Owners reduce risks on major capex projects with interface management

As capital projects become larger and more complicated, requiring numerous work packages distributed across multiple contractors, some owners are improving the outcome through interface management solutions.

The Ft McMurray fires in Alberta in 2016 led to mandatory evacuations of the city and major risks for a brownfield project there, but Interface Management helped get the project back on track.

Petrochemical Update hosted a webinar case study exploring how the use of successful Interface Management for a $13 billion greenfield Canadian oil and gas project with thousands of interfaces mitigated some major risks by controlling issues from an early stage of the project’s life cycle.

Kelly Maloney, an expert in EPC and owner interface management implementation, and Stephen Airey, an industry veteran with 25 years of global project execution experience at BP, Shell, and Husky Energy led the webinar discussion.

The Construction Industry Institute (CII) defines Interface Management as the management of communications, relationships, and deliverables among multiple interface stakeholders.

“Experienced project managers and interface managers are looking for better ways to identify, record, monitor, and track all project interfaces – everything from flange connections between pipelines to complex tie-ins to existing facilities,” said Kelly Maloney, senior product manager with Coreworx for Interface Management.

Case Study

The project discussed in the webinar was a $13 billion total installed cost (TIC) project located in a remote northern location in Canada. The name of the project was withheld.

The site was so remote that infrastructure, roads and buildings to support development and construction of the site all had to be built.

“Even with the challenge of such a remote location, the project was considered one of the best undeveloped long-term aspects in the region,” Maloney said during the webinar. “This was based on product quality, size, and production volumes which were 194,00 barrels/day and mine life, which was supposed to be more than 60 years.”

Complexity was high involving both upstream and downstream, infrastructure, accommodations, mine, production, pipeline and transportation facilities and brownfield tie ins that had to be managed. The construction was a very long project running six years from FEED to on-stream.

“The project was very complex and had all the hallmark characteristics that contribute to a high-risk capital project. This type of complexity and risk is not uncommon in today’s projects,” Maloney said. “What sets this project apart was some of the additional challenges this project had to overcome and how they successfully addressed these difficult and unique challenges.”

Project challenges

This project interfaced a top 10 risk with three joint venture partners including the operator, 10 globally dispersed contractors and a full spectrum of contract types.

Contractor turnover

Contractor turnover is a high risk for any project and it materialized on this project. The challenge the team had was violations in the field where they had to dismiss and remobilize a contractor.

Luckily the disciplined approach they had migrated through engineering and into construction meant they had captured those soft interfaces, who had committed to do what and when, and whether those tasks or activities had been completed.

“This allowed the discovery team to come in and know where the project was when the contractor stopped as well as help them with any potential litigation that might come up and bundle up the scope of work that was outstanding to support rapid tendering and remobilizing for the new contractor,” said Stephen Airey, director of global projects and solutions for CoreWorx.

“They used the interface register to get the new contractor up to speed,” Airey added. “They were able to rapidly transition from a very difficult phase and bring on a new contractor to complete the work smoothly. Here interface management enhances that contract tendering process.”

Early Greenfield/Brownfield Operations

The project team had processes and procedures in place for maintaining safe handover of tie-ins.

Early on there was a No lost time incident (LTI) between a contractor handover, but the team knew the project needed additional checks and balances.

“Recognizing the number of actors in the field, they knew they needed additional checks and balances on top of their best practices,” Airey said. “This drove soft interfaces confirming who would do what, when, and what they would supply.”

Interface documentation and the status of agreements were captured in the handover binders to add another layer of safety, security and reassurance.

Critical Milestones

A big issue was the large number of contractors and limited schedule integration for high level detailed dependencies.

To meet critical milestones, the team had five contractors in one geographical area and one week to complete interface tie-ins for these detailed activities.

Coreworx Interface Agreements established priority and drove collaboration by making sure that scope and execution timelines were aligned. Collaboration ensured a safe and successful completion.

Environmental/weather risks

The Northern Canada location meant a risk for floods and forest fires and potential activity and site shutdown. The project team focused on the critical path and potential risk impact plan for worst case scenario.

“These environmental and weather concerns always end up on a risk register. This team had a lot of plans in plans in the event of a weather emergency, including evacuation and shutdown plans,” Airey said.

The worst weather cases did materialize, as floods and major forest fires both shut down the entire site for weeks.

Coreworx Interface agreements captured the outstanding scope and the team effectively recovered and prioritized scope to ensure a safe and successful re-start, Airey said.

In 2016, a major wildfire began southwest of Fort McMurray, Alberta, Canada. With an estimated damage cost of C$9.9 billion, it is the costliest disaster in Canadian history, according to the Insurance Bureau of Canada.

Catastrophic flooding in the same area was also added to the list of weather dangers experienced during this project’s lifecycle.

This project team lost multiple weeks on their schedule in different scope areas from these disasters.

Interface Management enhanced the procedures the team had for stop work, demobilize, and remobilize because the team captured what had been done up to that point of stop work.

“When the project team remobilized, they knew what needed to be done immediately to complete the schedule, what was secondary priority, and what they could potentially push off and put on to the next team,” Airey said.

“Interface Management allowed them to effectively recover and prioritize to stay on schedule. It enhanced their current business plans and procedures to create additional value to the team,” Airey added.

By Heather Doyle

Kelly Maloney and Stephen Airey will also be at the Downstream Conference & Exhibition in Galveston, Texas this May 31 and June 1. They will be at the Coreworx booth – Booth D14.