how to avoid unplanned expenses - globuc

International projects:

How to avoid unplanned expenses

and schedule disruptions?

Olga GushchinaTS Engineering GmbH

DOWNSTREAMPROJECT MANAGEMENT04.12.2019Brussels

CPC

Sakhalin II

ZapSib 01

Yuzhnoye Khylchuyu

Kharyaga

Togliatti 02

Yamal LNG

ZapSib 02

Amur GPP

Arctic LNG

Portovaya LNG

Nizhnekamsk H2

Karabatan

Vysotsk

Nizhnekamsk 03

Amur 03

2

Experience: Main Projects

Total (France)

Petrofac (Great Britain)

ConocoPhillips (USA)

Saipem (France)

Fluor (USA)

Linde AG (Germany)

TechnipFMC (France)

AirLiquid (France)

Hess (USA)

Siemens (Germany)

TNK-BP (Great Britain)

Worley Parsons (Great Britain)

Sofresid (France)

PraxAir (USA)

VergaEngineering (France)

Gazprom, LLC (Moscow)

Sibur Holding, PJSC

Lukoil, OJSC (Moscow)

Sakhalin Energy (Yuzhno-Sakhalinsk)

TAIF NK, OJSC (Kazan)

Nizhnekamskneftekhim (Nizhnekamsk)

Peton (Ufa)

Rosneft (Moscow)

Zarubezhneft, OJSC (Moscow)

Naryanmarneftegas, LLC (Naryan-Mar)

Globalstroi-Engineering, CJSC (Moscow)

PermNIPIneft, LLC (Perm)

NIPIGas (Moscow, Krasnodar)

NIIK, OJSC (Dzerzhinsk)

VNIPINeft, OJSC (Moscow)

Chelyabgipromez (Chelyabinsk)

Mosgipromez (Moscow)

VolgaNIPITech (Samara)

Giprokauchuk, OJSC (Moscow)

Giprovostokneft (Samara)

Giprotyumenneftegas, OJSC (Tyumen)

Stroitransgas, OJSC (Moscow)

KuibyshevAzot (Togliatti)

Experience: Companies

3

Project Management

Project Coordination

Vendor Management

Scheduling

Budget Control

Translation

Contract Management

Procurement

Cost controlling

Translation Management

Audits

Expediting

Contract negotiations

Risk assessment

Experience: Activities

4

Costs

Schedule

Quality

SALES

CONTRACTING

ENGINEERING

PROCUREMENT

PROJECT

MANAGEMENT

SUPPLY

AND

DELIVERY

CONSTRUCTION

START-UP

AND

COMMISSIONING

Optimization trick: optimize 1 process to optimize many

5

Technical

solutions

Negotiations

ENGINEERINGSALES

Codes and Standards

implementation

Communication

Customs

documentation

Delivery

schedule

Engineering

schedule

Construction

activities schedule

Correspondence

Vendor

selection

Purchasing

of equipment

Transition between

Engineering stages

CONTRACTING

PROCUREMENTSUPPLY

AND

DELIVERY CONSTRUCTION

PROJECT

MANAGEMENT

START-UP

AND

COMMISSIONING

Meetings

Tests

3D Model

reviews

HAZOP

Acceptance

tests

QA/QC

P&ID

reviews

Author

supervision

Construction

coordination

Expediting

Negotiations

Contract

discussions

Technical

clarifications

Negotiations

Draft

contract

Hook-up and

assembly

Permits Allowances

Project

coordination

MOMs

ReportingPayment

milestones

Equipment

selection

Approvals

INTERNATIONAL

PROJECT

Optimization trick: optimize 1 process to optimize many

6

An international Project: Main participants

7

EP (C) ConstructionRDI

Vendor 1

Subvendor 1

Subcontr. 2

LogisticsCertification EU

Plant Owner

Gen. Contractor

V2 Vn

SV2 SV3 SVm

Subcontr. 1

Subcontr. 3 Subcontr. 4

. . .

. . .

. . . Subcontr. N

An international Project: Contractual relations

8


Vendor 1

Subvendor 1

Subcontr. 2


Plant Owner

Gen. Contractor

V2 Vn

SV2 SV3 SVm

Subcontr. 1


. . .

. . .

. . . Subcontr. N

An international Project: Additional participants

9


Vendor 1

Subvendor 1

Subcontr. 2


Plant Owner

Gen. Contractor

V2 Vn

SV2 SV3 SVm

Subcontr. 1


. . .

. . .

. . . Subcontr. N

Certification RF

GGE

RTN

Customs

An international Project: Documentation circulation, as per Contract

10

. . .

. . .


Vendor 1

Subvendor 1

Subcontr. 2

Logistics

Customs

Certification RF

GGE

RTN

Certification EU

Plant Owner

Gen. Contractor

V2 Vn

SV2 SV3 SVm

Subcontr. 1


. . .

Subcontr. N

An international Project: Documentation circulation, reality


Vendor 1

Subvendor 1

Subcontr. 2

Logistics

Customs

Certification RF

GGE

RTN

Certification EU

Plant Owner

Gen. Contractor

V2 Vn

SV2 SV3 SVm

Subcontr. 1


. . .

. . .

. . . Subcontr. N

. . .

. . .

11

An international Project: Integral parts


Vendor 1

Subvendor 1

Subcontr. 2

Logistics

Customs

Certification RF

GGE

RTN

Certification EU

Plant Owner

Gen. Contractor

V2 Vn

SV2 SV3 SVm

Subcontr. 1


. . .

. . .

. . . Subcontr. N

. . .

. . .Codes & Standarts

RF C & SInternational

C & SNational

ContractGlossary

BudgetSchedule

12

Construction

Certification EU

Gen. Contractor

Plant Owner

An international Project: International

13

EP (C)RDI

Vendor 1

Subvendor 1

Subcontr. 2

Logistics

Customs

Certification RF

GGE

RTN

V2 Vn

SV2 SV3 SVm

Subcontr. 1


ContractGlossary

BudgetSchedule

Codes & Standarts

RF

. . .

. . .

C & SInternational

C & SNational

. . . Subcontr. N

EN FR ITRU CH JPDE

NOTE

1. OWNER has no contractual relations with 98%

of the Project participants

2. English is a foreign language for over 80%


14

FYI

In Russian Federation ALL DOCUMENTATION

submitted to official bodies and authorities

MUST be provided in RUSSIAN

Project language is ENGLISH

BUT

15

EP (C)

Vendor 1

Subvendor 1

Logistics

Vn

SV3 SVm

Subcontr. 1

Subcontr. 3

Construction

Certification EU

Gen. Contractor

Plant Owner

An international Project: to be translated

16

RDI

Subcontr. 2

Customs

Certification RF

GGE

RTN

V2

SV2 SV3

Subcontr. 4

ContractGlossary

BudgetSchedule

Codes & Standarts

RF

. . .

. . .

C & SInternational

C & SNational

. . .

Translation

EN FRRU CH JPDEIT

Subcontr. N

Technical

solutions

Negotiations

ENGINEERINGSALES

Codes and Standards

implementation

Communication

Customs

documentation

Delivery

schedule

Engineering

schedule

Construction

activities schedule

Correspondence

Vendor

selection

Purchasing

of equipment

Transition between

Engineering stages

CONTRACTING

PROCUREMENTSUPPLY

AND


PROJECT

MANAGEMENT

START-UP

AND

COMMISSIONING

Meetings

Tests

3D Model

reviews

HAZOP

Acceptance

tests

QA/QC

P&ID

reviews

Author

supervision

Construction

coordination

Expediting

Negotiations

Contract

discussions

Technical

clarifications

Negotiations

Draft

contract

Hook-up and

assembly

Permits Allowances

Project

coordination

MOMs

ReportingPayment

milestones

Equipment

selection

Approvals

INTERNATIONAL

PROJECT

An international Project: to be translated

17

Translation of User

Engineering documentation(Pre-FEED, FEED, DD…)

Client

Owner

Authorities

Vendors

Codes and Standards

International / national

Client

Owner

As-built documentation Client

Owner

Authorities

Customs documentation * Customs

Operation manuals * Owner

PD EPC

Codes and Standards of RF EPC

Certificates * Vendors

EPC

Meetings, MOMs + All parties involved

Comments, correspondence + All parties involved

An international Project: to be translated (execution phase)

EN RU

ENRU

ENRU

ENRU

EN RU

EN RU

EN RU

EN RU

EN RU ENRU

EN RU ENRU 18

NOTE

3. OWNER, CLIENT and AUTHORITIES receive

over 90% of documents in translation, not in

original

4. Some Engineering input data exists

in RU only

19

1. OWNER has no contractual relations with 98%


OWNER has no influence on documents quality

20

RISKS and CONSEQUENCES:



Some documents are of poor quality

in English

21




Translation options:

EN RUFR

FR EN

a)

b)

FR RU

e.g. for EPC

For the Russian

participants

Double translation = double mistakes

EN RU

OR

22


3. OWNER, CLIENT and AUTHORITIES

receive over 90% of documents in translation,

not in original

- Dependence on the quality of translation

- Potential misunderstanding

23


4. Some Engineering input data exists in RU only

EPC can’t work without RU – EN translations

✓ Codes and Standards of RF

✓ Comments of Expertise Authorities

✓ PD package

✓ Requirements of RTN

✓ Certification for Equipment

…24


NOTE5. Translation is NOT included into the Project

Budget

6. Translation is NOT included into the Project

Schedule

7. Translation is NOT included into most of

the Contracts

8. QA/QC of translation is

NOT included into Budget or Schedule,

NOT required in Contracts

25


Budget

ANY expenses are planned

Attempts to buy at the cheapest price:

low quality + delays


26


Schedule

ALL Project schedules are affected

Attempts to save time:

low quality + extra “urgency” payments


27

7. Translation is NOT included into most of the

Contracts

NO ONE is contractually responsible


28

8. QA/QC of translation is

NOT included into Budget or Schedule,

NOT required in Contracts

Translation QA/QC is NOT PERFORMED


29

Translation of Main Consequences Injured party

Engineering documentation (Pre-FEED, FEED, DD…)

Missing Payment Milestones

Wrong technical solutions

Re-engineering

Discrepancies between PD and DD

Wrong equipment selected / purchase

Complications with obtaining approvals from the Authorities

Equipment is stuck at the Customs

Penalties

Delays in:

- Engineering

- Procurement

- Delivery

- Construction

- Commissioning

- Start-up

EPC

Client

Owner

Vendors

Codes and Standards


EPC

Client

Owner


Owner

Customs documentation * EPC

Client

Owner


PD EPC



EPCMeetings, MOMs

All parties involved

Comments, correspondence All parties involved 30

Translation impact: Delay

Translation of Main Consequences Injured party

Engineering documentation (Pre-FEED, FEED, DD…)

Misunderstanding

Multiple “Re-translations”

Very wrong technical solutions

Injuries / accidents at construction site and production

facilities

Wrong technical solutions

Re-engineering

Discrepancies between PD and DD

Wrong equipment selected / purchase

Complications with obtaining approvals from the Authorities

Equipment is stuck at the Customs

Penalties

Delays in:

- Engineering

- Procurement

- Delivery

- Construction

- Commissioning and Start-up

EPC

Client

Owner

Vendors

Codes and Standards


EPC

Client

Owner


Owner

Customs documentation * EPC

Client

Owner


PD EPC



EPCMeetings, MOMs

All parties involved

Comments, correspondence All parties involved

Translation impact: Wrong translation

31

⚫Missing Payment Milestones

⚫Wrong technical solutions

⚫Re-engineering

⚫Discrepancies between PD and DD

⚫Wrong equipment selected /

purchased

⚫Complications with obtaining

approvals from the Authorities

⚫Equipment is stuck at the Customs

⚫Penalties

⚫Delays in:

- Engineering

- Procurement

- Delivery

- Construction

- Commissioning

- Start-up

⚫Misunderstanding

⚫Multiple “Re-translation”

⚫Injuries / accidents at

construction site and

production facilities

32

Translation impact: Delay / Mistakes

Translation is delayed and / or wrong

ALL participants of the Project have

LOSSES in

time,

money

and reputation

Who pays at the end of the day?..33


Translation issues – why?!

Translation is not that complicated

Translation is not managed within Project Management

BUT

SO

There are no unified Project requirements on Translation

34

Translation impact – what can we do?

Translation is to be managed

in the same way

as any other Project Management component

35

Translation Management: steps towards success

✓ No unexpected expenses

✓ Translation duration is aligned

with the Project needs

Include Translation into Project

Budget and Schedule

36

Translation Management: steps to success

✓ Standardized approach to

Translation by ALL Project

participants

Introduce requirements on Translation

into ALL subcontracts

37

Establish Translation Management

– internal or outsourced

Translation Management: steps towards success

38

Translation Management

internal Translators

external Translation Agency

Professional

Translation

Management

Part of Project

Management

Team

39

WHAT to do WHY to do

Analyze the Contract Define contractual scope of work and

requirements on quality and deadlines

Analyze the internal needs of the Project Define overall scope of work, optimize the

schedule requirements

Study the internal processes of the Project

participants

Define of the optimal interaction strategy

Develop criteria for selection of Translation

Contractor

Ensure fulfillment of the Project needs

Define the soft- and hardware requirements for

translation activities

Ensure application of state-of-the art

technologies

Develop translation QA/QC requirements as per the

general Project requirements

Ensure application of the same QA/QC criteria

within the whole Project

Contractual work with Translation Contractor Consider the specifics of the translation industry

Vendor Management (Translation Contractor) Ensure correct tasks given to Translation

Contractor

40

Translation Management: main responsibilities

WHAT to do WHY to do

Perform QA/QC of the translations Proper quality of translations

Continuously optimize translation costs, quality and

duration

Optimal balance of costs / quality / duration

Control the budget and schedule No unexpected delays or expenses

Automation of internal processes Optimization of own capacities

Proactive interaction with the Project Real-time adjustments to the changing situation

Provide the required reporting to Project Management Increase awareness of Project Management

Perform coordination of internal activities

(Engineering) external activities (translation)

Alignment of schedules and requirements

Proactive optimize the translation workflows Further improvement

Implement Lessons Learnt, Lean Management, ect. Continuous optimization

41

Translation Management: main responsibilities

Translation Manager

ANY Discipline Project Manager

42

SAME functions

BUT

SPECIFIC sphere

⚫Missing Payment Milestones

⚫Wrong technical solutions

⚫ Re-engineering

⚫ Discrepancies between PD and DD

⚫Wrong equipment selected / purchased

⚫ Complications with obtaining approvals

from the Authorities

⚫ Equipment is stuck at the Customs

⚫ Penalties

⚫Delays in:

- Engineering

- Procurement

- Delivery

- Construction

- Commissioning

- Start-up

⚫Misunderstanding

⚫Multiple “Re-translation”

⚫Injuries / accidents at

construction site and

production facilities

Achieved

Optimized

Not requiredNo

Required

No

not

No

Schedule optimization

Not required

Achieved

Increased safety

43

Translation Management impact: Optimization

Simplified

• Finding optimal technical

solutions

• Obtaining approvals

Increased

• Documentation quality

• Communication quality

• Production and operational safety

• QA/QC implementation

Optimized

• Interaction with Vendors and

• Contractors

• Project schedule

• Meetings (amount, duration)

• Project workflows

Decreased

• General project costs

• Disagreements (contractual, technical, financial)

• Risks for the Owner

Automated

• Internal processes

• Document flow traceability

• Orders placement

• Costs calculation

44

Translation Management: Achieved results

• 97% reduction of Client claims

on RU documents quality

• 40% increase of translation capacity

without costs / time increase

• Savings on, up to

- Translation costs: 82%

- Project budget: 12%

• 100% Achieved Project Payment

milestones

(payment on timely submission and approval of RU

documentation)

• 20 – 95% Translation duration decrease

(depending on document type)

Scope of workBudget Schedule Quality

• 53% own capacity increase

• 86 audits performed• 0% Engineering schedule

disruption

• 14% reduction of Delivery

schedule disruption

45

Translation Management: Achieved results

Technical

solutions

Negotiations

ENGINEERINGSALES

Codes and Standards

implementation

Communication

Customs

documentation

Delivery

schedule

Engineering

schedule

Construction

activities schedule

Correspondence

Vendor

selection

Purchasing

of equipment

Transition between

Engineering stages

CONTRACTING

PROCUREMENTSUPPLY

AND


PROJECT

MANAGEMENT

START-UP

AND

COMMISSIONING

Meetings

Tests

3D Model

reviews

HAZOP

Acceptance

tests

QA/QC

P&ID

reviews

Author

supervision

Construction

coordination

Expediting

Negotiations

Contract

discussions

Technical

clarifications

Negotiations

Draft

contract

Hook-up and

assembly

Permits Allowances

Project

coordination

MOMs

ReportingPayment

milestones

Equipment

selection

Approvals

INTERNATIONAL

PROJECT

46

TRANSLATION

MANAGEMENT

With support of

Translation

Management

Optimization trick: optimize 1 process to optimize THE PROJECT

Vendor documentation package:

Documents come:

- from at least (!) 4 different sources (own documents, input data from EPC, Certification bodies, subcontractors / subvendors)

- in various languages

Documents are NOT aligned in ANY language

Documents are intended for:

- Customs (reads some, others are checked if provided)

- Owner (works with)

QA/QC performed by: nobody

Risks: get stuck at the Customs, impact on delivery and construction schedule, translation is done and paid several times, final documents are of low quality, potential damage of equipment and injuries / accidents during operation

Injured party: Plant Owner

Contractual responsibility: EPC ? 47

Parking lot

THANKS FOR YOUR ATTENTION !

Olga Gushchina,International Activities and Relations

Head of Department

Mobile: +49 170/9683464

E-mail: [email protected]

LinkedIn: https://www.linkedin.com/in/olga-gushchina-86bb30149/

Web: www.ts-engineering.ch

TS Engineering GmbH

mailto:[email protected]

https://www.linkedin.com/in/olga-gushchina-86bb30149/

http://www.ts-engineering.ch/