APRIL
2016
LNG
INDUSTRY
23
For the engineering design information, some FERC
conditions will require that materials be professional engineer (PE)
stamped, whereas other deliverables will not require PE stamps.
In addition, FERC uses the terminology ‘final design’ associated
with the level of detail necessary to be submitted as part of a
request for construction. The expectation by FERC is that ‘final
design’ is a point in the design whenmany engineering selections
have been finalised and, therefore, the design presents an accurate
representation of what the project will actually consist of. For
many engineering design deliverables, this means the design will
be at an ‘issued for construction’ state.
In the case of projects where an EISwill be issued, once the
FEIS is issued, the developer will have an even better definition of
the conditions, whichmay be included in the FERC permit. At this
time, the IP team should re-validate its work to determine if any
conditions have changed from the DEIS to the FEIS, and if the
changes to the conditions require changes to the project execution
strategy. For those projects where an EAwill be issued, this
re-validation step is not required, as the EAwill provide the only
indication of the likely conditions in the permit prior to its issuance.
Implementation plan execution
Once a FERC permit is issued, the interactions with FERC can
change. During the application phase, exparte rules are in effect,
which limit communications with FERC and all communications
are ‘on the record’. However, once the FERC permit has been
issued, FERCmay be able to enter into open dialogue with
the applicant. Therefore, CH·IV recommends that the IP team
plans a meeting with FERC staff shortly after issuance of the
permit to present the project’s implementation plan and review
any conditions for clarification to ensure alignment between
understanding and expectations.
Once FERC has approved a request for site preparation and
construction activities, the next steps for implementation planning
are as follows:
Monitoring changes from information submitted to and
approved by FERC.
Planning for on-site inspections from FERC, DOT PHMSA,
USCG, and state and local agencies.
Planning for commissioning approvals.
Monitoring changes is one of the more difficult and complex
tasks for the IP team. Even when a design reaches an ‘issued for
construction’ state, changes still occur. Some changes are the
result of HAZOP or LOPA activities, vendor information, and
equipment or field changes. All changes should be reviewed by
the IP team to determine if a change is significant. While the
term ‘significant’ is not defined, each IP team should develop
criteria to evaluate changes to determine if the change is
significant and requires a re-submittal of engineering design
information to FERC or DOT PHMSA. Significant changes could
be those that result in additional public safety or environmental
impacts not considered by FERC during its review of the
application and, therefore, part of the permit. The definition of
significant activity is critical because any change that is
determined to be significant and requires a re-submittal of
updated engineering design information could have an overall
impact on the project construction timeline and associated cost.
Therefore, it is important for the IP team, EPC contractor, and
owner or owner’s engineer to identify and discuss these changes
as soon as they are identified to ensure that any construction
timeline and cost impacts are minimised.
FERC has a requirement to perform inspections at least once
every eight weeks and will typically arrive on an eight week
schedule during initial site preparation and early construction
activities, with the frequency of inspections increasing once
construction proceeds towards mechanical completion,
commissioning, and start-up. The frequency of DOT PHMSA,
USCG, and state and local agency inspections may vary based
on the region. It is important to remember that FERC,
DOT PHMSA, USCG, and state and local agencies will be
reviewing different engineering design information and may
have differing requirements that must be incorporated into the
design. Therefore, a good IP teamwill be familiar with these
different requirements from the various entities that have
jurisdiction and will ensure that the EPC contractor is in
compliance with each before engineering design documents are
issued for construction.
Once all construction packages have been approved by
FERC, the next milestone for formal FERC approval is related to
commissioning items. Planning for commissioning items follows
a similar sequence as described previously for initial site
preparation and construction packages. The IP team should
begin to plan for commissioning packages during construction to
ensure that the EPC contractor will produce all engineering
deliverables expected by FERC, which will be included in the
owners’ request to commence commissioning. An initial
framework should be developed, recognising that, depending on
the size of the project and the overall timeframe, commissioning
requests may be months or years away and, during that
timeframe, the overall construction schedule may change. As the
commissioning period approaches, a good IP teamwill have
already established a strong relationship with federal, state, and
local inspectors. FERC staff will start to plan construction
inspections more frequently around commissioning schedules
and will work with the IP team (as practical) to ensure that
schedules are maintained.
Once commissioning is complete along with all required
performance and acceptance testing, the final milestone for
formal FERC approval is placing the project into service.
Hopefully, at this time, the project can look back and recognise
that the up-front effort expended in implementation planning
resulted in significant mitigation of the cost and schedule risks
that many projects face during the execution phase.
Figure 3.
In-service LNG facility. Image courtesy of
EcoElectrica L.P.
