EPC groups invest in data analytics to accelerate complex projects

In-house data scientists will raise productivity on U.S. petrochemicals projects in the coming years by maximizing insights from growing project datasets and multi-dimensional modelling, leading EPC executives said.

A wave of new Gulf Coast ethane cracker projects has tested the productivity of the U.S petrochemicals industry as construction teams grapple with increasing project size, rising project complexity and new processes such as modular build.

There are currently eight Gulf Coast ethane crackers under construction. Six of these are slated to come on stream by the end of 2017, representing more than 7 million tons per annum of new ethylene capacity. In a second wave of projects, ten more ethylene facilities have been proposed for the Gulf Coast and the U.S. Northeast, eight of which are in development.

The first wave of large scale projects saw increased collaboration between operators and contractors and learnings are being used to improve efficiency on the second wave of projects, Joe Thompson, Senior Vice President, General Manager – Downstream & Chemicals, Bechtel Oil, Gas & Chemicals, told the US Downstream Growth Opps Webinar on March 15.

"These jobs ended up being more complex, more challenging and more costly than was anticipated," Thompson said.

"The lessons that we've we learned in the first [wave] are absolutely incorporated into our way going forward...around how we design and buy and execute the jobs in the field," he said.

Surging U.S. construction activity and competition between sectors have tightened the supply of skilled labor to petrochemicals projects and a range of new data analytics tools have been developed to boost productivity.

Bechtel has invested in data analytics in recent years and this has enabled the company to streamline processes and identify areas to improve, Thompson said.

The company has created a data analytics team, hiring data scientists to mine the company's growing datasets. Data analytics, along with the deployment of the latest handheld devices and 4D and 5D modelling, has improved decision-making in areas such as piping productivity and staff logistics, Thompson said.

"It's really paying big dividends for us...we see data analytics to be a big differentiator in the future," he said.

               Indirect Gulf Coast cracker costs (capacity 200,000 mt/yr)

                                                      (Click to enlarge)Note: estimated costs. Source: US Ethylene Plant Construction Costs Quarterly Update Q4 2016 report.

Data mining

Fellow EPC major Kiewit Corporation has also invested significantly in data analytics technology. The Nebraska-based company has used SAP software to track project productivity data on a granular level and it has also hired data scientists to generate insights, Tom Shelby, Executive Vice President at Kiewit, told the Webinar.

The SAP software has allowed Kiewit to build up "6 to 7 years" of quality datasets which will generate further productivity gains going forward, he said.

Kiewitt also acquired software company InEight and introduced a suite of custom software solutions designed to raise productivity on engineering and construction projects.

InEight solutions are built on open platforms and can be integrated with other key project-related solutions, such as design, scheduling, timesheet, financial, and Enterprise resource planning (ERP) systems.

Kiewit implemented solutions such as 4D modelling, 3D interfaces, foreman productivity tools and safety data analytics and these have boosted safety and productivity levels, Shelby said.

"We put a big investment into that, in terms of time and dollars," he said.

One major challenge for EPC firms is attracting millennials into the construction sector and the use of the latest data modelling and handheld devices is helping to train younger workers.

The Engineering and construction sector has changed significantly over the last twenty years and workers must now be trained for a "high-tech business," Shelby said.

"Everything we do is electronic...it's a faster pace, a much more "intelligent" business if you will, and we have to get that out there to the colleges and to the craftsmen and train them," he said.

LNG waves

Recent announcements by major oil companies have signalled sustained demand for new downstream projects, particularly along the Gulf Coast.

ExxonMobil plans to spend $20 billion in 2013-2022 on 11 Gulf Coast refining, petrochemicals and LNG export projects, Darren Woods, ExxonMobil's newly-appointed CEO, announced March 6.

The projects will expand ExxonMobil’s chemical manufacturing and export capacity, taking advantage of low-cost shale production to forge downstream advantages. Most of ExxonMobil’s planned new Gulf coast chemicals expansions are targeting export markets in Asia and other regions.

In addition to new petrochemicals plants, the shale gas boom prompted a surge in new LNG export terminal projects. U.S. liquefied natural gas (LNG) exports are set to rise sharply in 2017 and 2018, due to new export capacity which will turn the U.S. into a net exporter of gas, EIA said in its latest Short-Term Energy Outlook, published in January.

Cheniere's Sabine Pass facility in Louisiana became the first operating LNG export facility in the Lower 48 states in 2016 and capacity is to be expanded this year. In addition, Dominion's 0.82 Bcf/d Cove point liquefaction plant in Maryland is due online in December 2017 while Sempra Energy's 2.1 Bcf/d Cameron LNG and Freeport LNG's 1.8 Bcf/d Gulf of Mexico plants are scheduled to start up in the second half of 2018.

                                        US LNG exports outlook

Source: EIA's Annual Energy Outlook 2017

Some operators such as ExxonMobil are proposing to build additional LNG capacity in the Gulf Coast region and Shelby predicts there will be at least one more wave of LNG export projects in the coming years, consisting of small and large facilities.

"I don't think we are done with approvals for LNG projects in the U.S. yet," he said.

Petrochemical Update