Paul G Williams19 June 2013Houston, TX

THE IMPACT MEGA PROJECTS HAVE ON IN-

PLANT PROJECT EXECUTION

Owners in today’s chemical and hydrocarbon process industries have aggressive expansion plans Incorporates additional yearly capital spending

and several mega-scale expansions  Resurgence driven by low energy costs –

contributes to over 50% of production cost for most facilities

INDUSTRY PERSPECTIVE

Major expansions, new facilities and increased maintenance are draining available engineering, construction and fabrication resources Mega projects draw resources from small in-plant

projects and plant based technical/operational organizations

Large projects also suffer from lack of skilled resources from project management level to craft worker

BACKGROUND

Problem deepens when project drivers are defined by business goals to achieve completion date during high price cycles Forces organizations to implement

execution strategies without understanding complications that would occur (compared to conventional execution)

Example: the fast track execution Requires level of organizational maturity and rigid

and detailed planning from early project phase to completion

BACKGROUND

Plant based project resources must plan and manage projects out of range of their experience level Concepts are similar Volume of data & complex interfaces is

overwhelming Traditional decision-making processes

/communication lines not structured to address management’s need for decision-making details required on mega projects

PROJECT IMPACT

Plant based practice of going to local alliance contractors does not always work Typically focus on small, in-plant, project

workload and do an excellent job When overstretched, they struggle to execute

quality deliverables in a timely manner Pricing is also an issue

PROJECT IMPACT

Resources experienced in planning /executing complex projects tend to cost 12% to 17% more per man hour than plant-based counterparts

Large-sized projects warrant experienced team members Typically comes with high price Needs to be planned for accordingly

REALITY

Good time to become a Project Manager (PM) from a demand standpoint

OPPORTUNITY

Unfavorable time to become a PM from a guidance standpoint Minimal mentorship Thrown into a plant-based PM role soon after being

hired  No time for honing skills through execution of

various day-to-day roles /responsibilities

Expected to manage with 1 - 3 years experience rather than 10–15 year maturation process that once existed

Can be excellent plant-based project PMs, but with limited “battle wounds” and lessons learned, may have difficulty being successful on major projects

PITFALLS

Owners sometimes hire Project Management Contractors (PMC) as Owner representatives Not always a successful tactic

They believe this addresses lack of owner personnel in key project positions

PMCs are usually EPC contractors who are unfamiliar with Owner role

TRENDS

Effectively executing mega-scale project in a plant-based environment can be achieved

As in any project, planning is key Knowing what skills are available Identifying gaps that exist Understanding what drives our projects Identifying how success is measured   

These plans will NOT look similar to those of 10 years ago!

ADDRESSING THE ISSUE

Innovative methodologies need to be developed to allow execution of projects in resource-constrained environments Innovative contract strategies are required to

capture best available resources Pricing realities need to be built into baselines Realistic schedules are necessary to communicate

achievable results Validated cost estimates are required to assure

cost expectations are able to be met Resource plans need to be better defined (but

may not match traditional organization charts)

ADDRESSING THE ISSUE

CONTACT INFORMATION

Stephen L. CabanoPathfinder, LLC

slcabano@pathfinderinc.comwww.pathfinderinc.com

Corporate Office11 Allison DriveCherry Hill, NJ 08003P: (856) 424 – 7100F: (856) 424 – 6414

Gulf-Coast Office16225 Park Ten PlaceSuite 500Houston, TX 77084P: (281) 292 – 5655F: (281) 419 – 9977

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