Ipa Fel 2 - Pac Introduction June 2011

Overview of FEL 2
and IPA Pacesetter

Evaluation
Presented to:
Saudi Aramco
Jorge Castaeda
& Mark Etchells
Date
21st June 2011
Confidentiality Statement
This document is the proprietary property of Independent Project
Analysis, Inc., which retains all copyright and other ownership rights
in its contents.
Information about the subject matter, content, and structure of this
document is confidential and proprietary.
Neither this document nor any such information may be disclosed to
any third party without the prior written consent of IPA and Saudi
Aramco except as expressly provided by the contract between IPA
and Saudi Aramco.
This document is not to be copied or distributed without
authorization.
Project File: SAR-1201-WKS

CONFIDENTIAL
INDEPENDENT PROJECT ANALYSIS
Outline
Introduction to IPA
Overview of Front-End Loading
IPAs Data Collection Process
CONFIDENTIAL
What We Do
In a typical year, IPA evaluates about 900 major
projects for companies around the world
We evaluate:
The quality and completeness of the business case and
commercial arrangements
The competitiveness of the project at the end of scope
development
The readiness of the project for sanction
The relative success of the project after startup
Occasionally, we look at projects mid-execution if they
are off in difficulty
CONFIDENTIAL
What We Do (contd.)
Over the past 20 years we have evaluated over 350
megaprojects and will evaluate over 40 this year alone
We develop a very complete technical and people
history of each project from front-end through early
operation
These histories become the data that we use to find
what works and what doesnt in capital projects
CONFIDENTIAL
IPA Works at Several Levels

Individual projects form the foundation of our work
Diagnosing (benchmarking) project systems
provides companies with the basis for improvement
Benchmarking Conferences bring companies

together to share practices and metrics
Research Studies help companies understand

unique project characteristics
Training programs help individuals understand

WHY specific practices are essential for success
CONFIDENTIAL
IPA Corporate Background

Founded in 1987 to provide a unique project research
capability for the chemical process, petroleum, and
minerals industries
Work and development evolved from 25 years of
development
Seven offices to globalize our database: U.S.A., United
Kingdom, The Netherlands, Australia, China,
Singapore, and Brazil
Devoted exclusively to the analysis of projects as a
field of empirical research
CONFIDENTIAL
Examples of Clients Represented in the IPA Databases

ABB Lummus
Abbott Laboratories
Abitibi-Consolidated
ADNOC
Agip KCO
AGRA Simons
AIOC
AIR Liquide
Air Products
AKZO Nobel
Alcan
Alcoa
Allegheny Industries
Alyeska
Anadarko
Anglo Platinum
Arkema
Army Corps of Engineers
AstraZeneca
Atlantic LNG
Australian Paper
AVR
AWE
Basell
BASF
Bayer
BC Hydro
Bechtel
BE&K
BG
BHP Billiton
Bluescope Steel
Bluewater
Borealis
Braskem
British Nuclear Group
CONFIDENTIAL
BP
Bristol-Myers Squibb
Caltex
Cargill Inc.
Chevron
Chevron Phillips Chemical
China Three Gorges Project
Development Corp.
Chiyoda
CITGO
Clark Refining & Marketing
CNRL
Codelco
Colonial Pipeline Company
Cominco
Condea Vista
ConocoPhillips
Copesul
CRI
CSR
CVRD
CYTEC
De Beers
Degussa
Department of Defense (US)
Dofasco
Dow Chemical Company
DowCorning
DSM
DuPont
Eastman Chemical Co.
Ecopetrol
Edison Company
Eli Lilly & Co.
Encana
Entergy
ExxonMobil
Falconbridge
Flint Hills
Florida Power & Light
Fluor Daniel
FMC Corporation
Foster Wheeler
Gaz De France
Genentech
General Electric
Georgia Pacific
GlaxoSmithKline
Hess Corporation
Hoffmann-La Roche
Honeywell
Husky Oil
Hydro
ICI
IMC Global
Incitec
Inland Paperboard & Packaging
International Paper
Invista
Iscor
Jacobs
JGC
Johnson & Johnson
Kellogg Brown & Root
Kimberly-Clark
Kinder Morgan
Koch Industries
Kodak
Kraft
Kvaerner
Kumba Iron Ore
Kuwait Natl Petroleum
LG Caltex
Lasmo
LTV Steel
Lukoil
Lundin Malaysia
Lyondell Citgo
Lyondell Equistar
Rohm & Haas

Malaysian Refining Co.
SABIC
Marathon Petroleum
Sanofi Pasteur
Marathon Oil
Santos
MeadWestvaco
SAPPI
Merck & Company, Inc.
Sasol
Methanex
Saudi Aramco
Motiva
Schering-Plough
Murphy Oil
SECCO
NAOC
Shell
NAVFAC
Solutia
Nederlandse Aardoilie Mj.
Solvay
Newmont Mining
Southern Company
Noranda
Southern Natural Gas
North Star Steel
Statoil
Nova Chemicals
Stepan
Novartis
Stone & Webster
Nycomed Amersham
Suncor Energy
Numico
Sunoco
Orica
Suzano Petroquimica
Origin Energy
Syncrude
Owens Corning
Tengiz Chevroil
Pacific Energy Partners
Tesoro
PDVSA
Total
PEMEX
Union Carbide Corp.
PEQUIVEN
Unocal
Petrobras
US Gypsum
Petrochina
US Steel
Petro-Canada
Petroleum Development OmanValero
Pfizer (formerly Pharmacia) Votorantim Metais
Wacker
Pillsbury
Wellman
Pioneer
Weyerhaeuser
Portland Pipeline
Woodside
Potlatch
Wyeth
Praxair
Xstrata
Procter & Gamble Co.
Qatar Petroleum Co.
Quimica Fluor
Repsol YPF
Rhodia
When does IPA get involved?

ERA
FRONT END LOADING
Business
Planning
Business
Study
FEL 1
Initiation
Business
&
Project
Team
Interface
Gate
Business Front End
Loading
Scope
Project
Development
Definition
Project
Proposal
FEL 3
DBSP
FEL 2
Gate
Pacesetter Project
Evaluation
Gate
Execution
Start-up
Phase
Handover
Prospective Project
Evaluation
Closeout Project
Evaluation
FEL Workshop (s)
Pacesetter project evaluation to set targets, identify Best Practices, and

quantify cost/schedule risks early
Authorization project evaluation when estimating data are available
Closeout after startup, but prior to team being reassigned
Operability after first year of operation
CONFIDENTIAL
Outline
Introduction to IPA
CONFIDENTIAL
10
Agenda
Front End Loading (FEL)

FEL 1
FEL 2
FEL 3
CONFIDENTIAL
11
What Is Front-End Loading?

This early planning work, or definition, is called
Front-End Loading (FEL)
FEL is the process by which a company develops
detailed definition of a capital project to meet
business objectives
During FEL these questions are answered:
CONFIDENTIAL
12
Basic Premise
Early in the project, you can influence the final
outcome of a project at a relatively low cost
Select the best projects
Eliminate the wrong projects
Select the best technology
Select the most appropriate scope of work
The work you do at the start of a project has a direct
effect on how well the project turns out
Better planning drives better outcomes
Best Practices help to drive down costs,
improve schedule, and improve predictability
CONFIDENTIAL
13
Cost Influence Curve

Most Influential Project Decisions Are Made Early
HIGH
100%
PROJECT DEVELOPMENT
& FRONT-END LOADING
DETAILED DESIGN
Relative
PROCUREMENT
Level of
CONSTRUCTION
Influence
COST
COST OF
OF THE
THE
PROJECT
PROJECT
COMMITTED
COMMITTED
Cumulative
STARTUP AND
OPERATIONS
Cost of the
Project
COST
COST
INFLUENCE
INFLUENCE
LOW
0%
START
CONFIDENTIAL
TIME
14
COMPLETE
Front-End Development Must

Progressively Narrow
Technology
&
Business
FEL 0
Concept
Evaluation
FEL 1
Business
Planning
FEL 2
FEL 3
Scope
Refine Scope &
Development Plan Execution
Phase 4
Execute
Ideas
Phase
Review
Go / No Go
Phase Review
Go / No Go
Phase Review
Go / No Go
Sanction
Go / No Go
Business
Decision
TIME
CONFIDENTIAL
15
Agenda
FEL 1 Business Planning

FEL 2
FEL 3
CONFIDENTIAL
16
Business Planning Phase

FEL 1
Objective: Validate the business opportunity

and select the alternatives that will be
analyzed in the next phase.
Leadership: Business function is responsible
for evaluating the potential project.
However, active involvement by technical
group and facility operations is critical.
Key Elements:
Recycle for More

Definition
Proceed to Facility
Planning Phase
This phase is often funded separately

Gate-1 Review
Opportunity Validation
Duration of the phase varies greatly

Minimal level of expenditure (0.5% TIC)
Ends with a formal gate review
Many ideas fade during this phase
Cancel or Shelve
CONFIDENTIAL
17
Business Planning Phase -- FEL 1

FRONT- END LOADING
BUSINESS &
PROJECT
TEAM
Business
Planning
Scope
Development
Project
Definition
Execution
Startup &
Operation
INTERFACE
DELIVERABLES
A business need or opportunity is
developed into a business case
If a formal process is followed, a set of

business deliverables is developed
The quality of this work is the most

important single predictor of eventual
business success of the project
CONFIDENTIAL
18
Market forecasts
Sales/capacity reconciliation
Competitive studies
Legal/environmental/OH&S
New technology content
Comparative cost estimates
Cost of Goods Sold (COGS)

requirements
Product market life

Business and Project Team Interface

FRONT- END LOADING
BUSINESS &
PROJECT
Business
Scope
TEAM
Planning
Development
Project
Definition
Execution
Startup &
Operation
INTERFACE
BUSINESS DELIVERABLES
Market forecasts
Sales/capacity reconciliation
Competitive studies
Legal/environmental/OH&S
New technology content
Comparative cost estimates
Cost of Goods Sold (COGS)

requirements
Product market life
CONFIDENTIAL
BUSINESS OBJECTIVES
STATEMENT
TO THE
PROJECT TEAM
19
Managing the Business/Engineering

Interface
Fully share the business case

Consider develop-to-cost.
Allow and encourage an extensive Q&A between the
business lead and the engineering core team
The successful management of the business/
engineering interface is an important predictor of
project business success
CONFIDENTIAL
20
Consequences of
Incomplete FEL 1 Deliverables
Ill-Defined
Business Case
CONFIDENTIAL
Multiple
Alternatives
Evaluated
Unable to
Reach Closure
by FEL 2 Gate
21
Do Not
Complete FEL 3
Work
Reduced
Competitiveness
Clear Business Opportunity Statement

The objective of FEL 2 is to find the best scope of
work for a given business opportunity
Task is easier if the business opportunity is defined
A clear business opportunity statement at end of
FEL 1 has three main elements:
1. A definition of what the business is trying to
accomplish with the project and why
2. Business objectives quantified in terms of targets
for production capability, cost of goods sold,
capital cost and schedule
3. A listing of constraints, risks, and the factors that
make the project more or less valuable
Each element is necessary to guide engineering

22
CONFIDENTIAL
decision making on scope
development INDEPENDENT PROJECT ANALYSIS
Better
Completeness of FEL 1 Deliverables

Drives FEL 2 Quality
Pr < 0.011
Worse
Percentage of Projects
Completing FEL 2
70%
60%
50%
40%
30%
20%
10%
0%
Complete
In Development
Little Work Done
Status of FEL 1 Deliverables at Start of FEL 2
CONFIDENTIAL
23
Agenda
FEL 1
FEL 2 Scope Development

FEL 3
CONFIDENTIAL
24
Scope Development Phase

FEL 2
Objective: To study identified options and

narrow the project to one option, refine
premises, update project economics, and
begin project definition.
Leadership: The project manager and project
team begin to take the lead during this
phase. However, business involvement is
active.
Recycle for More

Definition
Proceed to Project
Planning Phase
Key Elements:
Project manager is named at the start of the
phase and project team is formed
Costs are typically capitalized
Gate-2 Review
Selected Alternative
Validation
Moderate level of expenditure (1.5% TIC)

Ends with single option and formal gate
review that represents business approval
CONFIDENTIAL
25
Cancel or Shelve
Scope Development -- FEL 2

FRONT- END LOADING
Business
Planning
BUSINESS &
PROJECT
TEAM
INTERFACE
Project
Scope
Definition
Development
FEL 2 starts with and must be guided

by the Business Objectives Statement
The core team with continued

business involvement fashions a
scope that meets or exceeds the
business need
Business objectives are translated

into project objectives that are then
ratified by the business
CONFIDENTIAL
26
Execution
Startup &
Operation
DELIVERABLES
Economic evaluation of
alternative scopes/technologies
Site selection
Identification of auxiliary needs
Conceptual engineering
Flow sheets
Process hazards review
Budget-type estimates
Scope Development FEL 2

FRONT- END LOADING
Business
Planning
BUSINESS &
PROJECT
TEAM
INTERFACE
Project
Scope
Definition
Development
Execution
Startup &
Operation
PROJECT OBJECTIVES
Economic evaluation of
alternative scopes
Site selection
Identification of auxiliary needs
Conceptual engineering
Flow sheets
Process hazards review
Budget-type estimates
CONFIDENTIAL
PROJECT OBJECTIVES
STATEMENT
TO THE
BUSINESS
27
Three Key
Practices Facilitate Reaching FEL 2 Goals
KEY FEL 2 PRACTICES

Clearly defined business objectives and project
objectives
Reaching closure on project scope at the end of FEL 2
Project teams with adequate representation from key
stakeholders, especially business (integrated team)
CONFIDENTIAL
28
FEL 2 Best
Practices
Clear Objectives
Engineering
Definition
Integrated Teams
Base Cost Growth From FEL 2 to FEL 3
Completeness of PFDs Drives

Estimate Growth
+1 Std.
Mean
-1 Std.
70%
Pr<<0.05
0.05
Pr
60%
50%
40%
30%
20%
10%
0%
-10%
-20%
Complete PFDs
Preliminary PFDs
PFDs Started
Base Cost = cost estimate without contingency

CONFIDENTIAL
29
FEL Index
Components at Pacesetter (FEL 2)
Site
Factors
Site determined
Equipment block
layout identified
Preliminary soils and
hydrology data
collected
Environmental
permitting
requirements and
strategy identified
Health and safety
requirements and
strategy identified
CONFIDENTIAL
Project
Execution
Strategy
Engineering
Definition
Pacesetter
FEL
Basic process data

Execution strategies (not plans)
Feedstock/product
Design
properties
Procurement
H&MBs
Construction
Engineering tasks
Startup
Written scope
Contracting
Single set of PFDs
Team participants and roles
Sized major eqp. List
Integrated CPM schedule
Utility, infrastructure &
FEL 3
off-site requirements
Engineering
Analysis of existing eqp.
Procurement
Feasibility cost estimate
Construction (project +
Clear business objectives
turnaround)
Participation and buy-in of: FEL 3 plans (not strategies)
Operations
Contracting
Maintenance /
Long-lead procurement
turnaround
Resource requirements
Business
Clear project objectives
30
FEL Index & Status at End of FEL 2

FEL 3 Index Scale
3
4
Best
Good
Fair
7
Scope
Development
Complete
Fair
10
11
12
Screening Study
10
11
12
Poor
Scope Development
inScreening Study
Screening Study
Progress
Clear business and project objectives
Project objectives not established
Integrated team
Team being formed
Site conditions established
Site conditions assumed
HSE requirements incorporated in design
HSE requirements assumed
FEL 2 engineering complete
Multiple options being evaluated
Preliminary project execution planning
Target end date established
CONFIDENTIAL
31
The Criticality of FEL 2

Decisions driving cost and schedule competitiveness
and predictability are made in FEL 2
Starting FEL 3 without completing FEL 2 is root cause
of major problems:
Delays, recycle, and cancellation during Define stage
due to underestimates at end of Select stage
Projects that do not meet the business need after they
are put into operation
Projects that reach Best Practical FEL but do not have
commensurate cost and schedule outcomes; these
projects are at great risk of:
> Cost growth over Select stage estimate
> Design changes
CONFIDENTIAL
32
Goals for FEL 2

Closure at end of Select stage
Clearly articulated and aligned business and project
objectives
Integrated project team
Pre-Feasibility engineering must be complete
Reliable cost estimate to judge business case

robustness
Set competitive cost and schedule targets
And, there must be a reliable gatekeeping process at

end of Select, or system will not work
CONFIDENTIAL
33
Only 25 Percent of Projects

Use All Best Practices During FEL 2
Percentage of Projects
100%
80%
60%
40%
20%
0%
Clear
Objectives
CONFIDENTIAL
Integrated
Team
34
Complete
PFDs
Clear Objectives,
Integrated Team, &
Complete PFDs
Agenda
FEL 1
FEL 2
FEL 3 Project Planning Phase
CONFIDENTIAL
35
Project Planning Phase

FEL 3
Objective: Develop detailed scope, execution

plan, and cost estimate for the alternative
selected in the Facility Planning Phase
Leadership: The project team is the primary
leader of this phase. Active operations input
and business input also required.
Key Elements:
Work is focused on single selected option
Long-lead equipment orders often placed
with cancellation options
Early aspects of detailed design often started
Recycle for More

Definition
Proceed to Project
Execution Phase
Gate-3 Review
Execution
Authorization
Higher expenditure (3% to 5% TIC)

Ends with formal authorization at a final gate
review
CONFIDENTIAL
36
Cancel or Shelve
Project Definition -- FEL 3

FRONT- END LOADING
Business
Planning
BUSINESS &
PROJECT
TEAM
Scope
Project
Development
INTERFACE
Execution
Definition
Startup &
Operation
DELIVERABLES
Entry into FEL 3 should mark the end
of alternatives
No further scope changes should

occur
Expenditure rises quickly now
CONFIDENTIAL
37
P&IDs
Equipment specifications
Procurement plan
Execution plan
Preliminary arrangements
Detailed scopes of work
Schedule analysis
Authorization grade estimate

FEL Index
Components at Prospective (FEL 3)
FEL
Index
Site
Factors
Plot plans
Soils data
Environmental
permitting
Health & safety
requirements
CONFIDENTIAL
Engineering
Definition
Engineering tasks
Detailed scope
PFDs, H&MBs, P&IDs
One-line electrical
diagrams
Equipment specs
Cost estimate
Sign-off from:
Operations
Maintenance
Business
38
Project
Execution
Plan
Contracting strategy
Team participants & roles
Integrated schedule
Detailed
Critical path
Resource loading
Plans
Procurement
Commissioning/startup
Etc.
Elements of Capital Effectiveness

Business
Business
Strategy
Strategy
Technology
Strategy
Alignment of
Functions
Front-End
Loading
Use of Value
Improving Practices
Leading
Technology
Discipline & Continuity
Co
st
SAFETY
Executed
With
Minimum
Change
Optimal
Scope for
Business
Needs
Timely Involvement of
Contractors/Vendors
Key Leading Indicators

CONFIDENTIAL
Lo
w
Fast Cycle
Time
t
en y
l
l
it
ce
Ex rabil
e
Op
BETTER
IRR
Key Performance Indicators

39
How Do We Measure Team Development?

Team
Development
Index
(TDI)
Project
Objectives
Project
objectives:
- Documented
- Communicated
- Agreed to
Trade-offs clear
CONFIDENTIAL
Team
Composition
Integrated team
Key functions
represented:
- Business
- Ops/Maintenance
- Engineering
- Construction
- Etc.
40
Project
Implementation
Process
Roles &
Responsibilities
Team member
roles &
responsibilities:
- Defined
- Agreed to
Tasks identified
Risks identified,
analyzed, &
mitigated
Project
implementation
process in place
Applied
consistently on
all projects
Process
understood &
followed by team
How Do We Measure Project Controls?

PCI
Index
Estimating for
Control
Control During
Execution
Estimating and Scheduling

Methodology
basis of estimate and
contingency
level of cost detail for each
activity
Integration of cost and
schedule
Estimate Validation and Review
estimate review and
quantitative validation
owner cost knowledge
brought to review and
validation practices
CONFIDENTIAL
41
Measurement of Progress
extent that physical
progressing was performed
level of detail of
measurements for each cost
category
Reporting of Progress and
Status
frequency of reports
level of detail of progress
reports for each asset and
activity
Owner Participation in Project
Control
VIPs and Their Timing
VIPs
FEL 1
FEL 2
FEL 3
Business Planning/
Appraise
Scope Development/
Select Alternative
Project Planning/
Define
Phase 1
Phase 2
Phase 3
Execution
Phase 4
Operation
Phase 5
Customizing Standards
and Specifications
Waste
Minimization
Energy
Optimization
Process
Simplification
Classes of
Facility
Quality
Value
Engineering
Design-to-Capacity
Reliability Simulation
Predictive
Modeling
Maintenance
Technology
Selection
3D CAD
Constructability Reviews
Recommended Best Practical range is 40-60% use of applicable VIPs. Most benefit from VIP use is
derived for Projects achieving Good or better FEL Index rating at authorization.
CONFIDENTIAL
42
Better Team Development, FEL, and VIPs

Use Drive Cost Performance
Relative Capital Cost

(Industry Average = 1.0)
1.2
Poor to Good Team

Performance Range
Poor
1.1
Industry Average Cost
1.0
Good
0.9
FEL Improvement plus Good Team

Development and VIPs Use
0.8
Best Practical
3
CONFIDENTIAL
Good
Fair
6
FEL Rating
43
Poor
Screening
FEL Drives Project Cost and Schedule Performance

1.15
1.10
Cost
Index
1.05
1.00
0.95
0.90
0.85
1.15
OverBest
defined BEST
Practical
GOOD
Good
FAIR
Fair
Scope
POOR
Dev.
Complete
Scope
Screening
SCREENING
Dev.
in
Study
Progress
3 3.5 4 4.5 5 5.5FEL6Index6.5 7 7.5 8 8.5 9
1.10
Execution
Schedule
Index
1.05
1.00
0.95
0.90
0.85
OverBest
defined BEST
Practical
GOOD
Good
FAIR
Fair
Scope
Scope
Screening
Dev.
Dev.
in
POOR
SCREENING
Study
Complete
Progress
3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 8.5 9

FEL Index
CONFIDENTIAL
44
Outline
Introduction to IPA
CONFIDENTIAL
45
Project Team Interview
LEAD
ENGINEERS
Worksheet
General Information
MAINTENANCE
CONTRACTORS
PROJECT
MANAGER
Technical Characteristics
External Issues
OPERATIONS
Estimated & Actual Costs

and Schedule
COST/
SCHEDULE
ENGINEER
This is a single, group interview.

NOT a series of individual interviews.
CONFIDENTIAL
46
Typical IPA Data Collection Interview

Example 1 Day Agenda for Downstream Projects*
Introductions
Project Background, Drivers, Key Issues
Project History and Schedule
Technical Characteristics
Project Management & Safety Issues
Lunch
Project Definition (FEL)
Value Improving Practices
Cost & Controls Information
Other
Action Items
* Exact agenda may vary depending on team availability, project type, size, complexity and other defining
characteristics
CONFIDENTIAL
47
When filling in the workbook

If a section takes longer than 1 hour - youre doing too
much
The workbooks are generic - if a question doesnt apply,
dont be afraid to put - not applicable
If you dont understand a question - talk to the IPA
contact, your colleagues or leave it blank and it will be
covered during the interview.
If you dont have a document that matches what has been
suggested by IPA - bring what you have.
When filling out the workbooks
Be honest and truthful
Add explanation
CONFIDENTIAL
48
Key Data Collection Items Required by IPA*
Workbook (completed by team)

Project objectives letter /scope description
Risk management plan
Project organization chart
Block flow diagram, plot plans, P&IDs and equipment specs
Project execution plan (incl. native format project schedule files)
Authorization/Gate package
Authorization/Gate cost, schedule and operability estimates
Change log
Achieved cost, schedule and operability performance
Safety performance
Close out report / lessons learned workshop
* Other documents may be required. Additionally, some documents listed may not be applicable to certain
types of projects and/or at certain stages. For example, closeout data, including lessons learned reports
is only relevant for evaluations of completed projects
CONFIDENTIAL
49
What to Expect & When
Initial Coordination with Client/Project Team
Analyst Preparation
Project Evaluation Interview
Preliminary Analysis
Review Board
Preliminary Verbal Feedback to Team
Complete Analysis
Prepare Deliverable (Report or Presentation)
Edit/Review of Deliverable
Issue Draft Deliverable
Client Review & Comment
Issue Final
On site, face-to-face meeting
All data received + 1 week
All data received + 3-4 weeks
Within 2 weeks of team/IPA

review of draft document.
Cycle time to draft deliverable (Presentation or Report format) is approximately 3-4 weeks
after all data is submitted.
CONFIDENTIAL
50
Questions?
Please address any questions concerning the
analysis to:
Switchboard +31 (0)70 335 07 07
Fax +31 (0)70 335 06 42
E-mail jcastaneda@ipaglobal.com
metchells@ipaglobal.com
Independent Project Analysis, Inc.

Prinsenhof Building Prinses Margrietplantsoen 32 2595 BR The Hague
The Netherlands
Jorge Castaeda & Mark Etchells
CONFIDENTIAL
51
IPA Proprietary Databases

LSN
900+ projects
Agri-Nutrition-Food
Pharma-Health
Consumer Products
PROCESS PLANTS PES

12,000 + projects
350+ clients
Detailed histories of process
plant projects >$6MM
INFORMATION TECHNOLOGY
300+ projects; including
Applications Development,
Telecommunication, etc.
PES SMALL PROJECTS

5,000+ projects
Projects <$6MM from
process industries
INSTRUMENTATION & CONTROL

120+ projects
Automation, DCS, SCADA, etc.
MEGAPROJECTS
300+ projects
$Billion class projects, all types
UPSTREAM PES
1,100+ projects
Petroleum production
platform worldwide
HAZRISK
400+ projects
Environmental assessments and
cleanups
PIPELINES
800+ projects
Pipelines, terminals, booster stations, etc.
POWER PLANTS
150+ projects
Single or combined cycle plants
CONFIDENTIAL
52

Ipa Fel 2 - Pac Introduction June 2011

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Ipa Fel 2 - Pac Introduction June 2011

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Overview of FEL 2

and IPA Pacesetter

Project File: SAR-1201-WKS

INDEPENDENT PROJECT ANALYSIS

IPAs Data Collection Process

INDEPENDENT PROJECT ANALYSIS

INDEPENDENT PROJECT ANALYSIS

INDEPENDENT PROJECT ANALYSIS

IPA Works at Several Levels

Benchmarking Conferences bring companies

Research Studies help companies understand

Training programs help individuals understand

INDEPENDENT PROJECT ANALYSIS

IPA Corporate Background

INDEPENDENT PROJECT ANALYSIS

Examples of Clients Represented in the IPA Databases

Rohm & Haas

When does IPA get involved?

FEL Workshop (s)

Pacesetter project evaluation to set targets, identify Best Practices, and

INDEPENDENT PROJECT ANALYSIS

IPAs Data Collection Process

INDEPENDENT PROJECT ANALYSIS

Front End Loading (FEL)

INDEPENDENT PROJECT ANALYSIS

What Is Front-End Loading?

INDEPENDENT PROJECT ANALYSIS

INDEPENDENT PROJECT ANALYSIS

Cost Influence Curve

INDEPENDENT PROJECT ANALYSIS

Front-End Development Must

INDEPENDENT PROJECT ANALYSIS

FEL 1 Business Planning

INDEPENDENT PROJECT ANALYSIS

Business Planning Phase

Objective: Validate the business opportunity

Recycle for More

This phase is often funded separately

Duration of the phase varies greatly

INDEPENDENT PROJECT ANALYSIS

Business Planning Phase -- FEL 1

If a formal process is followed, a set of

The quality of this work is the most

New technology content

Comparative cost estimates

Cost of Goods Sold (COGS)

Product market life

Business and Project Team Interface

New technology content

Comparative cost estimates

Cost of Goods Sold (COGS)

Product market life

INDEPENDENT PROJECT ANALYSIS

Managing the Business/Engineering

Fully share the business case

INDEPENDENT PROJECT ANALYSIS

INDEPENDENT PROJECT ANALYSIS

Clear Business Opportunity Statement

Each element is necessary to guide engineering

Completeness of FEL 1 Deliverables

Little Work Done

Status of FEL 1 Deliverables at Start of FEL 2

INDEPENDENT PROJECT ANALYSIS