EVOLUTION OF PROJECT ＆ PROGRAM MANAGEMENT AND ENGINEERING IN
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EVOLUTION OF PROJECT ＆ PROGRAM MANAGEMENT AND ENGINEERING IN PROCESS PLANT PROJECT-QATARGAS LNG PLANT PROJECT- MASAYUKI ISHIKURA ( Managing Director, Project Management Professionals Certification Center（ Pmcc ) 1. INTRODUCTION Chiyoda Corporation, a leading Engineering Contractor in Japan, completed multi billion US$ LNG Plant Project in Qatar recently. This presentation introduces the outline of Qatargas LNG Plant Project, and how managed in view of integration of project & program management and engineering. Under the global competitive environment in process plant EPC (Engineering, Procurement and Construction) business, project management and engineering approach is rapidly evolving by implementing IT (Information Technology). Each of the plant EPC projects is quite unique and the business is hard to be formulated. There have been many software applications and IT tools used in this industry. Until recently, they were used more or less as discrete solutions. Now, things are changing because IT is now getting used in an integrated manner covering engineering and project & program management. One example is “i-PLANT21”. This is Chiyoda’s integrated and intelligent project & program management and engineering system covering whole the project lifecycle from front-end engineering to construction and hand-over. Engineering information is also being integrated spatially. An electronic document management system working over the Internet is a typical example. Now, multi-office project operation is getting popular, as everybody is keen to look for the best contracting formation, and the most economical and reliable material sources and human resources from the world. The largest benefit of such information integration is the fact that IT can virtually eliminate the distances in time and space. Particularly it can be focused on elimination of the distance between engineering and construction. Such evolution of project management and engineering occurs through many challenges and steady accumulated efforts in the critical situation of actual project execution. For this project, Project Management Institute of USA awarded the Project of The Year Award to Chiyoda, the first recipient outside USA, in 1999. 2. DESCRIPTION OF LNG PLANT PROJECT Background of Project The low CO2 emission rate of natural gas makes it ideal for combating the global greenhouse effect. LNG thermal power plants can achieve the lowest CO2 emission rate of any power plant using fossil fuels due to the inherent high hydrogen content of LNG combined with the application of modern gas turbine technology. LNG thermal power plants can achieve CO2 emission rates that are 35% less than for oil-fired thermal power plants and 55% less than for coal-fired thermal power plants. Better still, natural gas can minimize Sox and Ox emissions to the environment since it is a clean form of energy. This makes LNG a key fuel for coping with worldwide concerns on global warming. So, promoting the development of LNG or natural gas plants should expand worldwide market demand for natural gas. It is often remarked that LNG development program is inter-linked projects like a chain and this led the linkage being referred to as an “LNG Chain”. (Photo 1) The LNG chain typically consists of upstream facilities, a pipeline, liquefaction plant, LNG shipping, LNG receiving, power generation and power distribution links. The program or LNG chain costs more than US$ 10 billion in the QATARGAS LNG Plant Program case. Each element of the project chain is inter-linked with and dependent on the other elements. Delay in completion or a malfunction of any link in the chain or n the program will paralyze the total program, and the economic loss will be considerable due to the scale of investment involved. Therefore, each element of a project chain should be designed and installed to ensure stable and reliable operation for a long life of 20 to 30 years and, most important, the each element of program must be completed on schedule. Overall Flow Scheme -Process Units The Plant process system is supplied with feed gas from Onshore Upstream Facilities. Filtration and fiscal metering then take place in Common Reception Facilities before the feed gas flow is divided into three streams, one stream to each of the LNG process trains. Each LNG process train consists of Reception, Acid Gas Removal, Dehydration and Mercaptan Removal, Mercury Removal, Gas Chilling and Liquefaction Systems, Refrigeration, Fractionation, Nitrogen Rejection, Sulfur Recovery, and other units. Other Facilities In addition to the above, the plant consists of other facilities as follows: LNG Storage and Loading Sulfur Loading Electrical Power Generation Steam Generation Cooling Water PHOTO 1 LNG CHAIN PROGRAM Support Facilities Project Milestones The major Project Milestones of this project were: May 27, 1993 : EPC Contract for 1st and 2nd LNG trains awarded to Chiyoda with option for 3rd LNG Train. September 1, 1996 : 1st LNG Train completed and handed over to QATARGAS one month ahead of schedule. Earlier completion of this milestone allowed QATARGAS to accelerate startup activities. December 8, 1996 : 2nd LNG Train completed and handed over to QATARGAS three weeks ahead of schedule. December 23, 1996 : 1st shipment of LNG aboard LNG carrier “Al Zubarah” left Ras Laffan Port in Qatar. January 10, 1997 : 1st shipment of LNG aboard LNG carrier “Al Zubarah” docked at Chubu Electric’s Kawagoe Terminal in Nagoya, Japan -- 12,000 km from Ras Laffan Port. March 31, 1998 : 3rd LNG Train and its associated facilities completed. 3. MODERN TECHNOLOGIES APPLIED Dynamic Simulation around Refrigeration Compressors A dynamic simulation study of QATARGAS LNG plant was performed by a subcontractor, Special Analysis and Simulation Technology Limited (SAST), on the MR and Propane Compressors. The study was conducted using a SAST proprietary system called OTISS™ to build two dynamic models constructed according to the data supplied by Nuovo Pignone, the compressor manufacturer. The models consisted of independent Propane and MR cycles. Plant Operation Information System (POIS) The POIS premiered on this LNG plant project. Recent advances in computer technology have led to the application of total plant-wide information systems in LNG plant operations. In this application, the POIS provided a crucial link between the process control system and the business information system. The main users of the POIS are plant managers, operation managers and engineers. The POIS enables users to generate LNG production schedules, operator guidelines, summary and shift reports, and provides them with information on the LNG plant, such as equipment performance, product quality, safety, and environmental monitoring data. Advanced Process Control (APC) APC is used to increase production throughput, improve product quality, and/or reduce energy costs. LNG plants are usually required to operate at maximum load and on this LNG plant project, model-based predictive control algorithms were applied to achieve the following objectives: Maximize LNG production at Main Heat Exchanger Control quality at the fractionation section by maximizing valuable product and minimizing utilities requirements 4. PROJECT MANAGEMENT AND EXECUTION Project Concept and Objectives The Project Management established the following project mission at the start of the project: “To complete the 1st and 2nd LNG Trains 2 month early” All project members were educated about the project mission and its background; namely, to deliver the first shipment of LNG to Japan by the end of January 1997. This delivery date was an absolute imperative in view of the “LNG chain” project requirements, as well as the heavy contractual liquidated damages and penalty that would be imposed on Chiyoda and QATARGAS respectively for any delay. To ensure the contractual hand over date and scheduled LNG delivery to Chubu Electric Power Inc., Japan, an internal target schedule for the project was established. This target schedule aimed to complete Train 1 and Train 2 each two months early, and Train 3 six months early. All detailed schedules were developed based on this target schedule. A project policy of “utilizing only equipment proven for LNG plant projects” was also adopted. The reason was the requirement for a highly reliable, high-performance plant of "at least 95% plant availability with a scheduled turnaround once every three years." And, of course, cost control, quality control and a high standard of safety were pursued relentlessly. Project Management Tools Developed To optimize project execution, Chiyoda applied various types of tools and techniques to project management. These techniques were mostly custom-developed for corporate project management use, and incorporated state of the art technologies and commercial software. Some of the techniques, such as the Electronic Documents Management System, were specifically developed for this project to improve its execution. Some examples are introduced hereafter. Taskal-Pro: Engineering and Document Control System More than ten thousand engineering documents, including drawings, requisitions, specifications, data sheets, etc. were developed and issued. In order to control and track the status of each engineering document, Chiyoda developed Engineering and Document Control System called Taskal-Pro, and fine-tuned it for this project. This system was very useful in handling the huge amount of engineering documents necessary to support detailed scheduling and progress control of engineering work, as well as engineering document control, by producing various status reports and document transmittals in real-time on a database platform. The system was integrated with the index of the EDMS and produced various correspondence status reports, including exception reports for outstanding items, exception reports showing documents behind schedule, document revision history reports, distribution status reports for QA requirements and engineering progress reports by earned value. Electronic Documents Management System (EDMS) We considered the huge amount of drawings and documents that had to be handled for the project, and decided to utilize EDMS since it offered the following facilities and benefits which we had not fully realized on previous, similar projects: Centralized, structured storage and control of drawings and documents by electronic means Easy searching and viewing of documents Simplified and documented fast revision control of documents Easier multi-office operation, especially between the site office, equipment and material vendors and the project office The EDMS, together with Chiyoda's existing global communication network, undoubtedly enhanced the efficiency of project execution. A dedicated Intelsat communication link was specially established for this project between Chiyoda's Yokohama office and Ras Laffan site office. Project Material Management System Effective material management is one of the most critical factors for ensuring successful project execution, especially for a project of this scale and location. Chiyoda made use of its highly integrated capabilities in these areas which support all material classes with regard to specifications, quantification, requisitioning, purchasing, expediting, material tracking and field inventory, and construction monitoring covering: bulk material take-off and control, the Integrated Acquisition System, and at construction site, the Field Material Control System (FMCS). By means of this highly integrated Project Material Management System, the data flow from material take-off on the 3D model at home office to field material control was electronically streamlined and overall material management of the project functioned very effectively. ５. PROJECT IT Project IT Today Project IT may not be familiar to most of the readers. Chiyoda started using this term implying the meaning of “Use of Information Technology to achieve the basic project targets such as cost, schedule, quality, safety and environmental at a higher and integrated level”. In the front line of plant construction business, both a reliable steady approach and a challenging approach are required. Therefore, it is important to establish a tight link among the corporate management, the project team and the Project IT. It is particularly important that the Project IT is ready to provide reliable solutions to the project team who needs advanced technology for competitiveness. Chiyoda has established such a Project IT foundation through the long experiences of actual implementation of Information Technology to various projects. By the rapid growth of Information Technology well known as dog years, the environment around us has changed drastically since the age of Qatar LNG Plant Project. The needs for the Project IT have also been changed. Some key topics, we are focusing now, includes: (1) Concurrent engineering (2) Global operation (3) Engineering information management through the plant life cycle Chiyoda sees the trend that more and more engineering information is handled electronically and in an integrated manner to meet these needs. Integrated Information Management Chiyoda is trying to manage engineering information in more integrated manner. There are two kinds of integration, integration along the time and spatial integration. One example of integration along the time is “i-PLANT21”. “i-PLANT21” is Chiyoda’s integrated and intelligent project engineering system covering whole the project lifecycle from front-end engineering to construction and turnover. It provides a uniform platform to realize project engineering with high quality, low cost and accelerated schedule. Various “best of bleed” software applications are used as the sub-systems. But they are not merely a collection of applications. The related applications are interfaced together so that engineering information can smoothly flow among the subsystems maintaining the integrity as the project proceeds. What it achieved is an integrated information management along the time, • Compatible Data Base which is illustrated in Exhibit 2. • Smooth Migration Operation & Maintenance • Standardization Phase ICIMS shown in Exhibit 2 is an abbreviation of EPC Phase PLANT OWNER’S SYSTEM FS / FEED Phase “Integrated Control and Information Management Business System (ERP) System”, which is a typical plant owner’s system for FS / FEED IT EPC IT Maintenance Management System Technical Document System plant operation and maintenance. The smooth flow Deliverables Deliverables Contracting, Procurement System of information from the EPC systems like “i- Material Management System, etc. PLANT21” to such an owners system like “ICIMS” i-PLANT21 ICIMS is important from the view of total plant life cycle Integration information management. Exhibit ２ Information Integration Along Time i-PLANT21 Exhibit 3, “i-PLANT21”, shows the concept for “i-PLANT21” which consists of seven major sub-systems covering front-end engineering to plant completion. It is integrated electronically and utilizes standardized data and workflow. The seven major sub-systems are: (1) “i-FRONT”: The front-end engineering system which provides integrated functions of process simulation, database driven PFD, intelligent P&ID and automatic plant layout. The information from “i-FRONT” is electronically transferred to downstream systems as required. (2) “i-ENG”: The engineering database system for discipline’s design activities. The information is open and available to all relevant engineers working for the project. (3) “i-3D”: The integrated 3D design system i-FRONT i-DMS which all relevant engineers will use to Project Document Front End Engineering Management develop the spatial plant models, and the 1 1 8 ASPEN-Plus* , CAPES, ZYQAD* , i-DMS, ProjectWise* , 2 3 PDS P&ID* , EQDB, ASD OPD* , PLS C-COSMOS developed models including equipment, ENGINEERING piping, instrument, electrical, civil and i-ENG i-3D underground components can be reviewed Integrated 3 D Plant Design Engineering Database IDDB, PDDB, MDDB, 2 4 (PDS 3D Model DB) PDS 3D* , ISOGEN* at any time by discipline engineers and the EDDB, LLDB PROCUREMENT CONSTRUCTION client’s engineers using model review tools. All items will be constructed on a i-PMS i-MAT i-FIELD basis of shared understanding between the Project Management Material Management Construction Management 6 7 Primavera* , Artemis * , 5 MARIAN* , CHIYOCAPS, 4 SPOOLGEN* , PIC, client and Chiyoda. (4) “i-MAT”: The project material CPC Series , Precommi-kun PROTEUS, FMC, CPC-PRC FMC, QC-Info., C-Link management system, which will control Exhibit ３ “i-PLANT21” all materials at all, project phases from material take-off, procurement, and transportation to field construction. The material take-off information is electronically transferred from “i- 3D”. (5) “i-FIELD”: The field construction system which provides the functions for field material control, preparation of isometric/spool drawings linked to “i-3D”, piping welding control, plant turn-over control and schedule, cost and progress management. (6) “i-PMS”: The project management system which provides the platform to plan and execute the work, mobilize the resources, monitor schedules, costs and progress and take corrective actions. (7) “i-DMS”: The document management system which provides the platform to retrieve, review and monitor all project documents electronically including vendor prints. Spatial Integration of Information Now, multi-office project operation is getting popular, as everybody is keen to look for the best contracting formation, and the most economical and reliable material sources and human resources from the world. To cope with such needs, an integrated information management system like “i-PLANT21” and global communication infrastructure is required. This is an example of engineering information integrated spatially. An electronic document management system working over the Internet is a powerful tool used for such purpose. 6. LESSONS LEARNED Chiyoda’s Project Operation Division requires its Project Managers to hold a lessons learned session before closing out their project. This is normal practice. Usually, the overall session lasts 1 to 2 days, and in addition to the overall session, individual disciplinary sessions are also held. A 2-day session was held on this project. Participants included QATARGAS’s PTF Engineering Manager, the project team members, managers of all the disciplines, as well as the Project Manager. Detailed discussion focused on construction issues relevant to the EPC disciplines. To be constructive, the sessions are deliberately not blame sessions, but rather aimed at learning not only from our mistakes but also the good things that were done on the project. To ensure the lessons learned cycle is effective, Chiyoda deliberately assigns home office engineers to construction supervision positions wherever possible, which is rather unique in this field. 7. INDEPENDENT PROJECT EVALUATION The overall project performance was specifically evaluated by Independent Project Analysis Inc. (IPA). This is a summary of their benchmarked analysis: Cost Deviation : Overall, there was a nine- percent under run for the QGL project, which surpasses the Industry Average of no deviation. Absolute Cost : Chiyoda's cost was 11 percent less than the Industry Average based on a cost-capacity relationship. However, the cost was within the range expected for this type of facility. Execution The execution duration was 42 months, 1 month shorter than Schedule Deviation : the contract plan of 43 months. The two percent under run compares favorably to the Industry Average of a nine- percent slip in schedule. Safety : The lost time incident rate was 0, which is low compared to the Industry Average of 1.5. 8. NEW TREND OF PROJECT & PROGRAM MANAGEMENT “The Guide for Project and Program Management for Enterprise Innovation” or abbreviated as P2M, issued by the Engineering Advancement Association of Japan (ENAA) and maintained by MCC is intended to provide readers with an overview of the innovative program and project management guide for enterprise innovation by way of program and project management, which hopefully will serve as a gyrocompass for enterprise growth and survival in this globally competitive business and public services environment and will supplement each other with the existing international project management bodies of knowledge and project management competency standards. P2M has been developed by the Committee for Innovative Project Management Development Committee, a team of selected visionaries and practitioners of project management and program based business management drawn from project industries, academia and consulting disciplines, The key word throughout P2M is value creation to enterprises, either commercial or public, and a consistent chain from a mission, through strategies to embody the mission, a program(s) to implement strategies, to projects comprising a program. Cyclic Project Combination If a development type program has favorable results, future development will utilize successful experience for further improved programs. A development type program start with a conception project, prototyping a product and, if successful, proceed to a commercial design-build project. However, while structural data can be obtained in design and construction, comprehensive data can only be collected after the project is started. These comprehensive data are reflected in the subsequent program development. Scheme Three projects of the scheme model, system model and model service model are combined as a cyclic combination and the Apply service know- Propose a new type how to a new of system scheme development next project will spin off from the original cyclic model. This is called the cyclic project combination. In software Service System model model development projects, this type of development is called a spiral model since phases form spirals, and sequential combination is usually called a waterfall model. The Propose improvement with system know-how concept of a program extends the scope of the project concept to both, the upper stream and lower stream, acquires FIGURE 4 INTEGRATION OF PROJECT products from project systems or products, which is CYCLES reinforcement of processes, but does not stop there. A program recognizes the scheme model to plan a system and service utilizing the system as component projects. They also comprehensively collect, accumulate and process knowledge, know-how and data and have a mechanism to incorporate intellectual productivity improvement supported by knowledge management into design. What is important in program design is a viewpoint of pursuing value in the chain and not in segmented phases or projects, using knowledge and know-how acquired under a program; such value can offer a chain effect. 9. CONCLUSION The essence of this presentation is that complex projects in remote locations can be successfully completed if sound, innovative project management techniques and modern technology -- such as for data transmission, mechanical and chemical engineering, are used and the procurement, transportation, and fabrication of equipment and materials is carefully coordinated. The QATARGAS LNG Plant Project was one such example, and the new industry it developed will serve Qatar for many years to come. Qatar is now in the forefront of world-class suppliers of LNG as a source of secure and environmentally friendly energy for the 21st century. Finally, it is our considered opinion that applying the technologies and techniques described above, among others, advanced the technical values and image of the project management profession.