Impendium Consulting was engaged by INPEX to provide Independent Estimating Services to the Pre Developments Group and more specifically future development Projects. As the project team developed and reviewed various concepts our team provided independent cost estimating support to assist in the refinement of potential solutions for INPEX. Our team has interfaced with stakeholders from Engineering Service Providers to joint venture participants providing valuable insights and practical solutions across the various concepts.
Scarborough is a natural gas resource in Western Australia that will play a key role in helping neighbouring Asian countries to take action on emissions reduction and meet increasing energy demand. The Scarborough field is located in the Carnarvon Basin, approximately 375 km off the Pilbara coast of Western Australia. The Scarborough gas resource will be developed through new Floating Production Unit (FPU) connected by an approximately 430 km pipeline to a second LNG train (Pluto Train 2) at the existing Pluto LNG onshore facility.
Client’s Requirements
To manage the risk between a Lump Sum EPC turnkey contract and a fully reimbursable EPCM contract for the FPU facility Woodside required a contracting structure that provided a sharing of risk between the parties. This required the development of Schedule of Rates for the procurement and fabrication of the FPU facility. Our background in Quantity Surveying and experience in the development of Schedule of Rates for large offshore facilities provided Woodside the confidence that the cost and design risk was shared between the Contractor and Woodside.
Impendium’s Contribution
In the pre FID phase our experience was to provide independent cost estimates and assurance to contractors’ costs and quantity information during both the pre-FEED and FEED phases of the project. The information and independent advice provided ensured Woodside could make informed decisions around current and future cost considerations.
Post sanction IMPENDIUM was engaged to convert elements of McDermotts contract for the fabrication of the FPU from Schedule of Rates to Lump Sum. This involved the agreement of final quantities, the agreement of new items and the negotiation of ‘star’ rates.
Professional Diligence
IMPENDIUM provided independent advice and opinion regarding elements of McDermotts EPC contract providing Woodside with a strong position when negotiating the close out.
HanRoy (Company) is currently developing Atlas Irons’s wholly owned Ridley Magnetite Project, located approximately 57 km east of Port Hedland, in the Pardoo Project Area. The Ridley Magnetite Project (Stage 1) will export Direct Shipping Ore (DSO) via a road train fleet, to an existing export facility in Port Hedland. Once fully developed, the Project will produce 16.5 Mtpa DSO, transported via a Concentrate / Slurry Pipeline to a handling facility to be developed in Port Hedland, before export via existing loading berths. Base Case cost estimate for the Stage 1 plant capacity was to produce 3Mtpa (dry) magnetite concentrate, over nominal 6-year life of mine (Stage 1 only). Design was inclusive of process plant, non-process infrastructure and a product storage/reclaim facility at Port Hedland. Mining will be performed on a contract basis and would report to the OPEX costs.
Client’s Requirements
The initial overarching approach to execution procurement considered delivery by a small number of large EPC contracts, with cost estimates developed accordingly. Upon further assessment it was determined that a traditional EPC approach was unlikely to present best value for money, with costs considerably higher than anticipated which may be partly due to the highly complex nature of magnetite processing and uncertainty of the mine ore resource. The Study proposed an alternative execution methodology based on execution managed by a skilful Owner’s team, down to the individual package level where practicable, utilising an array of tier one to tier three contractor resources and expertise. The CAPEX, SUSSEX and OPEX were reviewed and developed to reflect this new execution methodology.
Impendium’s Contribution
IMPEDNIUM’s scope involved liaising with the study team to develop the EPC execution methodology to a Self-managed execution methodology reflecting the cost in the CAPEX, SUSSEX and OPEX.
Activities Included:
Professional Diligence
IMPEDNIUM assisted HanRoy by carrying out a detailed review of the third-party EPC estimate, making sure all aspects of the estimate had a validated audit trail and solid basis prior to development into the new execution methodology. We assessed and provided feedback on the study deliverables using the AACEI Class Assessment Tool. The tool was modified to include added integrated project plan information and test work, weightings were applied to the information, traffic light system applied, and a corrective action register was developed. Management of the new information was key to ensuring the calibre of the estimate, each line item in the estimate was coded with a quantity, cost bases and source document number. The development and review of the estimate was monitored from several aspects including total cost increase (labour, plant, material ratios) and resulting scope change, discipline rates and norms and unit costs comparison / benchmark.
AGIG propose to design, construct, and operate a transmission pipeline for a multi-user CCS hub in the Pilbara region of Western Australia. In its current form the project scope is centred on the provision of a new, dedicated CO₂ pipeline linking emission sources to onshore receipt for a third party to then sequester in an offshore depleted reservoir. The pipeline would initially service one of two routes:
In the project’s early phases, up to 5 mtpa of CO2 will be collected from facilities in the Pilbara, and AGIG’s project partners are working towards commercial agreement with these parties. Primarily targeting the emissions from Yara, Perdaman and Pluto, the Pipeline to Devil Creek will also facilitate transportation of emissions from power generation in Karratha and future industries in the Maitland SIA.
Client’s Requirements
AGIG had recently secured government funding in support of the project and as part of that process were required to submit a Business Case, under a tight timeline of 2 weeks from the start of the engagement with Impendium.
Contents of the Business Case:
AGIG required experience and competency resources to deliver the Business Case in the time required.
Impendium’s Contribution
Impendium worked with the AGIG team to review and coordinate input and draft the actual Business Case document ready for CEO review within a week, to allow for internal review and approval processes prior to submitting to government. Impendium relied on it’s own internal knowledge of project management processes and tools commensurate with developing complex projects such as CCS, to produced such industry standard tools as Project Roadmaps, Schedules and Risk Charts.
Professional Diligence
A comprehensive Business Case was developed that met the requirements of AGIG and satisfied the government criteria for funding; and was delivered within the timeline requested. This Business Case was then submitted to the government as required and laid the foundation for the future Business Plan.
