36
LNG
INDUSTRY
SEPTEMBER
2016
Pipe and tray/conduit routing.
Electrical one line diagrams for power distribution.
Control system architecture.
Figures 4 and 5 indicate the plot plan and a 3Dmodel
for an LNG bunkering facility.
Detailed design activities in FEP-3 include the following:
Develop target price proposal
The selected TEPC teamwill build on the work done in FEP-2
and develop construction-ready drawings and specifications
for the facility. This includes finalised updates on all of the
FEP-2 deliverables, as well as detailed structural, piping,
and electrical and instrumentation drawings. With these
documents and equipment bids, the TEPC teamwill update
the procurement and construction estimate to obtain a
target EPC price for the facility. This target price is the basis
for the contract to construct the facility.
Secure project permits
Concurrent with the detail design, the developer should
begin review of the federal, state and local requirements
for the facility and the permits required. Depending upon
the location and use, some facilities may be under the
jurisdiction of the Federal Energy Regulatory Commission
(FERC), US Maritime Administration (MARAD)/US Coast
Guard (USCG), or the Pipeline and Hazardous Materials
Safety Administration (PHMSA). The permitting process
normally requires submission of the design documents
prepared during FEP-2.
Negotiate feedstock and utility contracts
Using the process calculations performed in FEP-2 and
refined in FEP-3, the developer will negotiate purchase
contracts with suppliers of the incoming natural gas
feedstock and for suppliers of other utilities, such as
electrical power, potable water, and wastewater treatment.
Secure offtake agreements
Sales contracts will also need to be developed and secured
by the developer for the LNG output of the facility. These
contracts will finalise the quantities and timing discussed
with potential customers during the earlier FEP-0 phase.
At the end of FEP-3, the developer has a near firm price
within 10% of the cost estimate of the facility. The final
phase is the complete EPC of the facility.
Figure 5.
3D model: LNG bunkering facility.
EPC execution
With the FEP-3 designs completed and a target price negotiated,
the formal project execution can begin, with the TEPC team
procuring the required process, electrical and control equipment
and fabricating piping systems and structural steel.
Certain projects are executed in the following two phases:
A limited notice to proceed (LNTP) phase with limited funds for
engineering and early procurement activities.
A final notice to proceed (FNTP) when funds are fully
committed to the project.
Once the FNTP and permits have been obtained, the TEPC can
begin site construction, including the following:
Site work, grading and drainage.
Foundations for buildings, equipment and piping supports.
Building and structural steel installation.
Storage.
Piping systems installation.
Tray, conduit and wiring installation.
Facility checkout and testing.
Finally, the TEPC teamwill start-up and commission the facility.
When all systems are operational and working as planned, the
TEPC teamwill conduct performance testing to verify that all
process goals have been met. Typically, developer personnel that
will operate the facility are trained by the TEPC team during
performance testing and initial operation.
Commercial operation
When all contractual requirements have been met, the TEPC team
will turn the facility over to the developer for commercial operation.
The developer may contract with the TEPC team to provide
ongoing maintenance and operation support after the warranty
period has passed.
Summary
Regardless of whether a developer chooses a conventional or
alternative approach to contracting, using an FEP process to go
from concept to cooldown is essential to overall project success.
In instances where schedule is less important, employing a
conventional contracting approach in FEP can be both economic
and efficient. However, when speed to market is essential, the
alternate contracting approach to FEP provides streamlined
benefits without compromising planning and scope definition.
References
1. DAMNJANOVIC, I., et. al., ‘A Standardized Approach to
Identify and Define Owner Value Interests and Align the E&C
Response’, CII Research Report RR 266-11, (September 2011).
2. Construction Industry Institute Support for Pre-Project
Planning Research Team, ‘Front End Planning: Break the
Rules, Pay the Price’, CII Research Summary RS 213-1,
(November 2006).
3. The Benchmarking and Metrics Committee, Benchmarking
& Metrics Value of Best Practices Report, CII BMM 2003-4,
(February 2003).
4. Construction Industry Institute, ‘An Introduction to
the Construction Industry Institute’, CII Power Point,
(January 2009).
