Cardiff School of Management

MSc Project Management

Management of Mega and Complex Projects

MPM7007

Exemplar Report ONLY

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Introduction

With the African continent withholding global natural gas reserves of 7% (Akpata, White and

Bredenhann, 2013 PWC), and the country experiencing economic weaknesses combined with a

virtually complete absence of natural gas networks along with an internally limited gas

consumption, it highlights the substantial exporting capabilities of the continent (Augé, 2010).

The Trans-Saharan Gas Pipeline project (TSGP) has been amongst discussion for a number of

years, with Augé suggesting the project has been discussed since early 2000. The mega-project

is to be the construction of a natural gas pipeline that will connect Africa to Europe through a

pipeline estimated at 4,400 km in length, which will run through Nigeria, Niger and Algeria

connecting to Spain, for European distribution and trade. The project appears to be cost

competitive, as alternative gas transportation methods have been considered, for instance the

comparison of transportation through Liquefied Natural Gas (LNG) which gas wastage through

this method is estimated between 15%-18% amid the process of liquefaction (Mayaki, 2015).

The cost of the overall mega-project is estimated between $10billion and $13.7billion, with

remaining uncertainties regarding the size of the pipeline yet to be finalized. The TSGP project’s

objectives can be seen in greater detail within appendix 1.0, however it is clear to see that the

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project objectives are closely aligned with African development agencies such as NEPAD and

Africa Power Vision. It can be stated without question that the TSGP mega project will

compromise of a vast and complex business environment interlinked with a variety of powerful

and influential individuals, associations and congress’s. The extensive depth to this mega-

projects macro, meso and micro environment are to prove to be largely complex to manage

effectively, therefore this mega-project will require close micro monitoring within all

departments and throughout each stage of the project.

Figure 1.0 – Trans Saharan Gas Pipeline Overview Source – Sweet Crude Reports, 2014

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With a number of mega projects being too complex and over ambitious, combined with

long-term execution these projects may be opposed by new technology, public policy and new

legislation (Flyvbjerg and Budzier, 2011). Given the extent of this mega project, traditional

project management practices will not suffice towards the successful completion of this mega-

project, however effective programme management can support in the attempt of a lucrative

outcome. By entering programme management into this mega-project, the organization can

have tighter controls on micro managing individual, smaller projects within the mega-project.

Along with the support of programme managers and leading project manager, the collective

team effort can aid in the prospect of a satisfying delivery.

Complexities surrounding this Mega-project

The complexities surrounding this mega-project are magnified through the collaboration of a

number of key stakeholder organizations primarily the countries involved. Aspects within this

mega-project become largely complex considering the size, time-frame and logistics. The

uncertainties surrounding this mega-project are widely derived from the associated

complexities as the complex nature intensifies the uncertainties within this mega-project. The

high level of complexities and uncertainties within this mega-project could be the reasoning

behind the delayed execution and ultimately make this mega-project extremely difficult to

manage and execute successfully. It is likely that the mega-project will encounter a range of

known and unknown complexities along the way given the extended time scale, these may

come in the form of political and financial complexities as well as complex stakeholder groups.

Key Challenges of the TSGP project

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Amidst the lengthy time scale and size associated with mega-projects such as the TSGP project,

the mega-project is likely to be confronted by a number of challenges throughout its life span. A

certain challenge faced by the project would be the financing issue, as such a large endeavour

requires a vast amount of funding for it’s successful completion, the TSGP project is estimated

to cost between $10 and $13.7billion, with implementing authorities such as Nigerian National

Petroleum Corporation (NNPC), Sonatrach, Nigeria’s International Committee of Red Cross

(ICRC) and the Economic Community of West African States (ECOWAS) playing a pivotal role.

Within The Energy Information Administration’s (EIA) 2016 report on the analysis of Nigeria’s oil

and gas sector, it states the attributing factors towards the delay of the TSGP project

commencement, affirming that increasing costs, security pipeline concerns, and continuing

political and regulatory uncertainties within Nigeria are collaborating components to the

postponement of this mega-project (Energy Mix Report, 2016). Similarly the Keystone XL

pipeline project, a crude oil gas pipeline which is estimated to transport 83,000 barrels of oil per

day from Canada to American refineries (Artba.org, 2017), has been largely delayed for a

number of years after several permit application refusals by the Presidential Permit and The

State Department whom hold jurisdiction of the approval of this project as it will cross the

United States border (Parfomak et al, 2013).

Complex Business, Organizational and Commercial Environment

The Trans-Saharan Gas Pipeline project will inevitably be either directly or indirectly affected by

the complex environments, in which the project will operate within. The sheer mass of the

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project and the diversity of the macro, meso and micro environments, surrounding this mega-

project are to prove to be extremely complex given the enormity and depth of all aspects

involved. The successful management of such mega-project will require a highly scrutinized

approach and structured micro monitoring throughout. With complexity being “an inherent and

indispensable part of mega projects” (Kardes et al, 2013), it highlights the multiplicity of a vast

number of contributing factors towards the complex management of mega-projects (Hutter,

2009). With Zidane, johansen and Ekambaram (2012), suggesting that the complexities and

uncertainties are amplified within mega-projects due to their vast size and extended duration.

To begin to understand such a heavily complex and interdisciplinary mega-project, it would

require an in-depth environment assessment. There are a number of approaches to tackle this

tedious task, with Kardes et al (2013) suggesting a categorization of social and technical

complexity to enhance the understanding and improve the management of these complexities.

However, given the enormity of the TSGP project, this approach may appear basic for mega-

projects and could prove to fail in the identification and understanding of the minutiae aspects

involved. Which leads to the suggestions of further segregation and a highly scrutinized

assessment. The TSGP environments can be better managed and understood by assessing the

macro, meso and micro environments, as can be seen from figure 1.1.

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With this in mind, the figure 1.1 model was used in correspondence with a SWOT and PEST

analysis as can be seen within appendix 1.1 and 1.2. The discovery of the aspects from the

SWOT and PEST analysis can be further segregated into categories within each macro, meso

and micro environment. This will assist in the improvements of a structured approach to

managing these aspects. The TSGP project will inherently experience organizational

complexities, given the vast stakeholders involved, “the intricate interrelationships of elements

within a complex system” (Kauffman et al, 2003), such as the TSGP project which, will

incorporate multiple layers of dependencies. The organizational complexities involved will

affect and influence the approaches taken in the successful management of the mega-project.

It must be considered, whether the parties involved have the capabilities to coordinate and

work collaboratively towards a lucrative outcome. The organizational complexities with the

parties involved may prove to be difficult, as the key stakeholders are from differing countries

and cultures, and each will possess their personal objectives and motives for the mega-project.

The organizational complexities correspond with the structural complexities of the mega-

project, with the structural complexities considering the actual work of the entire project, and

for this mega-project the structural complexities are to be vast given the number of elements

involved. The TSGP project will indefinitely experience a vast number of emergent complexities,

for examples the uncertainties regarding the size of the pipeline, if the decision was made to

construct a wider diameter pipeline, it would conclusively result in higher construction and

Figure 1.1 – Macro, Meso and Micro environment consideration aspects Source – Adapted from Foresight Cards, n.d

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resource costs for the mega-project. Further more, the late identification of stakeholders,

which may have been missed during the concept phase of the mega-project, would also be

considered as an emergent complexity. These emergent complexities can be overcome through

the detailed and scrutinized upfront planning of the TSGP mega project, during the concept

phase. However, these complexities are given the term emergent, as they are possible to

emerge throughout the extended time frame of a mega-project, and these complexities would

then need to be managed successfully and sent through a strong and structured governance

process, to ensure maximum successful management.

The TSGP project will undoubtedly experience socio-political complexities throughout its

duration, as governing bodies are behind the project it is likely to encounter a range of political

disturbances as well as lacking in transparency, the occurrence of hidden agendas, and as

previously mentioned the differing and conflicting priorities of the parties involved, which may

also incorporate resistance (Harrin, 2014). The commercial complexities of the TSGP project,

are evident with an extensive budget set for the mega-project, contributing to the commercial

complexities of this mega project is the uncertainties regarding the pipeline diameter, as this is

likely to increase costs from $10billion to $13.7billion. However, the budget is appointed on the

basis and the calculations of the project manager within the concept and planning phase of the

TSGP project, with this in mind, if the project/program manager is unsuccessful in the accurate

cost, resource and planning of the overall mega-project, then this will undeniably increase the

commercial complexities.

The legalities complexities of the TSGP project are to be extremely difficult, given the variety of

the collaborative countries, organizations, cultures and individuals involved. The conflicting

priorities again will cause difficulties in ensuring appropriate contractual agreements are put in

place to accommodate to the differing priorities of the parties involved.

The effective execution of the TSGP project will most definitely encounter a range of

complexities within different areas, the implementation of an effective program management

approach will be required for the successful execution of this mega-project. Although, this is

merely not deficient to ensure the successful execution and delivery, the TSGP project will

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require an extensive level of maturity to champion this endeavor. The Project Management

Maturity Model (PMMM) within figure 1.2, illustrates the maturity process of projects, claiming

in order for a project to reach maximum maturity it must reach level five of continuous

improvement. The TSGP project can be argued to be lacking in maturity, as the inexperience of

performing the mammoth task can halt and create difficulties throughout the project. Although,

it is expected that the collaborative expertise of the TSGP project team will be experienced

within this industry and the project can be benchmarked against similar oil and gas pipeline

projects such as the Ruby pipeline, the Trans-Mediterranean pipeline and the Keystone XL

pipeline. However, going beyond maturity to reach excellence, cannot be achieved without

reaching maximum maturity to achieve excellence Kerzner (2013) argues.

Figure 1.2 – Project Management Maturity Model (PMMM) Source – Project Management, Harold Kerzner, 2013

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Stakeholders Complexities

The TSGP project will inevitably experience stakeholder complexities, due to the enormity of

the mega-project and the vastly geographically dispersed stakeholders involved. The figure 1.3

below, illustrates merely a few key stakeholders for the TSGP project, with the mega-project

being so large in scale and having the influence to impact upon diverse stakeholder groups, the

identification of such stakeholders is a difficult task within itself. The core stakeholders involved

are primarily the acting bodies working collaboratively to achieve the common goal of the

entire mega-project. With the direct stakeholders working directly with the core stakeholders

to achieve the end goal, but perhaps with differing priorities and objectives of the mega-

project. The indirect stakeholders will be affected by the mega-project, its activities and the

deliverables of the mega-project.

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The vast degree of stakeholders and their influence on the mega-project will be very complex to

manage, and assessing these complex priorities of stakeholders, must be better understood and

managed through a priorities assessment. This will assist in identifying the differing levels of

complexities associated per stakeholder organization or individual, by understanding the exact

priorities to ensure these priorities are met and managed accordingly. This will also coincide

with the degree of stakeholder influence and impact upon the mega-project. The degree of

stakeholder involvement and impact can be better categorized and quantified through

analyzing each stakeholder against an influence and interest grid, this will assist in the

determination of the stakeholders and support in the process of managing these stakeholders

and the process of creating a communication plan.

There will be profound complexities regarding the National Oil Company (NOC), the

international Oil Company (IOC) and the private service companies, these will come in the form

of challenges associated with undertaking a joint venture for the mega-project, or whether it is

decided no joint venture is needed. Although Business Day (2017), claim that the project will be

a Public Private Partnership (PPP) venture, whilst using the Build-Transfer-Operate (BTO)

approach. Also NEPAD’s national coordinator Gloria Akobundu states, that the ICRC, NEPAD and

NNPC will set up a joint committee in the hopes of fast tracking the commencement and

execution of the mega-project and similar African projects to speed up the economic and

infrastructural developments within Africa. The implementation of the mega-project was signed

on a Memorandum of Understanding (MoU) in 2002, between NNPC, Algerian National Oil and

Sonatrach, and in 2009 Nigeria, Niger and Algeria signed a MoU to agree and to develop the

mega-project (Construction Intelligence, 2017).

It is likely that the mega-project will encounter a range of difficulties with conflicting countries,

there may be issues regarding planning permission and cross border issues between the three

countries; Nigeria, Algeria and Niger as well as subsequently Europe. It brings about questions,

whether the countries can collaborate successfully economically, socially and culturally to

facilitate the endeavor. It arises suspicion whether consideration has been given to other routes

that the pipeline could be constructed through, consideration may have been given to identify

what countries could work best together and the weighing up of options to possibly construct

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an under water pipeline diverting and eliminating other African countries by creating an under

water pipeline from Nigeria around the African coast to Spain. Although, this suggestion is likely

to create further complexities in terms of technical and operational complexities, as well as a

large increase in cost and the possible requirement for further expertise within this field.

The TSGP will indefinitely face competition complexities as gas providers globally compete for

European market custom. There is strong competition from OPEC, Russia and Middle Eastern

countries such as Saudi Arabia, Qatar and Kuwait. These Middle Eastern competitors will

benefit and have lower operational and extraction costs, meaning they are able to produce,

supply and distribute their resources to the European countries at a lower cost, consequently

lowering the demand for African supply and possibly impacting upon the TSGP project activities

and demand. However, this isn’t to say the TSGP project should not commence due to

competition, the African countries need not be leading providers for Europe, but this

competition can be regarded as healthy competition.

Augé (2010) suggests that European dependence on Russia gas supply is likely to increase vastly

in absence of a change in energy policy, with Russia already accounting for 25% of gas supply

for Europe. According to the Russian Energy Minister, the European Union will become

dependent on Russian gas supply of 70% by 2050. Whilst the European Union, are attempting

to diversify their gas supply to alleviate the dependence on Russia. Conversely, Russia’s

Gazprom, whom withhold “the world’s largest natural gas reserves and account for 11% and

66% of the global and national gas output” (Gazprom, 2017), have made significant attempts to

restrict the diversification of the European gas supply, by signing a MoU the NNPC to cooperate

with future oil and gas project within Nigeria (IHS Markit, 2008). This projects the Russian

governments power and influence globally, whilst the country can manipulate substantial

influence regardless of the country’s stagnating oil and gas supply (IHS Markit, 2008).

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Social Conflict Theory and Conceptual Model of Mega Projects

It can be accepted through the vast stakeholder dynamics of mega-projects alike the TSGP

project, that the project will encounter social conflict amongst stakeholder members. Jia et al

(2011) claims globalization is accountable for the increase in social conflict and that mega

projects motivate social conflict, possibly due to their large influence and impact. Jia et al

(2011) also claims that, “the interaction between a mega project and social conflict influences

politics, economics, environment regulate and other aspects of society”. Figure 1.3 is a

conceptual model of mega projects from a perspective of social conflict theory, created by Jia et

al (2011) in the attempts to increase understanding of the correlation amongst mega projects

and social conflict theory, and how these issues can be addressed.

Figure 1.3 – Conceptual Model of Mega Projects from a Social Conflict Perspective Source – A Study of Mega Project fro a Perspective of Social Conflict Theory, 2011

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Optimum Bias

All too often within mega –projects there is a culture of over-commit, over-promise and under-

delivery, this continues to be a challenge for mega-projects, and may be an occurrence of the

TSGP project. The under or over estimation of aspects within mega-projects, may be because

the individual making these false statements feel that the project cannot progress on the real

facts, that maybe the project may be rejected if the true facts are stated. Especially within

mega-projects, as everything is vastly enlarged, it can create a sense of distrust and concern for

the successful outcome of the mega-project, it may make individuals and collaborative

organizations relinquish from the mega-project as on paper the mega-project may not at first

instance appear feasible. The key stakeholders of the TSGP project will each be in an attempt to

obtain the best deal and stance from the mega-project, this is likely to occur through the false

or manipulative perspectives of the parties involved. It is difficult to overcome such task, as it is

strenuous to ensure parties are genuine in their statements and actions. Optimum bias and the

misrepresentation in planning can be overcome by adopting the Reference Class Forecasting,

developed by psychologist Daniel Kahneman which, resulted in the winning of the Nobel prize

in economics in 2002. Kahneman and Tversky’s work uncovered the term “the planning fallacy”

which, alike previously mentioned describes the decision making below “underestimated costs,

completion times, and risks of planned actions, whereas they overestimate the benefits of the

same action” (Flyvbjerg, 2007). This method is used to achieve accurate projections on similar

or previous ventures and can prove beneficial and credible for a mega-project alike the TSGP.

Procurement Method

The TSGP project will require a strategically thought out procurement method, to ensure the

effective contractual agreements are input and the appropriate contractual partners are agreed

upon for further commencement of the mega-project. The TSGP project is likely to outsource a

number of resources such as materials, employee expertise and construction tools, this will

require the advertisement and negotiation methods. The mega-project will more than likely

require negotiation amongst suppliers through a bargaining process, the variety of

procurement methods such as open tendering, request for information (RFI), invitation for bids

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(IFB) and request for quotation (RFQ), are just a few of the procurement methods the TSGP

could adopt. However, it can be suggested that the Two Stage Tendering or Restricted

Tendering may be most beneficial for the TSGP project, as the mega-project will be restricted

on quality suppliers, materials and expertise. Whilst the Two Stage Tendering is usually

associated with projects, which are not restricted by the time limit in securing project contracts

(Sponaugle, 2014), and as, we can understand the lengthy time frame and delay in the TSGP

project there appears leeway and flexibility within the commencement and execution, allowing

for the most effective contractual agreements to be made. The TSGP project will also be in a

position to achieve economies of scale, as they will for example require a large number of the

same materials to construct the pipeline.

Benefit and Value

It may be evident that the initial value and benefit of the TSGP project is unclear at first

instance, given the depth and degree of the entire mega-project along with the profound costly

budget and lengthy time frame. Similarly as previously mentioned within the optimum bias

section, a culture of unclear, over-stated and vague benefit and value of mega projects alike the

TSGP is often stated. On the other hand, the value and benefit can be appreciated from a

consumer perspective, as the TSGP aspires to supply northern African countries, as well as the

European benefit of diversifying their gas suppliers. The value and benefit of the TSGP project

from an organizational perspective may not be evident until way beyond project closure, as

return on investment is lengthy given the overall cost, and this value and benefit can be

transitioned to stakeholders as project benefits tend to materialize over time, for instance the

possibility of an increase in Nigerian GDP as a result of the mega-project. Additionally, figure 1.4

represents where the United Kingdom obtains their gas supply from, with British production

decreasing it highlights the future demand for differing sources of providers. Clearly, expressing

the future benefit and value sought by obtaining Nigeria, Niger and Algerian gas supply and

contractual partnership. The benefits and value of the TSGP project go beyond the supply of

gas, but the value and benefit can be interpreted and achieved through further methods such

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as realization of enhanced and developed relationships, which in turn can generate further

endeavors between the countries involved.

Complexities in Phase by Phase Management

The life cycle of the TSGP project will undoubtedly be lengthy in its time frame, given the

degree of the mega-project itself. The mega-project life cycle can be seen in figure 1.5, and

although the project appears to be in between phase two and three, there remains

uncertainties as to the development of the project due to the source which the life cycle

Figure 1.4 – British Gas Supply Source – British Gas, 2017

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diagram was obtained and adapted from, it is likely that the project is in a different phase of

execution as the source is likely to be outdated. With this being said, the mega-project is far

behind schedule, with the attributions of security concerns over the pipeline, ongoing

regulatory and political uncertainty in Nigeria and increasing costs, contributing to the delay of

the mega project (Energy Mix Report, 2016). The life cycle diagram can be seen within greater

detail within appendix 1.3. The culture of mega-projects and their interdisciplinary nature

makes them more complex to manage as the reliance on aspects of the work-breakdown

structure completion is required to progress onto further stages of the project life cycle and

work breakdown structure.

Figure 1.5 – Trans-Saharan Gas Pipeline Project Life Cycle Source - http://addisababa.mfa.ir/uploads/Nigeria_-_Algeria_Pipeline_19959.pdf, n.d

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Supply Chain Management

Figure 1.6, illustrates the gas supply chain for the TSGP project, having identified the upstream,

midstream and downstream aspects of the supply chain. It is believed the upstream

stakeholders and partners will be responsible for the gas exploration and extraction, this is

believed to be the responsibility of NNPC, Sonatrach and Sonidep, as they are experienced and

operate within the oil and gas industry. The midstream stakeholders for this mega-project are

likely to again be NNPC, Sonatrach and Sonidep. With uncertainties regarding who is

responsible for the distribution of the gas refineries once it has arrived at its destination, it is

possible the downstream stakeholders and partners may be the European Union as well as the

Northern African countries.

As can be seen from figure 1.7, the leverage, strategic, non-critical and bottleneck suppliers

have been identified. The TSGP project will require some degree of outsourcing from materials

and resource providers to execute the pipeline. The project will require a distribution channel

to serve the large and varied market customers in terms of personal, industrial and

Figure 1.6 – Trans-Saharan Gas Pipeline Supply Chain Source – Authors own work

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organizational. The project will need to ensure the appropriate and trustworthy suppliers are

chosen to maximize the likelihood of a successful project outcome, suppliers must ensure

delivery is on time, failure to do so will result in the contractual breach of terms of condition

and may ultimately result in fines and a poor reputation.

Risk

Management

The strategic risk management of mega projects is a critical element towards the successful

management of mega-projects. Risk management appears to be an underdeveloped area

within the mega-project management literature (Irimia-Diéguez, Sanchez-Cazorla and Alfalla-

Luque, 2014), and this area requires further research, development and effective approaches to

manage the risks and uncertainties that are likely to creep up throughout the extended time

frame of a mega-project. In the context of mega-projects, “there are high levels of complexity

Figure 1.7 – The Kraljic Portfolio Purchasing Model, Supplier Identification Source – Purchasing Must Become Supply Management, Peter Kraljic, 1983

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along various dimensions” (Remington and Pollack, 2007, cited in Sanderson, 2011), which

supports the requirement for an advanced approach to dealing with the complex risks and

uncertainties of a mega-project. Within appendix 1.4, a risk identification register has been

created listing merely a few of the masses of risks and uncertainties associated with such a

large mega-project.

The mega-project will indefinitely encounter a range of complex risks and uncertainties, such

as, the actions of the Movement for the Emancipation of the Niger Delta (MEND), they have

previously vandalized an oil pipeline within the River State in 2009 (African Intelligence, 2010),

and have “explicitly threatened to strike out at the TSGP” (Augè, 2010). There are also high risks

in terms of funding, as the mega-project is a combination of public and private funding, as well

as a the competitor threat from Russia, Middle Eastern countries and non conventional energy.

The pipeline security threat is also a substantial risk, which has as previously mentioned,

contributed to the delay in commencement of the project. Further more, there is political

violence, serious human rights challenges as well as the violence and insecurity persisting

following the capture of the militant group Boko Haram (Human Rights Watch, 2016).

The TSGP project can enhance their mega-project risk management through the categorization

of risks, in an attempt to improve understanding and the overall management and approaches

used to tackle the risks posed. Flyvbjerg & Rottengatter (2003) differentiate between four

categories of risks; cost risk, financial market risk, political risk and demand risk. This can be

argued to be a basic and underdeveloped approach to managing the risks and uncertainties of a

mega-project, as not all risks and uncertainties will fit into these categories appropriately. This

approach in itself can fail in the identification of risks and is merely not a strong and structured

enough approach to managing the risks of mega-projects alike the TSGP requires. However,

Ward and Chapman (2003), propose a broader perspective is required for mega-project

management and the management of uncertainty over risks is needed. This approach must be

more efficient in the identification and management of mega-project risk, as they develop and

emerge continually throughout the extended life time of a mega-project. The proposal of a tight

repeated micro monitoring approach to the risk and uncertainty management of the TSGP

mega project is given.

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A decision tree has been created and analyzed within appendix 1.5, to illustrate and discuss the

uncertainties surrounding the pipeline diameter and recommendations for the overall decision.

Governance

The increasingly popular theme of governance within project management, reflects a broader

perspective and focus diverting away from the historically focused technical and operational

tasks of projects (Sanderson, 2012). The high level of governance is needed within mega-

projects alike the TSGP to ensure appropriate decision making and procedures are carried out

in the best interest and beliefs of the organization. To enable maximum success, governance is

needed at executive level to allow it to flourish throughout the entire mega-project (Rayner and

Reiss, 2013). A strong governance structure is needed to ensure project transparency and

accountability, as the TSGP project may battle against corruption and experience complexities

in the decision-making control mechanism. The failure to adopt and appoint a strong

governance structure into the TSGP project will transpire to lack on control of the overall

project, therefore its criticality and implementation is essential for the successful delivery of

this mega-project.

Cost and Time Management

The management of cost and time for the TSGP is essential, as the project has already been

experiencing huge delays with its commencement. The weighing up of cost efficient decision

has more than likely been conducted already, for example the method of transportation has

been considered to be most cost efficient, rather than to transport the gas by lorry or train as

this method is proposed to be more dangerous (Westenhaus, 2013). It has also been suggested

that 75% of the entire gas which is transported globally is done so by pipelines (Deshpande and

Economides, 2005), which highlights the cost efficiency within this method. Figure 1.8

illustrates the alternative option for natural gas development, which more than likely has been

considered by the TSGP project board. There may be further improvements with capital and

time efficiency, through the adoption of methods such as Just-In-Time (JIT) and Kaizen. It could

also be suggested, to assess alternative options for pipeline and construction materials to

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ensure maximum efficiency of the mega-project. Capital efficiency may be further achieved

through lean management, which is discussed in more depth within appendix 1.6.

Figure 1.8 – Natural Gas Transport and Development Alternatives Source – Natural Gas utilization in Nigeria: Challenges and Opportunities, 2010

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Conclusion

In conclusion, we can accept that the TSGP project is a vastly complex mega-project with a

number of risks and uncertainties surrounding it. The mega-project will be a complex task to

undertake successfully, in terms of cost, time, budget and deeper complexities such as security,

human rights challenges, technical complexities and conflicting priorities from a number of

stakeholders. Although, the project faces competition from a number of sources such as Russia

and non-conventional energy, it should not deter the mega-project from commencing, as profit

and benefit of the overall mega-project can be understood as the value and benefit materialize

over time. The mega-project can champion this venture through learning from previous project

like the trans-med gas project, as well as benefitting from a vast degree of expertise within the

industry. The mega-project will require tight monitoring and control throughout all aspect to

ensure the effective risk and uncertainty management, as well as the overall successful delivery

of the mega-project. This report has attempted to cover the main aspects of which the Trans-

Saharan gas pipeline project will encounter, by also giving suggestions where appropriate to

recommend approach and improvements for the successful delivery of the mega-project. The

gaps within analysis of this report have been discussed within appendix 1.6.

Word Count - 5021

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Appendices

1.0 Trans-Saharan Gas Pipeline project objectivesSource – Africa Power Vision Concept Note & Implementation, from Vision to Action, NEPAD

Project ObjectivesDiversification of export route for marketing Nigerian natural gas

Creation of wealth by opening up economic growth opportunities in the sub-regionBoosting the GDP and improving the living standards of the people within the sub-region

Boosting domestic gas supply within the regionAssisting in the fight against desertification through sustainable and reliable gas supply

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1.1 Trans-Saharan Gas Pipeline project SWOT analysis Source – Authors own work along with NEPAD

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1.2 Trans-Saharan Gas Pipeline project PEST Analysis Source – Authors own work

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1.3 TSGP project Life Cycle Source – Adapted from http://addisababa.mfa.ir/uploads/Nigeria_-_Algeria_Pipeline_19959.pdf

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1.4 Trans-Saharan gas Pipeline Project Risk Identification

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1.5 Trans-Saharan Gas Pipeline Project Decision Tree to analyze the uncertainties regarding pipeline diameterSource – Authors own work, figures adapted from The Trans-Saharan Gas Pipeline: An Illusion or a Real Prospect, Benjamin Augé, 2010

This decision tree was created to illustrate and analyze the uncertainties surrounding the

decision to create a 48inch diameter pipeline at a cost of $10billion, which would allow for the

exportation of 20billion cubic meters of gas per annum, with an expected internal rate of return

of 15.5%. The second option is to create a wider 56inch diameter pipeline, at a higher cost of

$13.7billion, which would allow for the exportation of 30billion cubic meters of gas, with an

expected internal rate of return of 25%. Although a more costly venture, the 56inch diameter

pipeline will have the capability to export and transport a higher volume of gas which in turn,

will generate a higher rate of return on the project. It appears the most sensible decision to

make, as following the return on investment, there will be a higher profit margin for future

years to come. Therefore, the suggestion concluding on a decision to create a wider 56inch

diameter pipeline is proposed, which supports cost efficiency, the sustainability and output of

the overall mega-project.Supporting this decision Nguyen and Douglad-Westwood (2013), claim

that “the trend toward the increased adoption of natural gas in the global energy mix is driving

the increase in pipe diameter”.

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1.6 Gaps in Analysis

Change & Agile Management

Effective change management will be required to facilitate the vast changes that are likely to

occur throughout the extended time frame of the TSGP project. The adopting and creation of

an agile organization can support in the resistance to change, and assist in overcoming of

obstacles along the way towards a successful project outcome. The less resistant to change an

organization is, the sooner the project and organization are able to progress and adapt

accordingly to the changes when they occur. It is personally believed that, an organization,

which practices effective change management and is an agile organization, conquers in the

journey towards maximum project maturity. Which as previously mentioned, is required to

reach maximum success and is seen as a stepping stone towards project excellence.

Lean Management

Closely corresponding with the above, and continuous improvement is lean management, the

requirement for the adoption of lean management is to systematically achieve incremental

changes to further champion and improve the overall efficiency and quality of the project. The

TSGP will require the adoption of lean management to maximize their efficiency within all areas

of the mega-project not limited to cost and time, but efficiency saving can be achieved within

all areas. The aim is to reach maximum efficiency within project management to ensure

excellence is achieved through the mega-projects activities and operations.

Project Management Office

The TSGP will require a strong project management office to manage, facilitate and support the

project and program managers within their activities. The project management office can

support with the overall governance, and it will enhance the organization and management of

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the overall mega-project, given it vast size. Along with the governance structure, the PMO will

work collaboratively to ensure the mega-project maintains the highest possible standard and

quality of its operations. This can be seen as a risk mitigation procedure as it ensures best

practices and seeks for further efficiency and tighter controls on monitoring, which is what this

mega project requires.

Sustainability

The overall project may appear sustainable for the future supply to the European Union,

diversifying the EU gas suppliers. However, it brings about question on how sustainable the

resource of gas reserves are, it is unknown the amount of gas reserves which are left in the

world, which is worrying, and further supports alternative solution such as non conventional

energy. The mega-project can achieve further sustainability through, delivering more with less

this being closely aligned with efficiency as previously mentioned.

Lessons Learnt

The TSGP project can learn from similar venture undertaken previously such as, the Trans-

Mediterranean Natural Gas Pipeline constructed in 1983, it’s use is to transport natural gas

from Algeria to Italy via Tunisia and Sicily. This mega-project is very similar to the TSGP, as the

project would have encountered similar complexities, uncertainties and risks, such as, the

conflicting priorities of a vast number of individuals, organizations, countries and governments

involved. Although there is a vast difference in project years, the TSGP project may be able to

complete the workload faster given advanced technologies and expertise. The TSGP can learn

from such projects and how they were able to overcome certain obstacles, and possibly

implement methods and approaches to champion these drawbacks.

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Suggestion

It can be suggested for TSGP project to successfully manage and operate their activities

effectively, that the incorporation of program management is used, with program managers

being responsible for each program, and further a risk officer can be appointed for each

program, to work closely with the program manager to ensure the effective risk and uncertainty

management is done throughout the mega-project. As a high level of micro monitoring will be

required to ensure the successful management and delivery of the overall mega-project is

achieved.

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