project execution model

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Aker Kvaerner Common PEM

User Guide

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CONTENTS

Page

1.0 Introduction to the Project Execution Model Initiative 3

2.0 PEM Planning and Control Structure 7

• Strategic Level • Control Level

• Control Level Key Activities Project Tendering Project Execution Project Management • Execution Level

3.0 Project Organisation 14

4.0 Description of the PEM – Strategic Level PHASES 15 5.0 Description of the PEM – Control Level STAGES 17 6.0 PEM Glossary of Terms and Abbreviations 23

Appendix A Control Level Milestone Requirements – PROJECT TENDERING Appendix B Control Level Milestone Requirements – PROJECT EXECUTION Appendix C Control Level Milestone Requirements – PROJECT MANAGEMENT

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1.0 INTRODUCTION TO THE PROJECT EXECUTION MODEL INITIATIVE

Aker Kvaerner (AK) is a major contractor to the offshore and onshore industries, providing contract management, services, products and integrated solutions spanning the complete life cycle value chain across a wide variety of business sectors.

For the purpose of successful execution and delivery, and not least as a result of the last few decade’s demand for engineering, procurement and construction (EPC) deliveries coupled with the industry’s requirement for control of costs, delivery time and quality, Kvaerner developed and documented an approach to project execution. In addition the merger of Aker Maritime and Kvaerner has contributed to a further improvement of this execution methodology and forms the basis for the Project Execution Model initiative in Aker Kvaerner (AK).

This document is an introduction and summary of the AK approach for controlled execution of our projects. A model that is being rolled out across AK corporately for implementation by all business streams and their adaptation of the methodology to the requirements of the local contracting environment.

The Project Execution Model (PEM) is the most important business initiative within AK and forms the basis for standardising our project execution methodology across our diverse business. It will also enable more consistent and improved performance towards satisfying our customer’s expectations as well as envisaged sustainable business presence in the markets we are currently participating.

The foundation of the methodology is many years of experience with offshore and onshore industry projects from all over the world and not least the recent execution of several major EPC projects. A significant experience in this context is the knowledge of the actual project costs, how these are distributed and relate to the various activities over time and the processes influencing the end cost of the product.

The figure below illustrates typical costs experienced with major “Harsh Environment” projects. As seen, half of the cost lies with procurement, some 30-40% with construction and only some 10% with engineering. However, at the same time investigations show that the influence of engineering over the end cost of the product is 90%, whilst the similar influencing power for procurement, construction and installation is around 5%, 3% and 2% respectively.

From this it is evident that although the expenditures of costs are much larger in later phases, the possibility to influence the end (product) cost during the late phases is very limited.

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A similar picture emerges from the Construction Industry Institute’s gathering of information from 700 major projects in “North America”, where the ability to influence the end cost was plotted against time, identifying the period during concept & system definition, i.e. prior to committing to major purchases, as “the Critical Performance Period” during which end cost could be influenced significantly.

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The “Harsh Environment” and the “North America” figures give the same message – ‘it is the depth and quality of the project definition work during the early phases that decide success or failure.’ This is especially so for the cost aspect discussed here, but experience shows that other areas such as safety, project schedule and product quality very often follow a similar pattern.

The main lesson is therefore: Invest in the period prior to the heavy investment in the form of time & man-hours (i.e. in project definition) and harvest the benefits at the tail end of the project.

Translating this learning into practical application is a challenge AK has taken on when developing a systematic approach to the execution of projects. In this methodology AK has captured the need for giving focus to the early phases, in parallel with understanding the need for a continuous focus towards the end product as well as constantly ensuring that engineering is fit for construction, commissioning and operations. Further it should be noted that the methodology is equally adaptable to all project activities as the methodology outlines the path followed by most projects.

To take on the challenge of giving sufficient focus and attention to the early phases, coupled with the required focus towards the end product, including construction and operational requirements, AK has subdivided the project life cycle into 6 execution phases.

The objective of this project execution model (PEM) and the breakdown into these six phases is to improve quality, timely delivery and profitability, by

• Providing management attention to critical activities and emphasis vs. the end result and timely delivery, throughout the project duration. • Subdividing the project into phases controlled by milestones.

• Specify strict quality requirements for each milestone, which eliminates the transfer of work from one phase to the next

• Focus on inter-discipline dependencies to ensure quality in all parts of the project

• Optimise the transfer of information from one project participant to another

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• Specific attention to systems throughout the project life cycle

• When appropriate, dividing the product in part (sub) projects with clear objectives and scope of work definition.

• Organising multidiscipline teams, for the individual phases and Sub-projects respectively, accountable for budget adherence, timely delivery and quality.

• Empowerment of teams

• Standardisation and reuse of solutions, products and execution processes,

• Providing a sound basis for experience transfer.

AK PEM Introduction

9th April 03 Page 33

PEM im provem ent process

PEM Phase & Stage Descriptions

Im proved PEM

Descriptions Recom m endation

by B usiness A rea PEM Cham pion Approval by

AK PEM Netw ork/ Steering Com m ittee

Project 1 Project 2 Project 3

B usiness Area PEM Cham pion

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2.0 PEM PLANNING AND CONTROL STRUCTURE

The link between the different work processes on a project is ensured through the PEM. The PEM provides linkage between different disciplines and the different phases of the model and is broken down into three levels, Strategic, Control and Execution as indicated in the figure below.

Strategic Level

The highest level in the PEM is the phase arrow, which is termed the Strategic Level. Every project master schedule will reflect this level of the model.

Control Level

The next level in the model is termed the Control Level in which the Strategic Level Phases are further sub-divided into stages. There are mandatory milestones for each stage. Main interfaces to internal and external entities are also included in this level. The Control Level describes the sequence and completion level of multitasks through;

• The major stage milestones within each phase • Quality Levels and key deliverables for each stage

The Control Level is also reflected in the project schedule in the form of allocated milestone dates and gate reviews.

AK PEM Introduction

9th April 03 Page 13

Aker Kvaerner PEM

FEASIBILITY & CONCEPT SYSTEM DEFINITION DETAILING & FABRICATION TENDER & KICK-OFF SYSTEM COMPLETION ASSEMBLY/ ERECTION STRATEGIC EXECUTION CONTROL

Specific work processes, systems & procedures

Corporate Business Areas Projects Control level: Major Milestones Strategic level:

Execution level:SYSTEM DEFINITION PHASE - STAGE 3

Material Quantity SimulationLevel 3 Update MTO/ (Material Quantity Budget) Level 3 Call Off Specify remaining Special Items P&ID Level 3 UpdatePiping DatabaseLevel 3 RequisitionPiping & Valves Review issue P&ID Level 3 Technical input PO remaining Special Items Weight Control Vendor Info.Inline Instruments

Weight and COG PipingLevel 3

3.3 3.3 L10 3.3 L14 3.3 L16 3.3 L17 3.3 L11 3.3 L12 3.3 L15 Global Integration Model Review Level 3 Part ProductPhase Model Review Level 2

EquipmentModellingLevel 3 Piping Design Level 3Clash Check& Produce System Isometric (Relevant Systems) Piping & Layout Review P&IDLevel 3

Pipe SupportDesignLevel 3

Issue Stress ISO Stress Calculation NO YES Input to Structural To Stress ISO Report in Part ProductPhase Freeze Infoall Equipment >=1tonn

Operational &Maintenance Review Level 3 HSE VerificationLevel 3 3.3 L01 3.3 L02 3.3 L05 3.3 L06 3.3 L03 3.3 L04 3.3 L07 3.3 L13 Critical Line 3.2 Prepare Test Definition DetailedPiping FabricationMethod Planning Commissioning Limits (P&ID &Line List)

3.3 L08

3.3 L09

Overall Methodfor Installation/Pre-fab.

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Key Activities

Key activities are major work tasks carried out throughout the project lifecycle. The control level defines the quality requirement for each of the key activities (deliverables) for each PEM milestone. The key activities are presented in three ‘Modules’ Project Tendering; Project Execution and Project Management.

Project Tendering

Applying the PEM approach to the tendering process will deliver a well defined and clearly understood project scope.

The Tendering and Kick-Off phase has its own set of Key Activities covering both Project Execution and Project Management Activity. This reflects the smaller, multi-discipline teams which will normally be involved in the tendering process.

The stages and milestones within the Tender and Kick-Off Phase reflect the mandatory requirements of Group Policy 3.1 Tendering and Project Contract Risk. Progress through the Tender and Kick-Off Phase is controlled through Aker Kvaerner’s web based support tool the ‘Risk Dashboard’.

The control level Project Tendering Key Activities and milestone requirements are as displayed in the following ‘Champagne Diagram’:

F E A S IB IL IT Y & C O N C E P T S Y S T E M D E F IN IT IO N D E T A IL IN G & F A B R IC A T IO N T E N D E R & K IC K -O F F S Y S T E M C O M P L E T IO N A S S E M B L Y / E R E C T IO N

M ile sto n e s:

C O N C EPT C O M PLETE M 1D G LO B A L D ESIG N C O M PLETE M 2C M 3C PR EA SSEM B LIES R EA D Y FO R SH IPM EN T M 4C M EC H A N IC A L C O M PLETE M 5D C LIEN T TA K EO V ER SU B M IT TEN D ER K IC K -O FF C O M PLETE P h a s e a n d s ta g e tra n s fe r th ro u g h 攖o ll g a te s ? h a v in g s tric t re q u ire m e n ts w .r.t. q u a lity , s c h e d u le a n d c o s t

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Project Tendering

Control Level Milestone Requirements / Quality Levels

DM Risk Policy

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Project Execution

The control level Project Execution key activities quality requirements are displayed in the following ‘Champagne Diagram’

PROJECT EXECUTION

Control Level Milestone Requirements / Quality Levels

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Project Management Module

The Project Management Module comprises those project activities associated with organising, monitoring and controlling the delivery of the work scope.

Again, the Key Activities reflect multidiscipline activities to be delivered in a co-ordinated way in the correct sequence. Thus, the work of several disciplines / departments / work processes will be required to achieve the milestone requirements for any particular Key Activity.

The Project Management Control Level Key Activities and Milestone Requirements are displayed in the following ‘Champagne Diagram’.

PROJECT MANAGEMENT

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The project management will on a continuous basis follow up, review and check the activities of the project. To facilitate this process the appropriate tools and systems are available to report status, events and project future development, to evaluate deviations from original plan and to make and take decisions that need to be implemented.

Project Management… .

Interface Control Quality Decision Proj Schedules Budget/Cost Change Control Event/Risk Reports Econom y Progress

Tools for control and monitoring: Management evaluation of deviation and risk:

Managem ent Decision:

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Execution Level

The content of the Execution Level reflects the individual business and is thus not common.

The Execution Level is the third level in the PEM. The execution level encompasses multifunctional work processes with flow sheets as well as milestone activity descriptions, check lists and quality requirements. Activities are smaller work tasks and related deliverables that make up a key activity. The activity descriptions reside within the activity flowcharts and detail the input and output, checklist and procedural definition of the activity and tools required to perform it. The Execution Level is the basis for the development of the network in the project programme.

A typical structure for the execution level is indicated here:

AK PEM Introduction Stage Objectives Concept Execution DETAILING& FABRICATION SYSTEM COMPLETION FEASIBILITY & CONCEPT SYSTEM DEFINITION ASSEMBLY/ ERECTION

Key Activities Phases

M1BM1CM1D M2CM3AM3BM3C M4C M5D M1A M2A QL1 QL1 QL2 QL1 QL1 QL3 QL1QL2 M2B QL2 QL2 QL1QL2 QL1 QL2 QL2 QL3 QL3 QL3 QL2QL3QL4 QL3 QL7 QL4 QL7 QL6 QL4 QL6 QL4Q5 QL1QL2QL3QL4 Procurement 1st priority Equipment 2nd priority Equipment 3rd priority Equipment Bulk Material/MTO System Engineering

P&ID,Line List & MEL EIT Databases& registers

HSE in Design

Layout and 3D Model Fabrication/Construction Completion Sub Contracting 1st priority subcontracts 2nd priority subcontracts QL4 QL5 M4AM4BM5AM5BM5C QL5 QL5 QL1 QL1QL2 QL2QL3QL3QL4 QL4 QL5 QL2 QL3QL3 QL5 QL5 QL4 QL1QL2QL3 QL6 QL7 QL5 QL5QL6 QL5 QL5 QL6 QL5 QL1 QL5 QL5 QL4 QL4 QL4 Key Activities Action List Gate Review Report Control Level Execution Level Process Structural HVAC Architectual Instrument Mechanical Civil Electrical Piping Activity Descriptions Flow Charts

Control Object checklists

Existing Procedures or “Discipline knowledge base” or Governing documentation Work Processes

Quality Level descriptions

Milestone Requirements Key Activity M ile st one Discipline Gate Review Summary Reports D i s c i p l i n e Ga t e R e v i e w S u mma r y R e p o r t S t a g e Mi l e s t o n e :P r o j e c t N a me :P r o j e c t N o . :D i s c i p l i n e :C l i e n t : P r e p a r e d b y ( L e a d . e n g . ) R e v i e we d b y ( D e p t . M g r . ) N o .1I s t h e s t a t u s o f a l l a c t i v i t ie s / c o n t r o l o b je c t s c o m p l ia n t w i t h t h e d i s c i p l i n e s t a g e o b je c t i v e s ?S u b j e c t C o mp l i a n c e 2A r e a l l d e v i a t i o n s / h o l d s s u m m a r i z e d a n d r is k s in d i c a t e d i n t h e a t t a c h e d " s u m ma r y o f d e v i a t i o n s , h o l d s a n d r i s k s " ? 3A r e t h e i n p u t s r e c e i v e d o f t h e c o r r e c t s t a t u s a n d u s e d f o r t h e a c t iv it y a s p e r a p p l i c a b le f l o w c h a r t 4A r e " H o l d s " , a s a p p l i c a b l e , in d i c a t e d o n t h e i s s u e d / r e l e a s e d d o c u me n t s ? 5A l l a p p l i c a b l e a c t iv i t y c h e c k li s t s c o m p l e t e d a n d d e v i a t io n s / h o l d s l i s t e d ? 6H a v e i n d e p e n d e n t s p o t - c h e c k s b e e n e x e c u t e d o n t h e A c t i v i t y c h e c k l i s t s ? 7V a l i d a t i o n a n d c h e c k i n g p r o c e d u r e ( C P 2 2 1 . 0 0 4 ( Z o e t e r me e r ) C P 3 1 2 8 ( S o le n t ) + E N G 0 0 5 , E N G 0 0 6 , E N G 0 0 7 , E n g 0 1 2 ( S t o c k t o n ) ) i m p l e m e n t e d : - C h e c k p r i n t s - A p p r o v a l s o f i s s u e d d o c u m e n t s ( s i g n e d o f f ) - I n t e r d i s c i p l i n e r e v i e w ( K e y D o c u m e n t R e v i e w s , in t e r s q u a d s , e t c ) - I mp l e me n t a t i o n o f c l i e n t c o m m e n t s 8A n y c r i t ic a l d e la y s o f t h e a c t u a l w o r k c o m p a r e d t o t h e l e v e l 3 / 4 s c h e d u l e s ? 9D i s c i p l i n e g a t e r e v ie w c h e c k l i s t c o m p l e t e d a s a p p l ic a b l e ? 1 0A n y k e y le a r n i n g t h a t n e e d s t o b e c o mmu n i c a t e d w i t h i n E & C ( e . g . v i a P r o je c t s , L e s s o n s L e a r n e d s y s t e m s , P r o c e d u r e s e t c . ) ? D i s t r i b u t i o n : P r o j e c t ma n a g e r L e a d e n g in e e r D is c i p l i n e ma n a g e r P E M G a t e R e v ie w t e a m Q A ma n a g e r A t t a c h me n t s : S u m m a r y o f D i s c i p li n e G a t e R e v ie w C h e c k L i s t , d e v i a t io n s , h o l d s a n d r i s k s T h e t e c h n i c a l s p e c i a l i s t / d e p a r t m e n t m a n a g e r i s r e s p o n s i b l e t o c h e c k t h e s u b j e c t s b e l o w a n d c o m p l e t e t h e f o r m , t o b e c o m p l e t e d a n d i s s u e d m i n 3 w o r k i n g d a y s b e f o r e g a t e r e v i e w D i s c i p l i n e G a t e R e v i e w S u mma r y R e p o r t R e v i e w e d b y ( D e p t . M g r . )P r e p a r e d b y ( L e a d . e n g . )S t a g e Mi l e s t o n e :P r o j e c t N a me :P r o j e c t N o . :D i s c i p l i n e :C l i e n t : N o .1I s t h e s t a t u s o f a l l a c t i v i t i e s / c o n t r o l o b j e c t s c o mp l i a n t wi t h t h e d i s c i p l i n e s t a g e o b j e c t i v e s ?S u b j e c t C o mp l i a n c e

2Ar e a l l d e v i a t i o n s / h o l d s s u mma r i z e d a n d r i s k s i n d i c a t e d i n t h e a t t a c h e d " s u mma r y o f d e v i a t i o n s , h o l d s a n d r i s k s " ? 3Ar e t h e i n p u t s r e c e i v e d o f t h e c o r r e c t s t a t u s a n d u s e d f o r t h e a c t i v i t y a s p e r a p p l i c a b l e f l o w c h a r t 4Ar e " H o l d s " , a s a p p l i c a b l e , i n d i c a t e d o n t h e i s s u e d / r e l e a s e d d o c u me n t s ? 5Al l a p p l i c a b l e a c t i v i t y c h e c k l i s t s c o mp l e t e d a n d d e v i a t i o n s / h o l d s l i s t e d ? 6Ha v e i n d e p e n d e n t s p o t - c h e c k s b e e n e x e c u t e d o n t h e A c t i v i t y c h e c k l i s t s ? 7Va l i d a t i o n a n d c h e c k i n g p r o c e d u r e ( CP 2 2 1 . 0 0 4 ( Z o e t e r me e r ) CP 3 1 2 8 ( So l e n t ) + E NG 0 0 5 , E NG 0 0 6 , E NG 0 0 7 , E n g 0 1 2 ( S t o c k t o n ) ) i mp l e me n t e d : - Ch e c k p r i n t s - A p p r o v a l s o f i s s u e d d o c u me n t s ( s i g n e d o f f ) - I n t e r d i s c i p l i n e r e v i e w ( K e y Do c u me n t Re v i e w s , i n t e r s q u a d s , e t c ) - I mp l e me n t a t i o n o f c l i e n t c o mme n t s 8An y c r i t i c a l d e l a y s o f t h e a c t u a l wo r k c o mp a r e d t o t h e l e v e l 3 / 4 s c h e d u l e s ? 9Di s c i p l i n e g a t e r e v i e w c h e c k l i s t c o mp l e t e d a s a p p l i c a b l e ? 1 0An y k e y l e a r n i n g t h a t n e e d s t o b e c o mmu n i c a t e d wi t h i n E & C ( e . g . v i a Pr o j e c t s , L e s s o n s L e a r n e d s y s t e ms , Pr o c e d u r e s e t c . ) ?

D i s t r i b u t i o n : P r o j e c t ma n a g e r L e a d e n g i n e e r Di s c i p l i n e ma n a g e r P EM Ga t e Re v i e w t e a m QA ma n a g e r A t t a c h me n t s : S u mma r y o f Di s c i p l i n e Ga t e Re v i e w Ch e c k L i s t , d e v i a t i o n s , h o l d s a n d r i s k s T h e t e c h n i c a l s p e c i a l i s t / d e p a r t m e n t m a n a g e r i s r e s p o n s i b l e t o c h e c k t h e s u b j e c t s b e l o w a n d c o m p l e t e t h e f o r m , t o b e c o m p l e t e d a n d i s s u e d m i n 3 w o r k i n g d a y s b e f o r e g a t e r e v i e w D i s c i p l i n e G a t e R e v i e w S u m m a r y R e p o r t R e v i e w e d b y ( D e p t . M g r . )P r e p a r e d b y ( L e a d . e n g . )S t a g e Mi l e s t o n e :P r o j e c t N a m e :P r o j e c t N o . :D i s c i p l i n e :C l i e n t : N o .1I s t h e s t a t u s o f a l l a c t i v i t ie s / c o n t r o l o b j e c t s c o m p l ia n t w i t h t h e d i s c i p l i n e s t a g e o b je c t i v e s ?S u b j e c t C o m p l i a n c e 2A r e a l l d e v i a t i o n s / h o l d s s u m m a r i z e d a n d r is k s in d i c a t e d i n t h e a t t a c h e d " s u m ma r y o f d e v i a t i o n s , h o ld s a n d r i s k s " ? 3A r e t h e i n p u t s r e c e iv e d o f t h e c o r r e c t s t a t u s a n d u s e d f o r t h e a c t iv it y a s p e r a p p l ic a b le f l o w c h a r t 4A r e " H o l d s " , a s a p p l i c a b l e , i n d i c a t e d o n t h e i s s u e d / r e l e a s e d d o c u m e n t s ? 5A ll a p p l i c a b l e a c t iv i t y c h e c k li s t s c o mp l e t e d a n d d e v i a t i o n s / h o l d s l i s t e d ? 6H a v e i n d e p e n d e n t s p o t - c h e c k s b e e n e x e c u t e d o n t h e A c t i v i t y c h e c k l is t s ? 7V a l i d a t i o n a n d c h e c k i n g p r o c e d u r e ( C P 2 2 1 . 0 0 4 ( Z o e t e r me e r ) C P 3 1 2 8 ( S o le n t ) + E N G 0 0 5 , E N G 0 0 6 , E N G 0 0 7 , E n g 0 1 2 ( S t o c k t o n ) ) i m p l e m e n t e d : - C h e c k p r i n t s - A p p r o v a l s o f i s s u e d d o c u me n t s ( s i g n e d o f f ) - I n t e r d i s c i p l i n e r e v i e w ( K e y D o c u me n t R e v i e w s , in t e r s q u a d s , e t c ) - I mp le m e n t a t i o n o f c l i e n t c o mm e n t s 8A n y c r i t ic a l d e la y s o f t h e a c t u a l w o r k c o m p a r e d t o t h e l e v e l 3 / 4 s c h e d u l e s ? 9D i s c i p l i n e g a t e r e v ie w c h e c k l i s t c o m p l e t e d a s a p p l i c a b l e ? 1 0A n y k e y l e a r n i n g t h a t n e e d s t o b e c o m mu n i c a t e d w i t h i n E & C ( e . g . v i a P r o je c t s , L e s s o n s L e a r n e d s y s t e ms , P r o c e d u r e s e t c . ) ? D i s t r i b u t i o n : P r o j e c t ma n a g e r L e a d e n g in e e r D i s c i p l i n e ma n a g e r P E M G a t e R e v ie w t e a m Q A ma n a g e r A t t a c h m e n t s : S u m m a r y o f D is c i p li n e G a t e R e v ie w C h e c k L i s t , d e v i a t io n s , h o l d s a n d r i s k s T h e t e c h n i c a l s p e c i a l i s t / d e p a r t m e n t m a n a g e r i s r e s p o n s i b l e t o c h e c k t h e s u b j e c t s b e l o w a n d c o m p l e t e t h e f o r m , t o b e c o m p l e t e d a n d i s s u e d m i n 3 w o r k i n g d a y s b e f o r e g a t e r e v i e w D i s c i p l i n e G a t e R e v i e w S u m m a r y R e p o r t R e v i e we d b y ( D e p t . M g r . )P r e p a r e d b y ( L e a d . e n g . )S t a g e Mi l e s t o n e :P r o j e c t N a m e :P r o j e c t N o . :D i s c i p l i n e :C l i e n t : N o . S u b j e c t C o m p l i a n c e 1I s t h e s t a t u s o f a l l a c t i v i t i e s / c o n t r o l o b j e c t s c o mp l i a n t wi t h t h e d i s c i p l i n e s t a g e o b j e c t i v e s ? 2Ar e a l l d e v i a t i o n s / h o l d s s u mma r i z e d a n d r i s k s i n d i c a t e d i n t h e a t t a c h e d " s u mma r y o f d e v i a t i o n s , h o l d s a n d r i s k s " ? 3Ar e t h e i n p u t s r e c e i v e d o f t h e c o r r e c t s t a t u s a n d u s e d f o r t h e a c t i v i t y a s p e r a p p l i c a b l e f l o w c h a r t 4Ar e " H o l d s " , a s a p p l i c a b l e , i n d i c a t e d o n t h e i s s u e d / r e l e a s e d d o c u me n t s ? 5Al l a p p l i c a b l e a c t i v i t y c h e c k l i s t s c o mp l e t e d a n d d e v i a t i o n s / h o l d s l i s t e d ? 6Ha v e i n d e p e n d e n t s p o t - c h e c k s b e e n e x e c u t e d o n t h e A c t i v i t y c h e c k l i s t s ? 7Va l i d a t i o n a n d c h e c k i n g p r o c e d u r e ( CP 2 2 1 . 0 0 4 ( Z o e t e r me e r ) CP 3 1 2 8 ( So l e n t ) + E NG 0 0 5 , E NG 0 0 6 , E NG 0 0 7 , E n g 0 1 2 ( S t o c k t o n ) ) i mp l e me n t e d : - Ch e c k p r i n t s - A p p r o v a l s o f i s s u e d d o c u me n t s ( s i g n e d o f f ) - I n t e r d i s c i p l i n e r e v i e w ( K e y Do c u me n t Re v i e w s , i n t e r s q u a d s , e t c ) - I mp l e me n t a t i o n o f c l i e n t c o mme n t s 8An y c r i t i c a l d e l a y s o f t h e a c t u a l wo r k c o mp a r e d t o t h e l e v e l 3 / 4 s c h e d u l e s ? 9Di s c i p l i n e g a t e r e v i e w c h e c k l i s t c o mp l e t e d a s a p p l i c a b l e ? 1 0An y k e y l e a r n i n g t h a t n e e d s t o b e c o mmu n i c a t e d wi t h i n E & C ( e . g . v i a Pr o j e c t s , L e s s o n s L e a r n e d s y s t e ms , Pr o c e d u r e s e t c . ) ?

D i s t r i b u t i o n : P r o j e c t ma n a g e r L e a d e n g i n e e r Di s c i p l i n e ma n a g e r P EM Ga t e Re v i e w t e a m QA ma n a g e r A t t a c h me n t s : S u mma r y o f Di s c i p l i n e Ga t e Re v i e w Ch e c k L i s t , d e v i a t i o n s , h o l d s a n d r i s k s T h e t e c h n i c a l s p e c i a l i s t / d e p a r t m e n t m a n a g e r i s r e s p o n s i b l e t o c h e c k t h e s u b j e c t s b e l o w a n d c o m p l e t e t h e f o r m , t o b e c o m p l e t e d a n d i s s u e d mi n 3 w o r k i n g d a y s b e f o r e g a t e r e v i e w

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3.0 PROJECT ORGANISATION

The PEM is a product, sequence and phase-oriented model. Hence the tasks to be performed vary throughout the execution, responding to the requirements of the respective phases. This implies that the project organisation must be dynamic and be adjusted to suit the requirements within each phase.

The project management functions covered by the management team and key management personnel remain intact throughout all project phases in order to provide continuity and keep full focus on the final product. However, the teams physical composition, location, organisational structure and emphasis will reflect the phase, scope of supply, business strategies and associated challenges.

The project organisation will complete work meeting respective PEM milestone and quality requirements before or at the end of each PEM stage. Further the organisational structure and composition will again reflect the scope of work to be performed, the phase in question as well as the overall business strategies in place.

The project management will on a continuous basis follow up, review and check the activities of the project. To facilitate this process the appropriate tools and systems are available to report status, events and project future development, to evaluate deviations from original plan and to make and take decisions that need to be implemented.

One of the important elements of project management & control which PEM brings is the requirement to identify where the PEM milestones will occur on the project and to check & verify progress at these milestones prior to

proceeding further. This check & verification process is referred to as a ‘PEM Gate Review’. Projects are required to establish at the outset a ‘PEM

Strategy’ which will set out when & how Gate Reviews will be organised. Consideration will be given to the significance of individual milestones to determine an appropriate level of scrutiny and who should conduct the review. The capabilities of the project organisation are very important for the successful outcome of the project execution. The attitudes and cultural elements are therefore given high visibility in the training of AK personnel and during project execution. Integral to the AK approach is to:

• Focus on the totality (end product) rather than sub-optimisation • Be solution oriented

• Be proactive rather than reactive

• Keep a hands on attitude, at the same time as ensuring that tasks and decisions are performed on the most appropriate level

• Focus on actions required to solve and overcome challenges • Solve problems now rather than wait until it may be too late

• Be accountable through delegation of complete tasks and accompanying authority

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SECTION 4.0

DESCRIPTION OF THE PEM STRATEGIC LEVEL PHASES

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PEM STRATEGIC LEVEL

The top level – ‘Strategic’ – is divided into several phases. The phases in the strategic level represent how a general project progresses from start towards the end result. There are 5 sequential phases as follows:

• Phase 1 – Feasibility and Concept. • Phase 2 – System Definition.

• Phase 3 – Detailing and Fabrication. • Phase 4 – Assembly/Erection. • Phase 5 – System Completion.

Aker Kvaerner may be involved in some or all of these phases dependent on the individual project.

In addition there is the Tender and Kick-Off Phase. This phase is mandatory for all projects, irrespective of which sequential phase (1-5) the actual project execution starts from.

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SECTION 5.0

DESCRIPTION OF THE PEM CONTROL LEVEL STAGES

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PEM Control Level - Tender & Kick-Off

Description

Pre-qualify for all targeted projects and thereafter prepare a winning tender with an acceptable risk exposure and profit potential. Provide firm schedules, technical and commercial basis for start up of the project in accordance with established Aker Kvaerner methods and procedures.

Evaluate, decide and obtain approval to bid. Pending a positive decision to bid, prepare tender documentation and get the required approvals. Review and identify design basis maturity vs Aker Kvaerner Project Execution Model (AKPEM) and shape scope accordingly. Submit tender to the client. Negotiate and sign contract for the work tendered. Hand-over to the project execution team, including:

start up and mobilisation plans

project execution strategy and organisation descriptions project financing plans

project risk assessment

project baseline schedules and budgets

The phase includes Kick-Off of the project based on administrative and technical start-up packages.

Complete design basis to the nearest milestone of the Aker Kvaerner Project Execution Model (AKPEM). From this milestone onwards the project follows the standard phases of the AKPEM.

Key Stage Objectives

Receipt of (ITT) Invitation to Tender

• Concept/Feed/Design • Maturity Check

Project Management

• ITT review • Tender cost, schedule

and budget • Update KT Analysis • Check Winning strategy

& cost vs Client objectives/ budget • Initial project execution

strategy • Update risk register • Nominate Tender Team • Bid/No Bid

• Verify/Develop Scope of Work for Project Execution

• Mobilise tender team & Kick-off

• Tender Execution Strategy, budget and plan • Project Execution Strategy

&t Schedule • HSE program • Estimating/Weight & Cost • Define Org. / Nominate Key

Project Personnel • Pricing/Compensation

strategy & Formats • Tender clarific./ qualific’s • Risk Analysis • Draft Tender

• SOW Verified and Project Execution approved

• Tender Document Review & Management Approvals • Project Execution Strategy,

Organisation & Project Team • Cost estimate & Cash flow • Schedule / Manpower

Projection Plan

• Contract: Terms & Conditions • Sub-Contracts: Terms &

Conditions

• Negotiation Mandate and Team • Risk Management • Risk Register • Contingency determination • Price/compensation formats • Group Risk Committee review

(if required by policy)

ASSESS

TENDER

PHASE START _{SUBMIT TENDER}

Stage TA

PREPARE

Stage TB

MTA MTB

TENDER & KICK OFF

Tender phase

Stage TD

NEGOTIATE

Project Execution • Bid Clarifications Project Management • Negotiations • Bid clarifications • Update: - Key data - Price - Contingency - Risk Analysis - Execution Plan • Management approval • Contract ready for

signature • Prepare Hand-over to Project Team SIGN CONTRACT MTE APPROVE Stage TC Stage TE KICK-OFF MTD MTC KICK-OFF COMPLETE

• Tender Team Hand-over • Scope of Work Start-up Plan • Design Basis Alignment

• Mobilise Project team • Tender Team Hand-over • Client Kick-off Meeting(s) • Project Start-up Plan (Mgmt) • Internal Kick-off meetings • Teambuilding

DRAFT TENDER BID / NO BID

POSITIONING

• Business Development • Prospect ID & Screening • Perform KT Analysis • Check Core Capability &

Strategy Profile (CCSP) • Client Contact/Objectives • Winning Strategy • Partners & Scope • Identify Tender

Accountable • Prequalification

Receipt of (ITT) Invitation to Tender

• Concept/Feed/Design • Maturity Check

• ITT review • Tender cost, schedule

and budget • Update KT Analysis • Check Winning strategy

& cost vs Client objectives/ budget • Initial project execution

strategy • Update risk register • Nominate Tender Team • Bid/No Bid

• Verify/Develop Scope of Work for Project Execution

• Mobilise tender team & Kick-off

• Tender Execution Strategy, budget and plan • Project Execution Strategy

&t Schedule • HSE program • Estimating/Weight & Cost • Define Org. / Nominate Key

Project Personnel • Pricing/Compensation

strategy & Formats • Tender clarific./ qualific’s • Risk Analysis • Draft Tender

• SOW Verified and Project Execution approved

• Tender Document Review & Management Approvals • Project Execution Strategy,

Organisation & Project Team • Cost estimate & Cash flow • Schedule / Manpower

Projection Plan

• Contract: Terms & Conditions • Sub-Contracts: Terms &

Conditions

• Negotiation Mandate and Team • Risk Management • Risk Register • Contingency determination • Price/compensation formats • Group Risk Committee review

(if required by policy)

ASSESS

TENDER

PHASE START _{SUBMIT TENDER}

Stage TA

PREPARE

Stage TB

MTA

MTA MTBMTB

TENDER & KICK OFF

Tender phase

Stage TD

NEGOTIATE

Project Execution • Bid Clarifications Project Management • Negotiations • Bid clarifications • Update: - Key data - Price - Contingency - Risk Analysis - Execution Plan • Management approval • Contract ready for

signature • Prepare Hand-over to Project Team SIGN CONTRACT MTE MTE APPROVE Stage TC Stage TE KICK-OFF MTD MTD MTC MTC KICK-OFF COMPLETE

• Tender Team Hand-over • Scope of Work Start-up Plan • Design Basis Alignment

• Mobilise Project team • Tender Team Hand-over • Client Kick-off Meeting(s) • Project Start-up Plan (Mgmt) • Internal Kick-off meetings • Teambuilding

DRAFT TENDER BID / NO BID

POSITIONING

• Business Development • Prospect ID & Screening • Perform KT Analysis • Check Core Capability &

Strategy Profile (CCSP) • Client Contact/Objectives • Winning Strategy • Partners & Scope • Identify Tender

Accountable • Prequalification

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PEM Control Level - Feasibility & Concept

Description - Phase 1

Develop the best possible business case and winning solution for the client. The phase is also referred to as the “value-engineering” phase. The concept to be used is selected in this phase and thereby the project CAPEX

and OPEX levels are defined (+/- 50 to 20 %), which then can be compared to the product income levels.

Scope:

Selection of an optimal concept solution based on frozen and proven functional requirements, leading up an agreed and firm design basis

Perform technical/economic optimisation of the selected concept to achieve a best for purpose technology, price and delivery time

Identify a project execution strategy & plan based on the common AKPEM including a strategy for procurement & subcontracts

Establish a cost budget and ensure a manageable execution risk for all parties

Key Stage Objectives

OPPORTUNITY APPRAISAL

• Define HSE Requirements • Identify product, markets • Establish possible process solutions • Identify infrastructure requirements • Identify environmental requirements • Identify key process/ product

interfaces

• Evaluate business opportunity • Establish first cost estimate

FEASIBLE CONCEPTS SELECTED Stage 1A FEASIBILITY STUDIES Stage 1B ALTERNATIVES GENERATED M1A M1B Phase 1

• Define HSE goals

• Perform preliminary simulation & flow diagrams

• Size Key equipment • Layout block model and unit

arrangements

• Define preliminary construction methods

• Identify major completion aspects affecting the concept selection

• Establish general execution philosophy

• Define screening criteria • Update cost estimate • Rank alternatives • Perform Risk assessment

CONCEPT SELECTION

• Perform HSE studies to verify the concepts and Environmental Impact assessment for permitting • Consolidate the final design basis. • Optimize Process/System simulation

and flow diagrams

• Size remaining equipment and add to equipment list

• Optimize overall layout including safety assessment

• Update Constr. and Compl. methods • Evaluate Local requirements • Define Site enabling preparation criteria

• Develop overall execution schedule • Establish preliminary Project Execution

Strategy • Update cost estimate

• Determine Sourcing categories and scenarios

• Update Risk assessment, concepts

Stage 1C

CONCEPT DEFINITION

Stage 1D

• Update HSE Studies and analyses and prepare Environmental impact report • Freeze functional requirements, design basis,

overall system description and layout • Update Equipment list, flow diagrams • Prepare electrical Single Line Diagram

Prepare preliminary P&IDs • Inquire 1st priority equipment POs • Finalize Overall Layout and unit arrangement • Update Construction and Completion methods • Site enabling subcontract package complete &

awarded

• Define Local requirements

• Pre-qualify Main Sub-Contractors • Finalise Project Execution Strategy • Establish cost estimate • Update Risk assessment

• Prepare preliminary detailed project schedule

CONCEPT SELECTED M1C CONCEPT COMPLETE M1D

FEASIBILITY & CONCEPT

OPPORTUNITY APPRAISAL

• Define HSE Requirements • Identify product, markets • Establish possible process solutions • Identify infrastructure requirements • Identify environmental requirements • Identify key process/ product

interfaces

• Evaluate business opportunity • Establish first cost estimate

FEASIBLE CONCEPTS SELECTED Stage 1A FEASIBILITY STUDIES Stage 1B ALTERNATIVES GENERATED M1A M1A M1BM1B Phase 1

• Define HSE goals

• Perform preliminary simulation & flow diagrams

• Size Key equipment • Layout block model and unit

arrangements

• Define preliminary construction methods

• Identify major completion aspects affecting the concept selection

• Establish general execution philosophy

• Define screening criteria • Update cost estimate • Rank alternatives • Perform Risk assessment

CONCEPT SELECTION

• Perform HSE studies to verify the concepts and Environmental Impact assessment for permitting • Consolidate the final design basis. • Optimize Process/System simulation

and flow diagrams

• Size remaining equipment and add to equipment list

• Optimize overall layout including safety assessment

• Update Constr. and Compl. methods • Evaluate Local requirements • Define Site enabling preparation criteria

• Develop overall execution schedule • Establish preliminary Project Execution

Strategy • Update cost estimate

• Determine Sourcing categories and scenarios

• Update Risk assessment, concepts

Stage 1C

CONCEPT DEFINITION

Stage 1D

• Update HSE Studies and analyses and prepare Environmental impact report • Freeze functional requirements, design basis,

overall system description and layout • Update Equipment list, flow diagrams • Prepare electrical Single Line Diagram

Prepare preliminary P&IDs • Inquire 1st priority equipment POs • Finalize Overall Layout and unit arrangement • Update Construction and Completion methods • Site enabling subcontract package complete &

awarded

• Define Local requirements

• Pre-qualify Main Sub-Contractors • Finalise Project Execution Strategy • Establish cost estimate • Update Risk assessment

• Prepare preliminary detailed project schedule

CONCEPT SELECTED M1C M1C CONCEPT COMPLETE M1D M1D

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PEM Control Level - System Definition

Description - Phase 2

The main objective of the System Definition Phase is to detail the concept and freeze system design, implement vendor information and complete the area design to a level where the interfaces between the systems and various areas are frozen. Procurement activities including order placement and vendor follow-up performed according to technical input and project requirements to enable freezing the design. All external interfaces with design impact shall have been included in the design and confirmed frozen by the other party. Subsequently, by end of this phase, the layout is frozen and "clash free”, final detail engineering can proceed independently for the respective areas and fabrication and assembly/erection documentation can be prepared.

System design with focus on operability and maintainability with all safety aspects analysed and mitigating measures incorporated in the design shall have been performed . Working environment analyses, reviews and inspections to achieve arrangements for a safe and worker friendly environment done. Equipment and bulk materials sufficient to meet engineering supplier information and site need requirements procured. All requirements for subcontracting, manufacturing or temporary facilities shall have been included. Establish Methods for fabrication, assembly/erection and completion established and method requirements implemented in the design. Boundaries established and frozen and management of interfaces towards subcontractors and other contractors identified. Weight and cost budgets verified and likewise for contract milestones and detailed construction schedules.

Key Stage Objectives

M1D Milestone M2A

Critical POs Awarded

Milestone M2B Layout and Main Structure Frozen

Milestone M2C Global Design Complete

Phase 2: System Definition

Stage 2A:

SYSTEM DEFINITION

Stage 2B:

SYSTEM DESIGN & LAYOUT DEVELOPMENT

Stage 2C:

GLOBAL DESIGN

Work Scope

HSE and safety risk assessment, preliminary First vendor information for 1 Priority PO’s implemented in System Engineering

P&ID’s, Line List , MEL , EIT registers/databases and 3D model

Procurement

1st priority Equipment PO’s awarded

Subcontracting plan & strategy complete Fabrication/Construction methods and draft plan Completion established and draft preparations

Work Scope

HSE and safety risk assessment checked

First vendor information for 2nd Priority PO’s

implemented in System Engineering

P&IDs , MEL, EIT registers/databases and 3D model

Procurement; 2nd and 3rd priority equipment PO’s awarded, First bulk material orders out

Subcontracting; 1st priority subcontract issued, 2nd priority subcontracts draft

Work Scope

HSE and safety risk assessment frozen

Frozen vendor information for all PO’s implemented in System Engineering

P&ID’s, Line List, MEL, EIT registers/databases and 3D model

Procurement; All equipment PO’s awarded, all bulk materials orders placed Layout and 3D model are Clash free, Ready to outfitting details, All major interfaces frozen

Subcontracting; 1st priority subcontracts awarded, 2nd priority subcontracts issued

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Subcontracting; 1st priority subcontracts awarded, 2nd priority subcontracts issued Completion preparation substantially complete

Project Management

Prepare and verify project schedule and cost estimate QA plan established

Quantity and weight baseline & trending program

Prepare Detailed Deliverable Schedule and update current cost estimate

HSE program for engineering and procurement in place

Verify Contract Milestones and Detailed Construction Schedule and update current cost estimate

HSE program for construction in place

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PEM Control Level - Detailing & Fabrication

Description - Phase 3

The main objective of this phase is to complete detail design, prepare fabrication and construction documentation and fabricate and finalise part assemblies and modules Mechanical Complete.

Finalise detail design with all vendor information implemented and material take off done. Perform and issue work preparation documentation. Perform fabrication activities according to established methods. Mechanical complete product(s) ready for assembly/erection, including equipment packages. Verify the detailed schedules for the assembly/erection phase and ensure that all relevant site activities are documented MC complete.

Key Stage Objectives

• Engineering databases complete • All fabrication Bulk Material delivered • Shop engineering detailing and work preparation for fabrication

• Pipe spools, Steel sections and Concrete sections prefabricated.

• Deep/major foundations & trenches completed.

• Construction site temporary facilities completed

• Hook-up/Commissioning Subcontracts awarded

• Update cost, schedule & risk program

• Layout and 3D Model as build mark up of part assemblies/modules

• All Bulk Material available to support the Assembly / Erection sequence

• Part assemblies and modules/package units fabricated and mechanically complete • Commissioning commenced on selected

systems

• Update cost, schedule & risk program DETAIL DESIGN &

SUBCONTRACTING

• HSE risk assessment complete • Close out HAZOP action items • Final vendor information from all PO’s incorporated in System Engineering and layout / 3D model

• System Engineering & Layout / 3D model documentation issued for construction • Material take off finalised and bulk material top up orders placed

• 2nd priority FC Subcontracts awarded • Hook-up/Commissioning Subcontracts inquired

• Completion requirement incorporated in fabrication documentation

• Issue P& IDs IFC • Issue Isometrics IFC

• Milestones and Detailed Construction Schedule verified.

• HSE program for construction and completion in place

M2C

Stage 3A

PRE FABRICATION & MANUFACTURING COMPLETE

Stage 3B

DETAIL DESIGN COMPLETE & SUBCONTRACTS AWARDED

M3A M3B M3C

DETAILING & FABRICATION

Phase 3

Stage 3C

FABRICATION PRE FABRICATION &

MANUFACTURING

PREASSEMBLIES READY FOR SHIPMENT

• Engineering databases complete • All fabrication Bulk Material delivered • Shop engineering detailing and work preparation for fabrication

• Pipe spools, Steel sections and Concrete sections prefabricated.

• Deep/major foundations & trenches completed.

• Construction site temporary facilities completed

• Hook-up/Commissioning Subcontracts awarded

• Update cost, schedule & risk program

• Layout and 3D Model as build mark up of part assemblies/modules

• All Bulk Material available to support the Assembly / Erection sequence

• Part assemblies and modules/package units fabricated and mechanically complete • Commissioning commenced on selected

systems

• Update cost, schedule & risk program DETAIL DESIGN &

SUBCONTRACTING

• HSE risk assessment complete • Close out HAZOP action items • Final vendor information from all PO’s incorporated in System Engineering and layout / 3D model

• System Engineering & Layout / 3D model documentation issued for construction • Material take off finalised and bulk material top up orders placed

• 2nd priority FC Subcontracts awarded • Hook-up/Commissioning Subcontracts inquired

• Completion requirement incorporated in fabrication documentation

• Issue P& IDs IFC • Issue Isometrics IFC

• Milestones and Detailed Construction Schedule verified.

• HSE program for construction and completion in place

M2C

Stage 3A

PRE FABRICATION & MANUFACTURING COMPLETE

Stage 3B

DETAIL DESIGN COMPLETE & SUBCONTRACTS AWARDED

M3A

M3A M3B M3CM3C

DETAILING & FABRICATION

Phase 3

Stage 3C

FABRICATION PRE FABRICATION &

MANUFACTURING

PREASSEMBLIES READY FOR SHIPMENT

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PEM Control Level - Assembly/Erection

Description - Phase 4

The objective of this phase is to assemble the various parts products to a complete facility/product. Major equipment, preassemblies and modules are transported to site and installed. The construction work is MC complete & quality records available. Final insulation done and labelling & identification complete. All systems shall be ready for commissioning and commissioning can commence on selected systems. Surplus material definition and realisation started. Detailed schedules for the completion phase verified.

Key Stage Objectives

TRANSPORT & POSITIONING

M3C

ALL ASSEMBLY WORK COMPLETED

Stage 4A Stage 4B _{Stage 4C}

ALL PREASSEMBLIES POSITIONED M4B M4C MECHANICAL COMPLETION MECHANICAL COMPLETE

• Relevant as built mark-up complete • Construction work mechanical complete & quality records available.

• Categorised Punch lists for all systems. • All systems ready for commissioning and commenced in accordance with system completion schedule

• Final Insulation, Labelling & Identification complete.

• Update baseline and current cost estimate • Establish HSE program for system completion phase

ASSEMBLY

• Major equipment, Pre- assemblies & modules assembly installed.

• Install Balance of Plant Equipment and interconnecting piping systems. • Minor structures, E& I installation and Main insulation complete.

• Final Labelling & Identification started. • Operation & Maintenance Manuals available.

• Update baseline and current cost estimate and System Hand-over Schedule • Implement HSE requirements

M4A

ASSEMBLY / ERECTION

Phase 4

• Temporary Services & Power Distribution in place and Site roads complete up to sub-base.

• Major equipment, Pre- assemblies & modules transported to site and final positioned.

• On site fabrication and erection of major vessels and process equipment. • Main Structures & Bridges Complete

• Update baseline and current cost estimate • Establish HSE requirements for Assembly & MC stages TRANSPORT & POSITIONING M3C ALL ASSEMBLY WORK COMPLETED

Stage 4A Stage 4B _{Stage 4C}

ALL PREASSEMBLIES POSITIONED M4B M4B M4CM4C MECHANICAL COMPLETION MECHANICAL COMPLETE

• Relevant as built mark-up complete • Construction work mechanical complete & quality records available.

• Categorised Punch lists for all systems. • All systems ready for commissioning and commenced in accordance with system completion schedule

• Final Insulation, Labelling & Identification complete.

• Update baseline and current cost estimate • Establish HSE program for system completion phase

ASSEMBLY

• Major equipment, Pre- assemblies & modules assembly installed.

• Install Balance of Plant Equipment and interconnecting piping systems. • Minor structures, E& I installation and Main insulation complete.

• Final Labelling & Identification started. • Operation & Maintenance Manuals available.

• Update baseline and current cost estimate and System Hand-over Schedule • Implement HSE requirements

M4A M4A

ASSEMBLY / ERECTION

Phase 4

• Temporary Services & Power Distribution in place and Site roads complete up to sub-base.

• Major equipment, Pre- assemblies & modules transported to site and final positioned.

• On site fabrication and erection of major vessels and process equipment. • Main Structures & Bridges Complete

• Update baseline and current cost estimate • Establish HSE requirements for Assembly & MC stages

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PEM Control Level - System Completion

Description - Phase 5

The objective of this phase is complete the Contract Object in accordance with agreed schedule, quality and budget. Perform and finalise all commissioning activities. Ensure that any temporary items are removed and update relevant documents with “as commissioned” information. Perform the required preparations for start-up. Formalise the Operational responsibilities and start production and performance testing. Complete hand-over documentation, verify warranties and guaranties and sign-off on Acceptance Certificate

Establish experience data with Project Execution plan “as built” with lessons learned and relevant metrics for quantity/weight & productivity

Key Stage Objectives

M4 Stage 5A Stage 5C SYSTEMS COMMISSIONED M5A Phase 5 M5D COMMISSIONING START-UP COMPLETE

• Perform and finalise all commissioning activities. • Preparations for start-up • Temporary items removed. • Relevant documents updated with “as commissioned” information • Punch List cleared for start-up

• Update baseline and current cost estimate

• Implement HSE requirements

TAKE-OVER

• All work completed • Update relevant documentation (as built)

• Complete hand-over documentation • Punch lists cleared

• Warranties and guaranties sign-off on Acceptance Certificates • Project Execution plan “as built” with lessons learned

• Metrics for quantity/weight & productivity

• Total HSE program implemented

Stage 5D

START-UP

Project Execution • Operational Responsibilities formalised. • Introduction of feedstock • Start production • Performance testing Project Management • Implement HSE requirements M5C TAKEOVER COMPLETE OFFSHORE INSTALLATION COMPLETE M5B

Stage 5B (Offshore Projects)

OFFSHORE INSTALLATION

• Preparation for sail away • Perform tow out

• Complete installation of substructure / moorings / tethers

• Complete installation of the production facility

• Document offshore installation/hook-up work MC complete

• Offshore commissioning

SYSTEM COMPLETION

M4 Stage 5A Stage 5C SYSTEMS COMMISSIONED M5A M5A Phase 5 M5D M5D COMMISSIONING START-UP COMPLETE

• Perform and finalise all commissioning activities. • Preparations for start-up • Temporary items removed. • Relevant documents updated with “as commissioned” information • Punch List cleared for start-up

TAKE-OVER

• All work completed • Update relevant documentation (as built)

• Complete hand-over documentation • Punch lists cleared

• Warranties and guaranties sign-off on Acceptance Certificates • Project Execution plan “as built” with lessons learned

• Metrics for quantity/weight & productivity

• Total HSE program implemented

Stage 5D

START-UP

Project Execution • Operational Responsibilities formalised. • Introduction of feedstock • Start production • Performance testing Project Management • Implement HSE requirements M5C M5C TAKEOVER COMPLETE OFFSHORE INSTALLATION COMPLETE M5B M5B

Stage 5B (Offshore Projects)

OFFSHORE INSTALLATION

• Preparation for sail away • Perform tow out

• Complete installation of substructure / moorings / tethers

• Complete installation of the production facility

• Document offshore installation/hook-up work MC complete

• Offshore commissioning

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SECTION 6.0 PEM GLOSSARY

OF

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PEM TERMS

1.

Strategic Level

• PEM: Project Execution Model

• Phase: The Project execution is divided into stages with Milestones at regular intervals

• Stage: Further work breakdown of a Phase, represented by key events or objectives in a

project’s lifecycle. The Stage is characterised by the activities prior to reaching its milestone.

• Milestones: Start and end of each stage within the Phase. A milestone is characterised

by its multidiscipline nature. Milestones are measuring points where the combined effort from all the underlying activities meets the predefined milestone requirement..

2.

Control Level

• Key Activities: Deliverables grouped into a number of Key Activities for both Management & Discipline execution.

• Quality Level: Defined grade of completeness for a Key Activity. A quality level chain is

defined with description of grade of completeness for each quality level. Each quality level shall be achieved at certain major milestones.

3.

Execution Level

• Flow Chart: Flow chart diagram that describes the work flow within a discipline or

management environment. The flow charts has input requirement & output data shown. The flow chart contains activity boxes. The activities are grouped in CTR’s (Cost Time Resources) and has an Activity Description defined for each activity.

• Cost Time Resources (CTR): DA group of Activities collected in a database for

processing & planning of activities with man-hours and personnel categories linked to the activity. Also includes a summary of scope of work and deliverables.

• Activity Description: Description of each activity with name and no. Detailed

description of scope of work to be performed and list of deliverables for each activity.

• Governing Documentation: Procedures, Work Instructions & Guidelines supporting the

Flow charts work processes.

• Quality Level (QL) Description: Defined grade of completeness for a Key Activity

deliverable. A quality level chain is defined with description of grade of completeness for each quality level. Each quality level is normally achieved at a certain major milestone.

• Control Objects: Each Key Activity deliverable is divided into several Control Objects

that acts as information carrier (a set of information is linked to a control object) in a database or as a document or drawing.

• Status Level: Defines grade of completeness for a control object defined by the Quality

Level (QL) Description. A status level chain is defined with description of grade of completeness for each status level.

o S1 – Preliminary.

o S2 – Released for Verification/ICD.

o S3 – Frozen.

o S4 – Detail Design Completed.

o S5 – Fabrication and Commissioning Information Added.

o S6 – Part Product As-Built Information Implemented.

o S7 – Product As-Built Information Implemented.

• Check Lists: Gives the requirements at each Status Level for each Control Object. Key

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PEM Abbreviations

To be further developed.

CCE Current Cost Estimate COG Centre of Gravity CTR Cost Time Resource

DFO Documentation for Operation DM Decision Milestone

EIT Electrical, Instrument and Telecommunications FEED Front End Engineering Design

GRC Group Risk Committee

HVAC Heating, Ventilation and Air Conditioning ITT Invitation to Tender

LCI Life Cycle Information MC Mechanical Completion MEL Master Equipment List

OEM Operation, Engineering and Maintenance Manual PCS Plant Completion System

PVC/PSV Pressure Control Valve/Pressure Safety Valve P & ID Piping and Instrument Diagram

PO Purchase Order RDG Risk Decision Gate

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APPENDIX A

CONTROL LEVEL MILESTONE REQUIREMENTS

PROJECT TENDERING

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PROJECT TENDERING

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PROJECT TENDERING – MILESTONE MTA

Key Activity: Engineering

Quality Level 1

• ITT and Scope of Work reviewed

• Client requirements for Engineering identified

• Functional and Technical requirements reviewed/identified

• Concept/FEED/Design maturity assessed against PEM requirements for all relevant engineering disciplines

• First Safety Assessment done • Clarifications identified

Key Activity: Procurement

Quality Level 1

• Client requirements for Procurement identified

• Supplier Contract conditions and preferred Suppliers reviewed and identified • Sourcing level estimated

• Clarifications identified

Key Activity: Sub-Contracting

Quality Level 1

• Client requirements for Subcontracting identified • Draft Subcontracting Strategy established • Clarifications identified

Key Activity: Fabrication/Construction

Quality Level 1

• Client requirements for Fabrication/Construction identified • Draft Fabrication/Construction method established • Clarifications identified

Key Activity: Completion

Quality Level 1

• Client requirements for Completion identified

• System Design Maturity with respect to completion assessed • Clarifications identified