Capital Project Management Support

Tom Wolf                          twolf5165@gmail.com                                    (281)565-4038

 

International Projects – Planning Considerations


T.E. Wolf, Sugar LandTexas

 

(Please note this is copyrighted material, it is provided for your information.  Please feel free to use it, but please don't abuse the copyright.  Thank you.)

 


Overview


Below is a checklist document that can be used when planning a project.  It is specifically written to address the international project, but obviously is valid for any project.  All information or items may not be applicable to any one project.  Any one project may have an item not included in this list.



Planning Considerations

 

1.       Overall Considerations
    1. Schedule impact due to ocean freight
    2. Freeze design early
    3. Buy early
    4. Expedite heavily
    5. Set construction strategy early
    6. Provide construction with maximum float

 

2.       Impact on Schedule due to Ocean Freight

    1. Consider Durations Ex-works and ETA from:
      • USA
      • Japan
      • Europe
    2. Consider Type of Vessels
      • Container ships depart weekly
      • Break Bulk shipments require chartering
    3. Consider Average bulk material Delivery Durations
      • ARO about 6 months


 3.       Impact on Schedule due to Potential Delays

    1. RFQ Process
    2. Engineering/Client Releases for PO
    3. Design Changes
    4. Vendor Slippages
    5. Inspection Coordination
    6. Material Testing Requirements and Documentation
    7. Transshipment Coordination
    8. Break Bulk Shipment
    9. Customs Requirements

 

4.       Execution Plan

    1. Consider location
      • China – use of design institutes and construction brigades
      • Singapore – modules wherever possible
    2. Establish Construction Execution Strategy early
    3. Consider labor availability
    4. Consider infrastructure to accommodate labor
    5. Consider permitting requirements
    6. Establish personnel policies early
      • Local
      • Expat staff and dependent expenses
        • Relocation
        • Salary uplift
        • Living allowance/housing/travel
        • R&R
        • Educational assistance
    1. Consider camps and catering requirements
    2. Consider language difficulties
    3. Consider communication costs/benefits (electronic versus slower courier services)


 5.       Engineering Execution

    1. Freeze P&IDs early
    2. Manage change aggressively
    3. Consider Technical Requirements, e.g.
      • Local Authority Approval requirements
      • Local Code requirements
      • Material Testing Requirements
      • Noise Control requirements
      • Pollution (air, ground, water) Control requirements
      • Carbon content of pipe
      • Use of Direct Burial Cable
    4. Buy early
      • Not just critical equipment
      • Providing Secondary MTO quantities at Preliminary MTO timeframe
    5. Maximize use of local material and impact on design
    6. Maximize use of local practices and impact on design
    7. Consider use of local engineering company for Authority Package preparation
    8. Provide engineering support for local fabricators
    9. Maximize use of electronic transmission of data and information
    10. Consider consumable requirements
    11. Sense of urgency

6.       Procurement Execution
    1. Buy early
    2. Consider sole sourcing
    3. Customs and Duties requirements
    4. Understand import restrictions
    5. Government Inspection requirements
    6. Understand local supplier content requirements
    7. Consider dedicated Materials Management Group
    8. Dedicated Material Management efforts for:
      • Piping bulks
      • Electrical and instrument bulks
      • Material flow to shops and to site
      • Material Tracking and Reporting
        • RFQ Status
        • Material Testing Report tracking
        • Material Status
        • Piping Material available for Shop Fabrication
        • Percent Material arriving at site
    9. Dedicated, aggressive Expediting efforts
      • With vendors
      • Source expediting
    10. Consider site purchasing abilities versus home office
    11. Worldwide Inspection coordination
    12. Expect and plan for delivery slippages

7.       Traffic Execution
    1. Detailed Traffic Plan
    2. Coordination of Break Bulk Shipments
      • Minimum 500 metric tons
      • Consolidation of freight
    3. Coordination with global Freight Forwarders, Customs Brokers, Export Packers
      • Ocean freight
      • Air freight
    4. Clear understanding of Marine Insurance and Liabilities
    5. Clear understanding of permits and requirements
    6. Expect Changes in Government Regulations
    7. Expect and plan for delays
    8. Ocean Freight versus Air Freight
      • Ocean freight – cost per unit weight
      • Air freight – cost per unit weight

 

8.       Construction Execution
    1. Delay start of construction as long as possible (to allow backlog of materials)
    2. Understand local permitting, licensing, registrations, regulations and agent requirements
    3. Understand import duties and taxes, local taxes, fees, land use, and income tax requirements
    4. Understand local labor benefits, special holidays, holydays, annual bonus’, completion bonus requirements
    5. Develop list of local contractors early
    6. Understand labor broker arrangements
    7. Determine need for craft training
    8. Allow time for craft training
    9. Understand labor restrictions, e.g. use of overtime
    10. Tend to be labor intensive, consider saturation levels
    11. Consider local culture for safety
    12. Consider safety enforcement
    13. Consider medical facilities, personnel, and supplies
    14. Expect and plan for lower productivity
    15. Special efforts to manage local contractors
    16. Adequate expat support staff and vendor reps
    17. Allow adequate time for mobilization
    18. Consider availability of heavy cranes (100 t and above)
    19. Consider contractors ability to supply materials and consumables
    20. Consider providing small tools and consumables

9.       Summary
      • Consider schedule impact due to ocean freight
      • Buy early
      • Freeze P&ID design early
      • Utilize heavy expediting
      • Provide construction with maximum float

 

 

Also see CII Document:  SD 89 Alliances in International Projects.


This website’s goal is to provide a source for project management support, information, education, and training material for project managers and project engineers primarily in the refinery, petroleum, and petrochemical industries.  In the execution of these projects, the project manager or project engineer may find the need for additional information and support; most times this support will come from within his or her company.  But there are times additional sources are needed.  This website is intended to meet those additional needs.

 

Project success is a function of the people skills and a broad understanding of diverse subject matter of the project management team.  Scope definition, execution considerations, construction strategy, planning and schedule impact, resource utilization, overcoming difficulties and problem solving, etc, etc, etc, are just a few to enumerate even without addressing the technical side.  Then there is the cost, estimating, and estimate side, factor estimates, detail estimates, forced detail estimates, basis of estimate, construction wage rates, and so on.  Then there is the technical side, material issues, piping systems, equipment considerations, civil and structural, electrical and control systems, document control, specifications, standards, and regulations.  Then there’s the variety of processes both refining (hydrocrackers, delayed cokers, etc.) and petrochemical facilities, the list is almost endless.

 

Project management is as much art as science.  The key is to continue to learn and never stop learning.




Tom Wolf has over 40 years petroleum and petrochemical experience, including 25 years in project management.  He holds a BS degree in Mechanical Engineering.

 

 

 

© 2013 by Thomas E. Wolf.  All rights reserved.  No part of the information contained in these webpages may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage or retrieval system without written permission of the copyright holder, except for the inclusion of brief quotations in a review.