Case Study: Saudiaramco Gas Project

 Case Study: Saudiaramco Gas Job Essay

PMI® Case Study

SAUDI ARAMCO HARADH GAS PROJECT:

2004 PROJECT MANAGEMENT INSTITUTE Project with the Year

Saudi Arabia's growing economy needs energy to offer the home industry as well as the kingdom's nationwide electric power generating plants. Although oil can be abundant, better utilization of Saudi Arabia's gas resources for these domestic uses would discharge oil for export. Qualifications

In 2000, Saudi Arabia's total gas sales totaled 3. being unfaithful billion standard cubic feet each day (SCFD), nevertheless were forecast to expand to 8. 6th billion SCFD by 2009. New development capacity was needed fast. In 1999, Saudi Aramco provided the green lumination for an estimated $2 billion dollars investment inside the Haradh Gas Project.

Challenges

Haradh would cover almost all of the eastern province of Arab saudi, and mail gas to customers in central Arab saudi and the capital of Riyadh, 300 kilometers away. The site of the digesting plant was barren wasteland, 180 kilometers from the nearest outpost of civilization, and 10 kilometers from the local road. Summer season temperatures often reach 52 degrees C.

The plant required raw materials: 87 gas wells will tap the resource from the desert, and 680 kilometers of pipe would bring it to the plant from 3 different fields. Turning uncooked gas in a commercial product also needs high voltage electrical power, which engaged constructing substations and running hundreds of miles of lines out to the gas areas.

Perhaps most crucial, the plant needed people. A permanent city—a online oasis inside the desert—would present housing and recreation pertaining to the 1, 000 employees and technicians. Due to its distant location, people and materials would have to be airlifted, requiring construction of an 8, 000-foot airstrip qualified to property a Boeing 737.

Finally, the processed gas and liquid hydrocarbons would reach the market by way of 395 miles of cross country pipeline.

Alternatives

Company professionals cite the first contracting file, which defined the mix of contracts perfect to accomplish the project objectives, as a step to the project's success. Whenever they received the award, each contractor designed a detailed delivery plan explaining in detail that they would incorporate work beneath engineering,

purchase and structure phases, and manage interfacing with other technicians.

Integrating the objectives of project supervision at the construction agency, with the functions staff as the " owner” with the project, was the driving idea in selecting the job team. In order to avoid these disputes, project technicians worked with grow operations and maintenance being a single crew from the beginning through start-up. With agreement around the teams, the project was fast-tracked from the beginning. The Haradh Team chose to institute a " Actually zero Change Coverage, ” very cold the design method at three months before initiation. Schedules and costs started to fall, (all for the better) and kept slipping through the job.

The job employed a Lump Sum Turn Key (LSTK) contracting

package philosophy. LSTK gave huge autonomy towards the

individual companies to achieve their objectives, and set tremendous responsibility on the task team to pay attention to the areas in which the contractors' function dovetailed in other contractors' work. This kind of led to concentration on preventing problems early, and developing or perhaps implementing work-around plans, if perhaps needed.

The detailed systems outlined inside the LSTK agreements were intended for scheduling, improvement measurement, evaluation and control, but were organized to fit Saudi Aramco's code of accounts for month-to-month invoicing and reporting. These kinds of in-house controls created a high level of financing and expenditure control. Month to month cost and schedule information were brought to lower level supervision and an overview was brought to the highest numbers of management. Everyone was kept in the loop.

By effectively defining the scope from the project early on, and then managing changes thoroughly, costs had been rigorously controlled and change purchases amounted to less than installment payments on your..

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