Industrial CapEx Projects Front-End Loading (FEL) Methodology & Stage-Gate Process
Updated: Apr 4
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