onshore modules construction – a fabricator’s view
DESCRIPTION
Understand the important lessons learned and common pitfalls to avoid in contract formation and contract execution through this presentation told from a fabricator’s point of view. This presentation covers a discussion on contracting model, contracting strategy and project organization setup.TRANSCRIPT
Lessons Learnt and Pitfalls to Avoid in:
Contract Formation Contract Execution
© 2012 McDermott. All Rights Reserved.
Onshore Modules Construction – A Fabricator’s View
Early involvement of fabricators/contractors is key to the process
Greatest positive impact comes from early definition on engineering,material selection, constructability, completions, optimizedcommissioning, load-out philosophies and sea-fastening
This is probably the single biggest lesson learnt
Summary Findings
Lessons Learnt- Contract Formation
Contracting Model - Owner, EPCM Contractor and Fabricator(s) Definition of roles and responsibilities – Clarity in documents and processes
Fabricator’s relationship with EPCM Contractor and Owner – Single pointresponsibility is key
Warranty obligations and remedial work executed off SE Asia – Need forrationalization
Governing Law, Dispute resolution provisions etc – Adapt to SE Asia
Is this the only sustainable contracting model? (EPC, EPCM and Supplier)
Lessons Learnt- Contract Formation
Contracting Strategy Fabrication on unit rates based on
approximate quantities (BOAQ)- Gooddefinition is key
Long bidding cycle due to continuouschanges in design – Awareness of resourcesand commitment
BOAQ and models not mature enough forbidding – Risk sharing and qualifications
Materials – Fabricator’s supply usuallyrestricted to bulks – Extent of definition andscope split
Commissioning requirements, Load-outrequirements etc – Early definition andplanning
Australian Requirements AQIS or higher – Definition, acceptance criteria and
specifications usually evolving throughout theproject.
Electrical equipment and installation competency –Australian certification requirements and workerslicenses for work executed in SE Asia.
Australian Industry Participation (AIP) requirements– levels of participation, early identification ofpotential and allowance in overall schedule.
Materials Specifications Top-up not readily available in SE Asia, especially
exotics and other issues such as weld procedures qualified previously or on contract material.
Lessons Learnt- Contract Formation
Awareness of Fabricator’s Risks – Different from Owner or EPCM Risks Mix of work type – Balanced to reflect the work content
Materials selection and specifications
Quantity variations
Module layouts, foot-print, equipment location
Construction sequence
ROS dates for Long Lead equipment
Connection details – stiffeners, joint connections, weld details
Space requirements
Testing regimes
Acceptance criteria
Lessons Learnt- Contract Formation
Early involvement ensures better definition of scope split, and mitigation of the risks.Results in a better contracting arrangement, improved schedule certainty and possibly lower costs, to all parties.
Constructability Studies Early – Impact onproductivity, cost, quarantine andschedule. Structural design to cater to fabricator’s build
sequence E.g. Pancakes Vs Roll-up
Section sizes and grades to suit existing weldprocedures, joint configurations and competencies
Standardization of components such as stiffeners,supports etc or proprietary supporting systems.
Standardization of sections and grades to allow bulkbuying and interchangeability
Design for construction - access requirements, watertraps etc.
Load-out philosophy and sea-fastening to reducevessel standby time
Lessons Learnt- Contract Execution
Project Organization Set-up Adequate level of resourcing specific to each Contract – One size does not fit all
Clearly defined communication lines and roles – internally and between parties
Open and healthy relationship between parties – awareness of each other’s drivers
Engineering and Procurement Interfaces Dovetail engineering deliverables to suit fabrication requirements rather than
progress
Material deliveries to suit fabricator’s build sequence.
Allow sufficient time for checking inconsistencies in design etc.
Use of tools like PDMS to reduce fabricator’s engineering interfaces
Integrated change management process to mitigate impact of design changes on fabrication
Lessons Learnt- Contract Execution
Lessons Learnt in Execution
Yard Layout and selection process Space constraints and workshop capacity – Volume driven pre-fabrication work
with large requirement for space for assembly.
Load- out philosophy to be firmed up early – by Trailers, by lifting etc and whether side load-out or front load-out.
As shipping is largely driven by requirement and sequencing in the final location (LNG plant), module layouts should allow for change in priorities and shipping sequences.
Lessons Learnt in Execution
Quarantine & Build Clean Philosophy Quarantine requirements such as proximity to vegetation, seasonal impacts from
local flora and fauna, rainwater stagnation etc to be considered early.
Can be difficult to meet requirements in the tropics without being carefullymanaged.
Can be a larger issue than the fabrication itself – early planning and dove-tailinginto execution plan a must.
Designs and supplied equipment are not always quarantine sufficient/compliant.
Philosophy of build clean starts at design and procurement and not in thefabrication yard.
Insulation Philosophy Material & process selection for insulation including cryogenic insulation to
minimize damage.
Avoid congestion on assembled modules by insulating more on ground.
Increase pre-fabrication to remove insulation from critical path and reduce costs.
Minimize interfaces between proprietary supports and insulation.
Lessons Learnt in Execution
Construction Completion & Testing Tolerance levels up to 1mm – onerous and far more stringent than normal offshore
modules specifications
SWHU (Single Weld Hook Up) - Preparation for a global regime??
Advantages and disadvantages of testing as a train versus testing individual modules to be concluded early.
Testing - stored energy versus absolute pressure rating as a basis for exclusion zones.
Load-out & sea fastening plan to be developed early and standardized.
Internal sea-fastening is often delayed until the MWS has inspected the modules just prior to sail-away.
Lessons Learnt in Execution
Summary
Clear contracting model.
Early definition of detailed requirements and specifications.
Clarity of commercial arrangements and pricing philosophy.
Early engagement with contractors to incorporate LessonsLearned into Design phase.
Design for construction and completion.
Plan Early and Engage Early to Reap benefits
Our Delivery Locations in SE Asia
Batam60,000MT per annum110 hectares
Qingdao McDermott Wuchuan30,000MT per annum43 hectares