Industrial CapEx Projects Front-End Loading (FEL) Methodology & Stage-Gate Process

Project success is a function of the project management teams overall expertise in attaining & maintaining the diverse discipline subject matter expertise, maintaining scope definition, attaining a viable project execution plan, execution considerations, construction strategy, planning & schedule impact, resource utilisation, overcoming difficulties & problem-solving, etcetera. These are just a few key activities that are required before taking into consideration all required discipline technical aspects & deliverables of any industrial projects.

There needs to be the correct level of communication & reporting to key-stakeholders and upper management in place through the full lifecycle of an industrial project, to attain & maintain their support throughout the implementation & delivery of the project.

The technical aspects of all industrial projects must take into consideration all material issues, utility systems, equipment considerations, civil & structural, electrical & control systems, document control, specifications, standards, as well as all local laws & regulations.

There is also a need to utilise proven cost estimating standards, tools, processes & procedures which includes the utilisation of estimate factoring, budget & detailed estimates, historical project costs & current construction rate norms etcetera as the basis of the cost estimate.

TPT Front-End Loading (FEL) Process:

TPT Key-Stakeholder project engineering & management teams implement & deliver CapEx industrial projects utilising the Front-End Loading (FEL) methodology, which improves the overall likelihood in achieving & delivering project success to our clients during the implementation & delivery of Engineering, Procurement & Construction (EPC). However, this is highly dependent upon the overall project Business Statement of Requirements (BSoR) being based on a viable & robust business case.

CapEx Projects typically have several stakeholders throughout their lifecycle which include the business unit, plant operations, & management personnel, & also as applicable, engineering contractor(s), manufacturers & construction contractor(s) personnel. Each of these parties brings valuable but potentially conflicting viewpoints which are necessary to ensure the best possible commercial & technical decisions are made & ultimately, the success or failure of a project.

Initially, industrial CapEx project scope is only defined in adequate detail to correctly identify the major cost components & overall schedule determining factors, and the remaining definition is derived from the application of factoring. The key reason for this is to ensure a firm basis is agreed upon by all stakeholders before committing the technical & commercial resources necessary to commence detail design, procurement, & construction of the commercial asset. Moreover, it is this firm basis coupled with the FEL-3 accuracy & maturity assurance that minimises risks in project cost, schedule duration, & disruptive changes, & leads to overall project success.

The TPT Front-End Loading process methodology breaks the lifecycle of an industrial project down into 6 distinct phased gates with all key findings, recommendations & deliverables being collated within a Decision Support Package (DSP) at the end of each phase. TPT utilise a governance structure that calls upon a key-stakeholder steering committee as a primary gatekeeper(s) to review, evaluate & determine if each Stage Gate DSP is of sufficient quality, accuracy & maturity for them to make a determination on whether the governance criteria to pass through the gate have been met or whether to stop, hold or recycle the project culminating in Key-Stakeholder management sanctioning or discarding the project.

The following highlights the key activities implemented & delivered during each stage through the lifecycle of a project by the TPT key-stakeholder project management teams with Key-stakeholder technical & commercial personnel:

Conceptual Phase Typical Activities (FEL-1 Stage-Gate)

• Assemble initial commercial, technical & management team

• Define the commercial opportunity

• Evaluate all potential concept options & ascertain the best

• Identify potential commercial stakeholders

• Derive a technical & commercial plan for implementing the next phase

• Identify all management & business expectations

• Develop overall business objectives

• Implement management review, challenge, approval, or rejection reviews

• Frame project implementation & delivery scope

• Attain definition of all the project key deliverables

• Assess the current commercial situation

• Generate process description

• Identify potential concept options

• Define process conditions

• Develop initial Process Design Package (PDP) conceptual scope deliverables

• Create preliminary block flow diagrams

• Prepare a conceptual high-level cost estimate

• Define all plant critical & long lead equipment

• Define utility & feed-stock requirements

• Generate project Business Statement of Requirements (BSoR)

• Prepare management review Decision Support Package (DSP) documentation

• Management gate to review & approve, or reject project to move to the next phase

Evaluation Phase Typical Activities (FEL-2 Stage-Gate)

• Supplement the commercial, technical & management team to implement & deliver this phase

• Review conceptual phase package deliverables

• Generate typical deliverables definition

• Establish overall objectives & priorities

• Define process start-up, operating, & shutdown conditions

• Begin generating execution planning deliverables

• Identify & evaluate potential alternates

• Evaluate all potential alternatives

• Select & refine options & alternatives

• Environmental impact studies and initial planning permissions. Right of way or shared access agreements with adjoining ground owners etc.

• Prepare alternate estimates

• Generate Heat & Material Balance (H&MB) if required

• Develop scope definition of each functional element

• Process Flow Diagrams (PFD)

• Utilities Flow Diagrams (UFD)

• Generate equipment list

• Generate major equipment data sheets

• Implement initial hazard review

• Create initial plant/facility 3d layout including equipment, major piping & initial EPC Schedule (~20% level detail)

• Create project charter

• Commence creating the Project Execution Plan (PEP)

• Generate project Statement of Requirements (SoR)

• Define & agree the project implementation commercial terms to be applied

• Implement PQQ & evaluate FEED engineering contractors

• Issue technical & commercial terms Request-For-Proposal (RFP) to selected FEED engineering contractors

• Prepare for undertake steering committee & external peer reviews

• Implement Project Definition Rating Index (PDRI) assessment

• Prepare Management review DSP documentation & undertake a review

Definition Phase Typical Deliverables (FEL-3 Final Investment Decision Stage-Gate)

• Supplement the project commercial, technical & management team to implement & deliver this phase

• Implement technical & commercial clarifications with potential engineering contractors

• Evaluate contractors & implement final commercial clarifications & negotiations, to award contract & Purchase Order (PO)

• Complete the stakeholder relationship & interface management process

• Progress the implementation & execution planning activities

• Implement & complete load studies & value improvement practises

• Generate regulatory register that encompasses all regulatory submittal & approval requirements

• Undertake all required FEED engineering activities to further define project deliverables scope

• Prepare sufficient concept definition and planning to advance the project

• Engineering shall identify any Decommissioning Strategy opportunities into the project-specific PEP

• Generate plant/facility 3d model & Plot-Plan (~60% level detail)

• Define area classifications

• Progress initial Process & Instrument Diagrams (P&IDs)

• Generate electrical one-line diagrams

• Validate & Procure Long-Lead Equipment (if required to maintain schedule)

• Generate preliminary equipment datasheets

• Develop critical Assessments which determines the POQR for engineered equipment and materials developing any new Performance Standards and specify SCE

• Implement initial hazard & HAZOP analysis

• Prepare for undertaking steering committee & external peer reviews

• Define the phased stage-gate milestone dates for the project

• Manage and continually update the risk & opportunities register

• Generate HSSE Management Plan & define mitigation activities for identified HSSE risks

• Update & finalise PEP (will be frozen at FID & subject to Management of Change (MoC) approval to change)

• Prepare project implementation detailed schedule

• Create design deviation register to capture approval of deviations to project specifications

• Update and execute the plan for hazard reviews applicable to the project to conform to the HSSE Management Plan and the Inherently Safer Design (ISD)

• Prepare & management review DSP, slide-pack & undertake approval, or rejection FID review Prepare Detail Estimate

• Develop a commissioning strategy that encompasses system boundaries, identification of unique systems that require start-up Authorisation, the intended system hand-over packages and other Region factors

• Operations input on operability review, sparing philosophy & O&M strategy

• Generate execute stage project Contracting Strategy & identify any project specifics that deviate from the PEP

• Engage with the board and business support team to identify and refine impacts on the business plan(s).

• Define planning and performance Management policies against Business Plan Elements impacted by the project

• Identify production Impacts for the planned execution and include those impacts in the appropriate business plans

• Implement

• Next phase EPC commercial terms negotiations that encompass correct risk allocation

• Implement PDRI & Maturity and Accuracy Total Rating System (MATRS) assessments

• implement a probabilistic cost and schedule risk analysis as part of the FEED deliverables for FID to derive the Monte Carlo P10, P50 and P90 values for cost and schedule

• Prepare Management review DSP documentation & undertake review

Execution Phase Typical Deliverables (Stage Gate 4)

• Assemble project & implementation team, contractors as required

• Implement & complete operations planning

• Create material requisitions, including detailed material requirements, technical requirements, ITP requirements, and document submittal requirements, for engineered equipment and materials being procured

• Procure equipment - start vendor information clock

• Implement procurement of materials & consumables, manage & take delivery

• Perform & complete all detail design engineering

• Implement & deliver the Project Execution Plan (PEP)

• Implement & deliver IR strategy

• Generate & complete pre-commissioning, commissioning, start-up & performance test procedure

• Undertake & deliver EPC in accordance with WBS schedule

• Manage deviations, MoCs & approval of variation orders etc.

• Perform operator & maintenance teams training

• Implement and deliver pre-commissioning & commissioning plan

Operation Phase Typical Deliverables (Stage Gate 5)

• Start-up & performance plan & procedure is generated and approved

• Completion management & acceptance review

• Defined plant operating conditions, including temporary arrangement

• Complete system hand-over mod Hand-over Certificate

• Project Health, Safety & Security Review (PHSSER) has been implemented

• Check comm, start-up and ops procedures

• Full operation & performance

• All training, site operating procedures & maintenance manuals are in place and personnel have completed all training

• Marking up of critical documents and available to ops

• Close-out of Signed off engineering queries, technical queries, designs changes and completion of all outstanding works

• All MSDS and COSHH datasheets are onsite & registered etcetera accordingly

• Complete all punch listing and close-out of Cat#A punch-list actions

Completions Closeout Typical Deliverables (Stage Gate 6)

• Post-implementation check sheets “prior to close-out” are reviewed and accepted

• Weight control update

• Verification that system hand-over has been complete correctly & fully

• Implement Operations and Maintenance Documentation updates

• Compile all engineering and technical queries

• Verify MoC association & close-out

• Close-out all category B punch-list

• Implement lessons capture & review process

• Implement a cost review & capture

• Implement post-project assessment (learned lessons)

• Implement a detailed close-out review

• Update continuous improvement learning register

• Update COMAH/Safety Case (or geographical regions equivalent)

• As-built master Drawings & doc’s

• Review engineering and technical queries

• Close-out record incl. commercial