The team felt the other challenges are manageable, and accepted them
- Some of these secondary risks were:
- Shipping risks
- Installation risks; safety, fabrication defects, construction sequencing …
- Splitting the management team; multiple locations
- Availability of crane large enough to lift the modules; had to book in advance
The Project Results
- Despite the challenges, the project was considered successful in term of:
- Success of the product,
- Success of project management, and
- Overall success of the product delivery
- Business success is another subject and outside this case study
- The modular concepts worked well with minimal issues although, not without challenges