Reprinted from January 2016

REPRINTED FROM JANUARY 2016 LNGINDUSTRY

Japan Petroleum Exploration Co. Ltd (JAPEX) was founded in 1955 and – with major installations in Japan, Canada, Indonesia, and Libya – is well versed in the planning, construction and operation of large energy production and transmission facilities. A good example is the

US$522 million LNG receiving terminal and 40 km connecting pipeline currently under construction at Sōma Port in Japan’s Fukushima Prefecture, in the area devastated by the 2011 Tōhoku earthquake and tsunami. The terminal includes a cargo ship berth and an LNG storage tank. Plans also include a 1200 MW combined-cycle gas turbine power generation plant near the terminal.

CloudSteve Sullivan, Aconex, Asia region, presents a cloud-based collaboration platform that enables JAPEX to control project information for the construction of its new LNG terminal.

control

LNGINDUSTRY REPRINTED FROM JANUARY 2016

Front-end planning, engineering and surveying took place in 2013; the final investment decision (FID) was made later the same year; construction began in 2015; and operation is scheduled to start in 2018. To meet the project schedule, and to stay within budget, JAPEX made a critical decision early in the planning process. Rather than continuing to use legacy project information systems that have been developed in-house over many years, or to rely on an engineering, procurement and construction (EPC) contractor for project information management, JAPEX chose to implement Aconex

– a neutral, cloud-based collaboration platform that gives owners complete control of information flow and processes through all phases of the project lifecycle.

Why is owner control important?Historically, many oil and gas companies have relied on EPC contractors to manage project information for the engineering, design and construction of capital assets as complex as a large LNG terminal. However, from the asset owner’s viewpoint, this strategy has inherent risk.

Analysis of over 60 oil and gas projects managed on the Aconex platform shows that developments valued at US$300 million to US$1 billion typically involve 720 users from 96 different organisations and six countries, and generate 473 000 items of project correspondence, 325 000 documents, and nearly 2 million actions during the construction phase alone. On the majority of projects, this adds up to more than 900 GB of data.

Controlling these documents through project-wide collaboration provides the owner’s best opportunity for applying corporate governance, managing risk, and keeping oil and gas megaprojects on schedule and within budget. The potential value is significant – research by Booz Allen Hamilton indicates that 40% of megaprojects exceed their budget and cycle time by more than 10%.1

Today, many oil and gas companies have specialised experience in-house in the form of construction managers and other staff who have worked on megaprojects. When these industry professionals have better tools to review and analyse the documents and actions generated during design and construction, their experience is leveraged. The owners of LNG terminals and other complex projects can spot potential problems early, remedy operability and maintainability issues prior to construction – when they can be addressed most effectively – and identify opportunities to speed up project execution and reduce costs.

Control of, and access to, the information generated during the project is also useful post-construction, when owners become operators and asset managers. Operations and maintenance staff can be introduced to the project earlier and more purposefully, which facilitates a smoother handover and a faster transition to profitable operations. With the right tools, information derived through design and construction can be generated digitally to create electronic operation and maintenance (O&M) manuals for handover and commissioning of the built asset.

Figure 2. The Aconex portfolio of solutions supports all phases of the lifecycle for large, complex capital projects in oil and gas and other industries.

Figure 1. The Japan Petroleum Exploration Co. Ltd (JAPEX) terminal will store and vaporise LNG to be offloaded from large ocean-going tankers docked at the new cargo ship berth in Sōma Port, Japan.

Figure 3. Using the Aconex project-wide collaboration platform, JAPEX is building a US$522 million LNG terminal on an accelerated, three-year delivery schedule.

REPRINTED FROM JANUARY 2016 LNGINDUSTRY

Control of project information does not constrain access to that information. On Aconex, all project information is secure, and access can be limited on a need-to-know basis by the project participants that contribute their proprietary information to the project. It is an intrinsically more open information management system than legacy software installed on the firewalled enterprise servers of one or more members of the project team. The platform is used by owners, contractors and other stakeholders in an environment where everyone is an equal participant, and no participant is more entitled to project information than any other.

Where do owners gain advantage?A look at two common oil and gas project processes – change orders and squad checks – illustrates the advantages that accrue to owners when they take control of project information during the planning, engineering, design, and construction phases of a project.

Change ordersWhen EPC contractors submit and manage requests to change initial plans for design and/or construction, they initiate change order correspondence with project workflow templates. Workflows streamline processes so that decisions are made more quickly, with full visibility during and after the project. The templates automate the attachment or linking of relevant documents and drawings, the upload of change orders to the platform, and their transmittal to the appropriate members of the project team for review and approval. Change orders and their attachments are archived securely and tracked in a project-wide audit trail from the moment they enter the system. The application of structured metadata helps establish and maintain relationships between change orders and relevant items of plant equipment.

As a result, when owners receive change orders, they also receive the information needed to evaluate them, delegate them as appropriate, and approve or decline them. If needed, they can ‘drill down’ to review previously generated change orders, existing requests for information (RFIs), or other relevant project data. They can also export the information to internal systems or reports to external stakeholders. Owner decisions and actions become part of the continuously updated project-wide audit trail, which is available permanently.

Owners and their contractors can check the status of any change order and easily summarise all approved and unapproved requests, as well as their interdependencies. The entire change order workflow is completely visible, and project participants who missed deadlines to respond are easily identified for corrective action.

As a result, organisational approval processes are followed consistently, escalations are

managed efficiently, and the status of change orders is readily available to all project participants.

Squad checksAs they involve the coordinated review of technical documents across several functions, squad checks can be slow, error-prone and hard to manage. Here, automated workflows also reduce processing time and increase visibility. As with change orders, a project workflow template is used to identify relevant documents, confirm participants, and determine due dates for deliverables and actions.

When a squad check is initiated on Aconex, it is automatically archived and entered into the project audit trail, and a preconfigured review and approval process is assigned. Recipients can review the squad check, attach documents, delegate as appropriate, and add comments. The current status of the squad check is visible at all times.

Automating squad checks through workflows helps project owners accelerate review and approval processes, enforce the timely application of quality assurance procedures, and streamline the consolidation of comments for transmittal back to the initiating function – all while maintaining an audit trail for future reference. Progress against committed delivery times is also visible so that participants and their colleagues can track their performance.

Change orders and squad checks are just two examples of critical project processes that can be structured and streamlined for increased efficiency and reduced risk. A more specific example on the Sōma Port LNG terminal project was the creation and management of flow diagrams for the implementation of tsunami safety measures and the construction of one of the first submerged combustion LNG vaporisers built in Japan. Even the amount of expensive nickel plating, which was used as lining in LNG tanks, was monitored with the Aconex platform’s workflows.

In a project-wide collaboration environment, all documents, correspondence, and other project information are securely and centrally managed in the cloud. Automated workflows facilitate review, analysis and reporting, while driving transparency and accountability. As a result, owners have multiple opportunities during construction to improve

Figure 4. Aconex has managed a broad range of oil and gas capital projects, from floating production storage offloading (FPSO) units to underwater pipelines, processing plants and petrochemical facilities.

LNGINDUSTRY REPRINTED FROM JANUARY 2016

project quality, maintain schedules and budgets, and ensure that their asset is ready for operation on practical completion.

How difficult is implementation?In the enterprise IT environment, implementation of a new project information system could take several months. JAPEX had its LNG terminal project up and running on Aconex in less than one month, as it made the decision before the start of construction to control project information and adopt a neutral, cloud-based collaboration platform. Mid-project implementations do occur, but they come with extra costs, frequently interrupt project execution, and may cause issues with adoption across the project team.

The critical categories of project information that need to be managed during planning and construction – and, therefore, addressed in implementation – include the following:

� Project templates: since Aconex had previously supported comparable oil and gas industry projects, the appropriate forms, automated workflow templates, document numbering schemes, and metadata templates were available and ready to be applied to the Sōma Port LNG terminal, with only minor changes needed.

� Document control: oil and gas megaprojects generate hundreds of thousands of documents or more, including specifications, drawings, reports, and other technical materials. All of these need to be shared, reviewed, updated, tracked, and captured in an audit trail. For drawings and specifications, version control is particularly

important, as the use of out-of-date information is a major source of errors, rework and disputes.

� Structured communications: megaprojects also generate high volumes of correspondence and paperwork. It is beneficial if the required capabilities for structuring, managing, tracking, archiving, searching, reporting, and auditing communications are built into the collaboration platform and are ready to use.

For JAPEX, project-wide collaboration in Japanese is essential for instantaneous communications among project team members in four different locations in Japan – Tokyo, Yokohama, Osaka, and Sōma. Aconex offered a Japanese language platform and delivered on-site training and consulting services to ensure that the JAPEX implementation met all of the project requirements, and it continues to provide ongoing support.

Is the solution working?At the time of writing, the Sōma Port LNG terminal was on track to meet an accelerated schedule and stay within budget. This is the first LNG terminal project for JAPEX, and the schedule is nearly a year shorter (25%) than that of comparable projects. The Aconex solution increases the speed and efficiency of processes across the project, which leads to significant time and cost savings.

Reference1. Booz Allen Hamilton, ‘Capital Project Execution for the

Oil and Gas Industry’ (2006).