Individual Report Final.docx

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shouould ld be submbe submititteted d wiwith th anan Extenuating ircumstancesExtenuating ircumstances laim laim oorm rm and and the the relrelateated d supsuppoportirtingng e$idence.

e$idence. D

Duue e DDaaee !!oor r offffiico ciiaal l uu""e e oonnll##

MATRIC No

MATRIC No 07036210703621

SURNAME

SURNAME McAndrewMcAndrew

!IRST NAME$S%

!IRST NAME$S% GreigGreig

C

COOUURRSSE E TTIITTLLEE MMSSc c OOiil l & & ''aa" " EEnnggiinneeeerriinngg

MODULE NUMBER & MODULE NUMBER & TITLE

TITLE ENM()* Engineering +ro,ec Manage-enENM()* Engineering +ro,ec Manage-en

ASSI'NMENT TITLE

Msc i! " Gas Engineering

Msc i! " Gas Engineering

Project Management

Project Management

#rans$%aharan Gas Pi&e!ine

#rans$%aharan Gas Pi&e!ine

Greig McAndrew Greig McAndrew

M%c i! and Gas Engineering M%c i! and Gas Engineering %choo! of

%choo! of EngineeringEngineering 'G- -ni.ersit/ 'G- -ni.ersit/ Garthdee ose Garthdee ose  Aerdeen  Aerdeen  A10 74  A10 74 I 

I   Astract Astract

#his re&ort discsses the &roject management as&ect for the

#his re&ort discsses the &roject management as&ect for the constrction of theconstrction of the #rans$%

#rans$%aharan Gas Pi&e!ine5 (nc!ded are aharan Gas Pi&e!ine5 (nc!ded are detai!ed !ists of detai!ed !ists of &roject ojecti.es a!ong&roject ojecti.es a!ong with a &roject sco&e and

with a &roject sco&e and &roject de!i.era!e&roject de!i.era!es5 M!ti&!e sitations ha.e eens5 M!ti&!e sitations ha.e een considered with a fina! so!tion to com&!ete the

IIII DDeeccllaarraattiioonn...i...i Table of igures...i$ Table of igures...i$

Figures

Figures...i$...i$ Tables

Tables...i$...i$ 4.

4. ExecExecuti$uti$e e 'umm'ummar*.ar*...4..4 5.

5. +nt+ntrodroductuctionion...5.5 5.4.

5.4. Background Background ...5...5 5.5.

5.5. Project Rationale...Project Rationale...5...5 6.

6. 2r2ro7eo7ect ct DefDefiniinitiotion..n...8..8 6.4.

6.4. PurposePurpose...8...8 6.5.

6.5. Project Scope...8Project Scope...8 6.6.

6.6. Objectives...Objectives...8...8 6.8.

6.8. Project DeliverablesProject Deliverables...9...9 6.9.

6.9. Key Performance ndicators !KP"Key Performance ndicators !KP"...9...9 6.:.

;. onclusion...58

;.4. Recommendations...58

<. @eferences...59

?. Appendices...5:

?.4.  $ppendi. / 0 +antt #'art ...5:

?.5.  $ppendi. 1 0 %ork Breakdo&n Outline...5?

?.6.  $ppendi. 2 0 Responsibility -atri. ...6=

igure 4 & ork Breakdown 'tructure...< igure 5 & 1e* 'takeholders...?

igure 6 & umulati$e @eal ash low...44

igure 8 & '>T Anal*sis...45

igure 9 & ritical 2ath Anal*sis...48

igure : & 0antt hart...49

igure ; & >rganiCational Breakdown 'tructure...4:

igure < & !onti arlo 'imulation :_...55

 Tables

Table 5 & 1e* 2ro7ect Deli$erables...9

Table 6 & 1e* 2erformance +ndicators...: Table 8 & Fearl* Expenditure...4=

Table 9 & Time Estimations...46

Table : & @oles and @esponsibilities...4;

Table ; & @esponsibilit* !atrix...4< Table < & !ain @isk onsiderations...54

1. Executive Summary

This report shows 'ontrach/s e$aluation and anal*sis for the Algerian section of the Trans&'aharan 0as 2ipeline (T'02) pro7ect. The pro7ect has been halted recentl* due to issues with %igerian militant opposition

groups and financing difficulties.

+nformation presented re$alidates the importance of the T'02 and pro$es its capabilit* to not onl* pro$ide profit but to also aid areas in dire need of de$elopment.

To show the T'02/s capabilit*, an anal*sis into the o$erall cost has been carried out, along with a risk anal*sis to show potential problems with the current pro7ect plan. The main risks are securit* and financial but all of them ha$e been presented with mitigation options. Through the use of

2. Introduction

2.1. 

Background

+n 4?;=, an idea was proposed to build the Trans&'aharan 0as 2ipeline, which would stretch from arri, %igeria to Iassi @/!el in Algeria 4_{. This}

pipeline was to be used to transport natural gas from %igeria to Algeria to be sold to the EJ and is expected to reach a total length of approximatel* 8,45<km.

'ontrach are the national oil and gas ompan* representing Algeria and are responsible for the construction and installation for the Algerian

section of the T'02. This section spans roughl* 564=km and begins at K+n 0ueCCam/ at the %iger&Algeria border (in the Touareg region), terminating at the pipeline hub Iassi @/!el in Algeria.

Algeria and then distributing it into the EJ would not onl* produce more re$enue for the three countries but also help in the fight against global warming.

- 9 trillion cubic metres e#uates to 4= *ears of consumption for the EJ.

- European gas fields are depleting. +t is pro7ected that b* 5=59, <=M of gas consumed b* the EJ is to be imported 5_{. To fulfil the}

*earl* gas re#uirements, the EJ must source their gas from other countries, meaning for the foreseeable future, demand is likel* to remain high and the profitable forecast will not be put at risk. - As the T'02 runs through %igeria, %iger and Algeria, it has the

additional ad$antage of suppl*ing gas to these countries, as well as !ali and Burkina aso 5_.

3. Project e!nition

3.1. 

Purose

The purpose of this document is to 7ustif* 'ontrach/s $enture into the construction of the Algerian section for the Trans&'aharan 0as 2ipeline based on the o$erall costs, risks and benefits.

Additionall*, it is to re#uest permission and funding to progress to the initiation stage of the pro7ect to show a detailed allocation of resources for the full length of the pro7ect.

3.2.

Project !coe

This report applies onl* to 'ontrach/s in$ol$ement in the pro7ect

initiation, planning, design and construction for the Algerian section of the Trans&'aharan 0as 2ipeline (+n&0ueCCam to Iassi @/!el).

3.$.

Project %eli#erables

The table below shows the ke* deli$erables for the pro7ect and links each deli$erable to its corresponding

ob7ecti$e-O8,eci=e Deli=era8le

>7

Deli$er Algeria/s 564=km section of the Trans&'aharan 0as 2ipeline which is to ha$e the following

specifications-• 9:” Diameter.

• The abilit* to transport 6= billion cubic metres of natural gas

per *ear.

• 6 !etering stations, : compressor stations, 464 $al$es and

8 'ADA s*stems.

(7 2roduce re$enue of approximatel* G5.6< billion per *ear.

)7 'uccessful cooperation with %iger and %igeria to get the pipeline commissioned for Hune 5=55.

?7 0eopolitical benefits which will come from the di$ersification of European gas suppliers.

@7 Tap in points for the towns surrounding the T'02. 7 Tie in with existing storage facilit* at Iassi @/!el.

Sai"facio n

customer ha$e been met. This will mostl* come down to #ualit* of work and how 'ontrach handled an* problematic situations. HSE

'afet* is a ma7or 12+. This co$ers all emplo*ees in$ol$ed with an* area of the pro7ect but also towards stakeholders and the en$ironment.

Table 2 3 Key Performance ndicators

3.. 

Considerations

!ultiple routes were considered during the de$elopment of the pro7ect plan before agreeing to run the pipeline from +n&0ueCCam to Iassi @/!el.

The risks and o$erall costs for this route ha$e been detailed throughout the report.

3./. 

Constraints

'ontrach ha$e $er* few constraints, but the ones that do exist could pose a serious risk to the

;. 'ix compression centres will need to be constructed within Algeria based on length of the pipeline.

 Trans!aaran Gas Pieline 1. %e#elo Project Carter 1.1 Project !coe 1.1.1 Plan Project 1.2 %e#elo ork Plan 1.2.1 45ecute Project 1.3 %esign 1.3.1 Control 1.$ Project Manage*ent 1.$.1 Close Project 1.& Client !atis)action Re#iew 1.&.1

". Project evelo#ment Plan

$.1.

ork Breakdown !tructure

,B!-The pro7ect is broken down into sections with multiple tasks forming under each. A full work breakdown outline (B>) can be seen in

Appendix 5. To simplif* matters, a work breakdown schedule has been designed. This lists the fi$e main sections of the B> and shows some of  the ke* tasks re#uired to complete each

section-$.3. 

!takeolders

ith such a large pro7ect there are a number of stakeholders in$ol$ed with the T'02, all of which must be consulted on how the pro7ect is carried out and informed if there are an* changes. A diagram showing the ma7or stakeholders can be seen in igure 5.

communit* support is possible through local emplo*ment opportunities which benefit the pro7ects sustainabilit*.

$.$.

Cost Anal(sis

The Algerian 0o$ernment has a 89M stake in the T'02 pro7ect, with %iger ha$ing 4=M and %igeria ha$ing the remaining 89M. The initial budget in 5==: was G46.; billion. Taking into consideration inflation a 5=4: budget is estimated at G4:.4 billion.

The Algerian section of the T'02 is the longest and therefore re#uires 99M of the total budget based on total length. Jsing this budget, the financial manager must allocate which tasks re#uire the most capital. A summar* of the forecasted cost breakdown can be seen in table 8 below, detailing how much is spent each

*ear-ear

5=4: 5=4; 5=4< 5=4? 5=5= 5=54 5=55

+lanning

Figure 2 3 #umulative Real #as' Flo& 

A maximum exposure of G49.4 billion is a risk detailed within the risk anal*sis (taking into account inflation and discount rate), especiall* since pa*back is not until 5=6=. Iowe$er, the numerous benefits detailed

$.&.

!trengts8 eaknesses8 "ortunities and Treats

,!"T-Anal(sis

E$er*thing from an entire compan* to a single pro7ect should undergo a '>T anal*sis. eaknesses and threats should be taken into special consideration as the* list what ma* cause a pro7ect to fail.

$..1. +*le*entation

To produce an accurate 0antt chart and ritical 2ath Anal*sis, an

e$aluation to calculate expected times for each task must be carried out. The methodolog* to calculate these times can be seen

below-T _e=a+

4_m+b

6 T e= Expected Time a= Most Optimistic Time

b= Most Pessimistic Time m= Most Likely Time

or each task this e#uation must be applied. A sample calculation for Acti$it*  is shown along with a table of $alues for the remaining

tasks-T _e=

12₊

(

)

T _e=13.66 T _e=14.0weeks

Aci=i# +re0ece""or

Ti-e E"i-ae" E/ece0 Ti-e O/i-i"i Li1el# +e""i-i"i

$..3. Gantt Cart

>ne of a pro7ect manager/s most useful tools leading to success of a pro7ect is a detailed 0antt chart. E$er* task re#uired for completion is gi$en a start and end date. Tasks must be completed within these dates or the pro7ect will surel* o$errun. !ilestones are also inserted to note the end of a ke* section and the start of another. igure : shows the

beginning and ending of 'ontrach/s schedule along with one of its most Figure 7 3 #ritical Pat' $nalysis

Algerian Go#ern*ent !ontrac Managing %irector Ad*inistratio n Ad*in o:ce !uort Grou Project Manage*ent PM ":ce 7!4 Project !onsor !teering Grou 4ng. %esign = 45ecution 4ngineering %esign  >unior %esig n 4ngineers !ub Contractors Project Managers  Testing = 7ando#er Re#iew Grou  Testing 4ngineers

$. Project %anagement and &rganisation

&.1.

Project "rgani?ational !tructure

The Algerian 0o$ernment were responsible for the hiring of 'ontrach. This puts them at the top of the organiCational structure which can be seen in igure 4

below-&.2.

Roles and Resonsibilities

+ncluded in the >B' and 0antt chart is a list of people who are

responsible for different tasks during each section of the pro7ect. The roles and responsibilities of the lead and additional team members can be seen

below-Role" Re"/on"i8iliie"

Managing Direcor @esponsible for all areas of the pro7ect. !akes sure the correct person is hired for the correct position.

+ro,ec Manager

>$ersees and controls the entire pro7ect from initiation to hando$er. The pro7ect manager will monitor each emplo*ee/s dail* acti$ities against the 0antt chart to make sure the* are not falling behind.

+ro,ec Engineer

Tasked b* the pro7ect manager to carr* out set tasks b* a set date. @eports directl* to the pro7ect manager if an* foreseeable problems arise.

En=iron-enal 'ur$e*ing and land ac#uisition are a large part of the  7ob. The entire Algerian section must be tested to

&.3. Resonsibilit( Matri5

WBS Ele-en

+ro,ec Tea- Me-8er" Oher

Sa1ehol0er" Admin >ffices 2! >ffice Design Engineers 'ub& ontractor @e$iew Q  Testing 'ponsor 'teering 0roup +ro,ec Charer4 R  +ro,ec Sco/e _{R C C} +lan +ro,ec4 _R  Ri"1 Anal#"i" _{R C N} Eecue +ro,ec4 R R R R   De"ign S C3A R C N Conrol4 _R  +ro,ec Manage-en R C N Clo"e +ro,ec4 _R  Han0o=er _{S R S S N A}

Ke#4 R  Re"/on"i8leF S  Su//or Re9uire0F C  Mu" 8e Con"ule0F N  Mu" Be Noifie0F A  A//ro=al Re9uire0

Table 9 3 Responsibility -atri. 

The sample abo$e details the ma7or milestones and who is responsible. Tasks often re#uire additional support or appro$al before the* can be checked off. A full list of tasks and the team members responsible for each can be seen in Appendix 6.

&.$. 

Controls

A pro7ect manager uses a $ariet* of controls to ensure the pro7ects success. These range from simple scheduling to cost and risk

management. The managing director should o$ersee these where possible.

&.&. 

Co**unication

ommunication is re#uired throughout the entire length of the pro7ect, amongst a wide range of parties both internall* and externall*. All members linked to the pro7ect are responsible for their indi$idual tasks but are also responsible for reporting back to their respected superior.

'. Potential (is)s and %anagement

.1.

Risk Anal(sis

ith a pro7ect this large, a risk anal*sis is re#uired. The risks mentioned below can either cause serious damage to both the pipeline and

en$ironment or will cause issues with the timeline, leading to dela*s and ine$itable pro7ect

failure-T#/e of Ri"1 De"cri/ion Miigaion

En=iron-enal Damage to the en$ironment will lead to bad media attention

ontinual risk management and sur$e*s completed b* the en$ironmental engineer/s team will be carried out.

depending on the

se$erit* of the disaster it ma* be una$oidable.

OrganiGaional

Loss of 2artnership

@egular contact and updates are re#uired, along with the occasional conceding to other ideas.

'eparate teams in each countr* not communicating enough

@egular meetings either in person or through $ideo conferencing will keep all teams up to date.

+oliical 2ossible strike action will dela* the pro7ect

This is an uncertaint* and will onl* occur if there are problems within the workforce. 'afet* plans are in place to pre$ent accidents. A

*. +onclusion

This report focuses on the benefits and possibilities that are created b* the construction of the Trans&'aharan 0as 2ipeline, along with current setbacks and recommendations to ensure pro7ect sur$i$abilit*. The main conclusion from this report is that the increasing demand of gas re#uired from the EJ will produce a large profit margin for the three 0o$ernments in$ol$ed with the pro7ect.

Jnder de$eloped areas are also set to benefit from the installation as  “tap&in” points will be made a$ailable to distribute natural gas to

neighbouring towns as well as countries such as !ali and Burkina aso.

ith man* emplo*ees currentl* out of work due to the on&going oil crisis, this pro7ect will help pro$ide local emplo*ment opportunities. +n order to

more countries in case the EJ continues to purchase most of it/s gas from @ussia.

,. (eferences

(4) & abi @. =igeria( $lgeria $gree to Build Sa'ara +as >ink?

Iomepage on the +nternet. @eutersS 5==? updated 5==? Hul* 6rdS cited 5=4: !arch ?th. A$ailable

from-http-OOuk.reuters.comOarticleOnigeria&algeria&pipeline& idJ1L689;:::5==?=;=6spUtrue

(5) & %igeria & Algeria 2ipeline easibilit*O%eeds Assessment

(6) & Awhotu E. =igerian( $lgerian Officials Discuss Sa'aran +as Pipeline? Iomepage on the +nternet. 5==? updated 5==? ebruar* 5=thS cited 5=4: !arch =?. A$ailable

from--. ##endices

@.1. Aendi5 1  Gantt Cart

@.3. Aendi5 3  Resonsibilit( Matri5

WBS Ele-en

+ro,ec Tea- Me-8er" Oher

Sa1ehol0er" Admin >ffices 2! >ffice Design Engineers 'ub& ontractor @e$iew Q  Testing 'ponsor 'teering 0roup >7 Iniiaion 4.4. +ro,ecCharer4 S R . . . . . >7>7>7 +ro,ecSco/e S R . . . C C >7>7>7>7 I0enif# O8,eci=e" . R . . . . . >7>7>7(7 I0enif# Deli=era8le" . R . . . C C >7>7>7)7 WBS . R . . . C C >7>7>7?7 !ea"i8ili# Su0# . R . . . C C >7>7>7@7 A""ignRole" . R . . . . . 5. +lan +ro,ec4 (7>7 De=elo/ Wor1 +lan . R . . . . . (7>7>7 Re=i"eWBS . R . . . S S (7>7(7 De=elo/ 'an Char . R . . . C C (7>7)7 De=elo/Bu0ge . R . . . . .

(7>7?7 Ri"1Anal#"i" . R . . . C N (7>7@7 DeailRoue . R . . . . . (7>77 'eoechnical Sur=e# . R . . . . . (7>7;7 En=iron-enal Sur=e# . R . . . . . (7>7<7 +er-i" Ac9ui"iion S R . . . . . (7>77 Lan0 Ac9ui"iion S R . . . . . (7>7>*7 Infra"ru cure Seu/ . R . . . . . 5.4.44. I0enif# Man/o6er De/lo#-en . R . . . . . (7(7 Conrol+lan . R . . . . . (7(7>7 De=elo/ uali# Conrol +lan . R . . . . . (7(7(7 De=elo/ Co--unicaion +lan . R . . . . . (7(7)7 !inali"e +ro,ec +lan . R . . . . . 6. Eecue +ro,ec4 )7>7 De"ign S C3A R . . C N )7>7>7 DefineSage" . A R . . . .

)7>7(7 De"ign+i/eline . A R . . . . )7>7)7 De=elo/ +roo#/e . A R . . . . )7(7 Manufacuring . A C R . . . )7(7>7 Confir-S/ec7 S R A . . . . )7(7(7 Sche0ule S R . . . . . )7(7)7 Ten0ering S R . . . . . )7(7?7 Or0ering S R . . . . . )7(7@7 Su8Or0er" . . . R . . . )7(77 Manufacuring . . . R . . . )7(7;7 In"/ecion . R R . R . . )7(7<7 Re=ie6uali# . R . R R . . )7)7 Te"ing . A . C R . . )7?7 I-/le-enaio n . S . R . . . )7?7>7 Tran"/or . N . R . . . )7@7 Con"rucion . R . R . . . )7@7>7 Monior E9ui/-en . R . . . . . )7@7(7 A""ign . R . . . . .

Man/o6er )7@7)7 Con"rucion . . . R . . . )7@7?7 Te"ing . . . . R . . )7@7@7 Co--i""ioning . R . . R . . ?7 Conrol4 ?7>7 +ro,ec Manage-en . R . . . . . ?7(7 Ri"1 Manage-en . R . . . . . ?7)7 U/0ae +ro,ec +lan . R . . . . . 9. Clo"e +ro,ec4 @7>7 Sai"facion Re=ie6 . R . . . . . @7(7 Han0o=er S R . S S N A

Ke#4 R  Re"/on"i8leF S  Su//or Re9uire0F C  Mu" 8e Con"ule0F N  Mu" Be Noifie0F A  A//ro=al Re9uire0

@.$. Risk Manage*ent  Monti Carlo !i*ulation

T#/e of Ri"1 +ro8a8ili# I-/ac Raing De"cri/ion Miigaion Ne6 Raing

En=iron-enal 9 ; 69

Damage to the en$ironment will lead to bad media

attention

ontinual risk management and sur$e*s completed b* the en$ironmental engineer/s team will be carried out.

4<

!inancial

8 ; 5< +nsufficient funds due to

dela*s or estimation of costs

Budget plans are set at the beginning of the pro7ect. Additional funds should be set aside for an* further re#uirements such as decommissioning.

48

: < 8<

@ise in material price and inflation ma* cause serious

issues with budget

A deal can be made earl* on with the manufacturer to agree a fixed price should changes be re#uired to the pipeline. +nflation is taken into account during costing.

4<

&& && && !aximum Exposure of G49.4 billion across : *ears of 

&& &&

construction for the entire T'02

'o=ern-en 6 ; 54 2ossible dela*s with permits

and appro$als

These tasks are to be carried out

immediatel* to a$oid future dela*s.

<

Naural 4 <&4= <&4=

%atural disasters could dela* or potentiall* destro* the

pro7ect

Per* difficult to

mitigate. Depending on the se$erit* of the disaster it ma* be una$oidable.

&&

OrganiGaional

5 < 4: Loss of 2artnership

@egular contact and updates are re#uired along with the

occasional conceding to other ideas.

8

: 8 58

'eparate teams in each countr* not communicating

enough

@egular meetings either in person or through $ideo

conferencing will keep all teams up to date.

45

+oliical 6 ; 54 2ossible strike action will

dela* the pro7ect

This is an uncertaint* and will onl* occur if there are problems

&&