ENGINEERING AND CONSTRUCTION
MANAGING SMALL PROJECTS IS THE ESSENCE
OF ENGINEERING AND CONSTRUCTION
R. ELSHOUT, Energy Systems Engineering, Pasadena, California and D. CARAVAGGIO, Consultant, Newport Beach, California
Refineries and petrochemical com-
panies execute a wide range of projects.
These projects may include maintenance
projects, facility upgrades, retrofits and
revamps, and debottlenecks. Some proj-
ects are done in-house, while others are
contracted out. Each project requires its
own approach to ensure efficiency and
cost-effectiveness.
Grassroots projects tend to be ex-
ecuted by large task force teams that are
only concerned with completing a single
major project at a time. Grassroots facil-
ity builds are mostly a thing of the past,
as costs and permitting have become pro-
hibitive. Assembling a team to execute a
single project is much easier than com-
pleting small projects of various sizes.
Size, complexity, schedule duration and
costs are the determinants in the type of
project execution management and team
that is assembled. Although similar ac-
tivities are performed on both small and
major projects, small projects tend to use
different resources.
Small projects use a team of multiple
discipline specialists. Typically, mul-
tiple activities must be executed by each
team member, who would be working on
more than one project at any time. The
team should be multiple-disciplined and
include:
• Project manager/project engineer
• Process engineer/mechanical
process engineer
• Electrical/instrumentation
engineer
• Civil/structural engineer
• Mechanical engineers who have the
capabilities to design vessels, heat
exchangers, rotating equipment
(pumps and compressors)
• Piping designer who can also do
plant layouts and pipe routing
• Cost engineers/cost controls/cost
estimating
• Scheduling/overall controls
• Purchasing/expediting/inspection
• Constructability coordinator.
E–52 ENGINEERING AND CONSTRUCTION | MAY 2017 | HydrocarbonProcessing.com
A typical organizational structure for
small projects should have minimal layers
to allow a short line of communication be-
tween the decision-makers (FIG. 1). The
characteristics of a small project include:
• Short duration—small projects
tend to have a maximum length
of 1 yr. This timetable
requires that procurement
activities are executed early to
obtain the necessary equipment
onsite when it is needed.
• Personal characteristics require
stronger multi-purpose discipline
leads who keep communication
lines open and the workflow
moving through the system.
• The cost of small projects
may range from a few
hundred thousand dollars
up to $50 MM.
• Project personnel must manage
multiple activities simultaneously.
• The controls of the project are
much simpler, but it is important
that no activities are missed.
Since multiple projects are
completed by the same group,
activities are usually not all in the
same time reference.
Cost-effectiveness. Cost overruns on
small projects as a percentage of individual
budgets are typically higher. Management
control is usually the most common rea-
son, but the definition of the project often
changes dramatically from the initial esti-
mated scope of work, as well. During proj-
ect execution, it is common for the scope
to change. To control costs, firm project
management is crucial. Both the owner’s
representative and project manager must
be disciplined in what gets added to the
initial scope, or the project could suffer a
major cost overrun.
Forming engineering alliances. The
operator’s best use of resources is spent
to maintain the optimum performance
and profits of the facility. Supplanting
themselves into design and engineering
activities—other than providing direc-
tion—is not in the best interest of the
operating company. The operator’s role
in small projects should be limited to the
definition of the projects, and review-
ing the execution of the project by the
selected engineering and construction
(EnC) contractors.
Onsite activities. The onsite team needs
to gather the following information before
starting work:
• A 24 hr–72 hr test run,
with a closed material
balance approximating the
proposed/planned operation
• Process flow diagrams (PFDs),
utility flow diagrams (UFDs),
up-to-date piping and
instrumentation diagrams
(P&IDs)
• Equipment data sheets (must
include modifications), plot plans,
elevation drawings (if available)
• Operation and repair records over
the last 10 yr
• Lead operator’s knowledge of
limitations—the lead process
engineer should be included in
these meetings
• Identification of the possible
tie-in locations.
Offsite activities. First, the records and
information obtained need to be docu-
mented. This action could be included
as part of the kickoff meeting notes. The
owner should be kept aware of engineer-
ing activities, and should be updated peri-
odically to mitigate rework.
A win-win situation. The engineering-
alliance concept provides better execution
than the previous practice of the owner
selecting a new contractor for each new
project. The engineering-alliance con-
cept can be a win-win situation for both

the owner and the contractor. It is best
for the contractor to keep a core team of
dedicated personnel who know what the
clients’ requirements are and how to meet
the client’s standards. Client needs are
also best served with a project team that
is dedicated to their long-term objectives.
Relationships and trust can be developed
between the client and the contractor only
when staffing is stable. The client does not
want the engineering contractor to use his
project as a place to park engineers and
designers between other major projects.
Engineering contractors operate with very
low overheads. The contractor must keep
a dedicated core of personnel. The present
contractor staffing policy (to keep over-
head low) is to put the engineering staff
member on leave of absence once they
become unbillable.
PROJECT EXECUTION
Project execution is the key to a suc-
cessful project. Typically, projects are
undertaken on either an engineering,
purchasing and construction manage-
ment (EPCM) or engineering, procure-
ment, construction (EPC) basis. Either
way, certain activities must be executed
in a prescribed sequence. Avoiding re-
work is the key. Getting it done right the
first time is essential to staying within
budget and schedule.
The EPCM approach requires the
engineering contractor to assemble bid
packages for the construction contractors
to execute. The better the definition, the
better the scope the contractor has to bid.
The EPC approach uses one con-
tractor to do both the engineering and
construction work. The EPC contractor
should still provide cost estimates to the
owner for approval before starting con-
struction. To avoid surprises, accurate
cost estimating is a key activity. When
costs exceed the client’s expectations, it
may be necessary to re-engineer parts of
the project to provide a more cost-effec-
tive approach that satisfies the owner’s
expectations.
For example, a refinery crude unit
debottlenecking project was executed
as one of many other projects simulta-
neously. The scope of the project was
to complete a front-end evaluation and
determine how to cost-effectively debot-
tleneck an existing unit. The project was
based on adding light tight oil (LTO) to
the refinery’s crude mix; therefore, the
ENGINEERING AND CONSTRUCTION
Base Case heat and material balances
could not be scaled up. The work was
to determine the limiting capacity, and
then perform factor-type (equipment
cost multiplied by factors) to estimate
the debottleneck cost. Finally, the team
put together a Schedule “A” debottleneck
package for the detailed engineer/con-
structor to bid.
Responsibility matrix. Ultimately, exe-
cution must be broken down to several
items as part of the responsibility matrix.
The activities executed by the different
disciplines are identifiable and quantifi-
able items in the responsibility matrix.
The project manager can check these
items as the project progresses through
the EPC phase.
Regarding the example, three cases
are evaluated and compared to the Base
Case (present operation). The scope
includes performing a cost estimate of
the three cases and developing a single
Schedule “A” design package for a de-
tailed EnC contractor to execute.
This project was executed in parallel
with several other ongoing projects by the
small projects group. The project required
certain specialists—mechanical special-
ists for heat exchangers, pumps, furnaces,
piping, civil/structural, etc.—for short
periods of time. The 24-wk bid package
schedule included several “pause” periods
to allow the owner to approve the proj-
ect’s approach, for the vendors to bid on
equipment, and for the owner to issue bid
packages to detailed EnC companies.
It is believed that using a small-project
manager to conduct the study and devel-
op the project is preferred over the final
engineer/constructor. For example, if the
project is bid on a fixed price, the detailed
engineer can custom-design the scope to
fit the bid package. The constructor can
Licensors
Vendors
Process/mechanical Electrical/
process lead instrumentation lead
FIG. 1. Organizational chart for a typical small project.
HYDROCARBON PROCESSING | MAY 2017 | ENGINEERING AND CONSTRUCTION
then use this package to bid on the proj-
ect. This workflow eliminates the three-
step approach, and can potentially add
considerable savings to the project’s cost.
If we revert to the responsibility ma-
trix, the process and project leads start
by conducting a kickoff meeting. The
project teams will then gather the nec-
essary documents required to execute
the project, and develop a preliminary
schedule. The process team takes test-
run data and processes it through a simu-
lator program to develop the Base Case
heat and material balance. The process
and equipment engineers use the heat
and materials balance data to evaluate
the individual equipment items to de-
termine which pieces of equipment are
limiting and how much extra capacity
is available for expansion. The process
engineers will then establish expansion
cases (e.g., 105% of Base Case, etc.) for
an evaluation plan. Next, the process
and equipment engineers will evaluate
the existing equipment and determine
which pieces of equipment need to be re-
placed, modified or supplemented with
additional equipment.
The mechanical process team will
conduct a hydraulic evaluation to de-
termine—for the various cases—what
piping needs to be modified and what
pumps can be reutilized. New pumps
may be required in some situations, but
staying with the same frame size can re-
use a foundation. Vessel engineers de-
termine the modifications that may be
needed, such as new internals, trays, etc.
Original tray suppliers can be very useful
in evaluating tray performance, and can
suggest modifications or replacements,
where needed.
Heat transfer engineers evaluate the
requirements of heat exchangers in the
new services. Individual exchangers can
Project manager Client’s staff
Support staff
Civil/structural Mechanical Piping/layout Cost engineering
lead lead lead lead
Engineers/designers
E–53
 ENGINEERING AND CONSTRUCTION

be rated again in the new services by the
exchanger rating models that are includ-
ed. Then, the mechanical process engi-
neer can mark up the existing P&IDs to
show the modifications required and the
new equipment that needs to be added
to accommodate the higher capacity
cases. The plot plan should be marked
to show where new equipment needs to
be added, or where existing equipment
needs to be removed, as well. Piping
modifications and/or new piping addi-
tions should be marked on the elevation
drawings, if available.
Equipment data sheets—vessels,
drums, distillation columns, etc.—need
to be marked to show required modifica-
tions. New equipment data sheets must
be prepared and issued to vendors for
quotes. The vendor will need sufficient
time to provide an accurate quote. Costs
in the modified specifications sheets
should be estimated by either the vessel
group or by a fabricator.
Once these steps are completed, the
process and project engineers can assem-
ble the full scope of the debottlenecking
project. Piping engineers can mark modi-
fications on the existing plot plans and
elevation drawings—showing the tie-in
to the existing equipment and preparing
a tie-in list can be useful at this point.
Next, a factor cost estimate is prepared
(equipment price multiplied by a factor
to get estimated cost—pump cost multi-
plied by 4, vessels multiplied by 3, etc.).
These three estimates (one for each case)
are based on prices for the new equip-
ment and modifications to the existing
equipment. A conceptual cost estimator
is key to getting a reasonable inside bat-
tery limits (ISBL) cost estimate, with
approximately +50%/–25% accuracy.
The outside battery limits (OSBL) cost
equates to a percentage of ISBL costs
(usually a minimum of 50%). OSBL costs
are associated with things not shown on
the P&IDs, such as utilities and offsites.
An evaluation of the three cases can
now be made to calculate a simple pay-
out evaluation. The incremental rev-
enues—based on gate-product pricing,
utilities and operating labor—are com-
pared for the three cases vs the operation
Base Case (reference case). The selected
case can be used to prepare a Schedule
“A” debottleneck package. The descrip-
tion and job scope, supplemented with
all the developed attachments, can be
organized into a bid package. The bid
package can then be bid on by detailed
EnC contractors. With this level of detail
provided in the bid package, the bidders’
packages should be comparable on an
apples-to-apples basis.
Turnaround schedules drive the overall
schedule. Small projects must be exe-
cuted so that they fit into the turnaround
schedule and shutdown period. Refin-
eries and petrochemical facilities have
scheduled turnaround periods, where the
plant is shut down for a schedule period
to perform maintenance. This period
is ideal for small projects to tie-in their
modifications.
Usually, the contractor tries to execute
as much work as possible ahead of the
turnaround shutdown. Pre-shutdown
work consists of:
• Excavating and pouring
foundations
• Installing equipment on the
foundations

TABLE 1. Gantt chart schedule for the front-end package

Weeks from kickoff meeting

Activity 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Kickoff meeting
Gather data at the site
Simulate heat/material balances
for Base Case
Evaluate equipment for Base Case
Simulate expansion cases
Check/rate existing equipment
Issue data sheets to vendors
for quotes
Vendor evaluation/quote
PFD markup
Hydraulic calculations
(pumps/compressors)
P&ID markup
Pipe routing and tie-in locations list
Markup of plot plan
Update equipment list
Electrical modifications
Cost estimates for three cases
Economics and selection of final case
Prepare project description/
assemble Schedule “A” package
Issue detailed EnC package to bid

E–54 ENGINEERING AND CONSTRUCTION | MAY 2017 | HydrocarbonProcessing.com


• Running piping between the
newly installed equipment
back to the tie-in points
• Running electrical back to the
electrical tie-in point, which is
usually an electrical panel or
junction box. The final electrical
connection can only be made
safely at shutdown.
Equipment and materials must be
delivered to the construction site in ad-
vance of when the work is to be complet-
ed. This schedule allows the pre-turn-
around activities to be completed ahead
of the shutdown.
In some instances, the turnaround tie-
ins are completed during the turnaround,
and the actual completion of the proj-
ect is carried out later. Therefore, tie-in
points need to be identified and stubbed
in with an isolation block valve, where
possible. This action requires planning
to validate that all tie-ins are installed and
can be connected into the modification
when they are completed.
Once again, piping activities are usu-
ally the key to meeting the schedule. It is
essential that someone from the owner’s
operating group confirms that the tie-in
locations are correct.
Safety concerns. Safety is the most impor-
tant concern of all refinery and petrochem-
ical projects. A good project can turn bad
with just one accident. Following the own-
er’s project execution manual is essential
during the construction phase. Some of the
owner’s requirements include obtaining
construction permits, which requires fill-
ing in approval documents in a timely man-
ner so that safety concerns are addressed.
Scaffolding design and support con-
siderations are a must before construction
begins. Safe welding practices, along with
using the correct welding procedures for
the appropriate metallurgy, can prevent
having to redo entire sections of construc-
tion. This rework might have to be done at
the contractor’s expense due to fault.
Safe-trench supports are required to
hold back soil (to prevent cave-ins) if
an underground piping run is to be fab-
ricated. Any work below a certain level
requires supporting the side walls of the
construction trench.
Electrical isolation is an area where
there can be no compromises. The opera-
tions team can best determine how to en-
sure that electrical components are isolat-
ENGINEERING AND CONSTRUCTION
ed. Lockout procedures must be followed
and double-checked to protect workers.
Fire concerns are another major safety is-
sue. Welding procedures must address the
need to provide isolation from potential
fire situations, including liquid hydrocar-
bons and other combustible materials.
Constructability. During the kickoff
meeting, spaces available to add new
pieces of equipment are determined. How
will new equipment be transported to the
proposed site location and installed on
the foundation? The plot plan and the
elevation drawings are useful for this
assessment. Typically, there are open
spots for new exchangers and pumps, as
well as open areas in the structure if more
space is required.
The pipe rack should be evaluated to
determine if open lanes for adding new
pipe runs are available. Otherwise, an-
other level may need to be added to the
pipe rack. Sometimes, extensions on
each side of the pipe rack can be added.
However, structural engineering must be
used to evaluate these potentials.
Utilities, primarily cooling water,
steam and condensate additions, may be
required. Water coolers at the extreme
end of the cooling water circulation
system tend to be starved if the cooling
water system is overloaded. A booster
pump may need to be added to provide
the additional flow to the new exchang-
ers. Steam and condensate systems must
be evaluated for extra capacity. New,
larger headers may be required. There-
fore, the OSBL modification costs must
be added to the cost estimate.
A laydown area adjacent to the work
area should be created to store equip-
ment as it comes onsite. Major equip-
ment can be transferred from the deliv-
ery truck directly to the foundation, if it
is pre-poured and cured.
Project deliverables. Deliverables are
usually included in all projects. The
contractor will provide these in a timely
manner. It is useful to have the owner
review these deliverables to confirm that
they are in accordance with the project’s
execution. Typical small-project deliver-
ables include:
• A descriptive narrative of the
project’s scope
• A printout of the heat and material
balance for the final case
HYDROCARBON PROCESSING | MAY 2017 | ENGINEERING AND CONSTRUCTION
• Modified PFDs, P&IDs, plot plan
(as built), and piping isometrics
and orthographics
• Tie-in list, and equipment list
showing new and modified
equipment
• Modified utility drawings,
new/modified equipment data
sheets, foundation drawings
• Revised electrical drawings,
including additions and
changes (as built)
• New electrical specifications,
an equipment list showing
new instrumentation (as built),
along with new instrumentation
data sheets.
This narrative was the beginning of
the project Schedule “A” debottleneck
bid package example that was issued to
the detailed EnC.
COMMUNICATIONS
Project contract. The contract is where
the rubber meets the road, and it provides
an understanding of what the contrac-
tor is expected to ultimately deliver. The
contract should be considered a guide-
line. Again, good alliances are based on
the owner and the contractor working
together as a team. The development of
an adversarial relationship does not facili-
tate the work.
It is extremely important to have a
project description, an equipment list
that matches the process flow diagrams,
P&IDs and equipment data sheets early
in the project.
Equipment lists provide the basic
equipment titles and numbers. Equip-
ment numbering sequences can provide
insight as to how the project is progress-
ing. Note: In revamps and debottle-
necks, certain equipment is reused in
the same service, along with additional
equipment to do more than what the
original equipment can perform. This
action requires a number indicating that
the equipment is new, but in the same
service as an existing item.
The key to successful and cost-effec-
tive revamps in debottlenecks is making
the maximum use of existing equipment.
However, certain equipment may not
fit the new plan and should be removed
from service. It is important for the cost
estimator to be aware of when items are
removed. Frequently, cost estimate over-
E–55
 ENGINEERING AND CONSTRUCTION
runs occur when an element has not been
identified—e.g., when equipment is dis-
posed of and not recorded.
Another aspect of cost-effective re-
vamps and debottlenecks is to make
maximum reuse of the existing support
in ISBL and OSBL, such as foundations,
electrical supply and utilities. Typically,
the cost for the OSBL required to sup-
port a revamp is at least 50% of the ISBL
cost. Anything that can be done to mini-
mize the effect of ISBL modifications on
OSBL modifications, can keep the OSBL
costs under this figure.
Project planning. This operation is a
joint activity between the owner and the
contractor. Planning between the owner
and contractor includes:
• Scope definition.
• Schedule and associated costs.
• Work breakdown structure
(WBS)—this plan provides the
activities of the project down to
the level of execution over time
periods.
• Schedule—it drives the project,
and defines the critical path of
when various activities should be
executed. The critical path must
Arabian heavy Wash
crude water
Preflash
drum
Cold Desalter
preheat
exchangers
Desalted
crude
exchangers Reduced
crude
exchangers
FIG. 2. Simplified process schematic of the crude unit debottleneck project.
E–56 ENGINEERING AND CONSTRUCTION | MAY 2017 | HydrocarbonProcessing.com
consider the time requirement in provide sufficient information
procuring equipment. Typically, for a detailed engineering
the procurement schedule contractor to bid on procurement
requires time for equipment and construction management.
specifications to be issued, and
time for vendors to perform their Project schedule. Project scheduling
bids and fabricate and ship the can be performed on many levels. The
equipment to the field. simplest is a bar chart that lists all of the
• Inter-discipline coordination— activities and shows the approximate time
on a project, 20 different range during which each function was
disciplines can be involved. performed. However, these charts lack
The key to project management the details of how activities relate to other
is to coordinate the activities activities in the critical path. A typical bar
between these diverse groups. chart (Gantt chart) is shown in TABLE 1.
Weekly progress meetings are Working back from the date a critical
held to determine if the necessary piece of equipment must be onsite is one
information has been exchanged example of defining a critical path activ-
so that each of the disciplines can ity. The time to ship to the field and to
accomplish its requirements. fabricate, the purchasing cycle and final-
• Documentation of work— izing specifications determines the latest
on a periodic basis, the contractor date an engineering specification can be
should document the work completed. On some critical path items
that has been performed. with long delivery times, it is often re-
Weekly progress reports are quired to issue a specification based on
essential when certain phases a number of assumptions that will have
of work are completed. to be confirmed during the engineering
• Issuing design packages— phase. Large compressors, heavy wall
Schedule “A” packages are one way reactors and alloy heat exchangers are
of providing a preliminary design some of the equipment that fall into this
package. This package should category.
Wash water
Offgas to NGL and OPS
Crude
LPG to NGL frac
Sour water to SWS Sour water to SWS
Atmospheric Naphtha
column stabilizer
ATM
naphtha
Kerosine Stabilized naphtha
stripper
Steam
Kerosine
Diesel Vacuum
stripper system
Steam
Diesel
HAGO
stripper Vacuum
Steam column
HAGO product
Atmospheric Combined VGO to storage
heaters
Quench
Asphalt and vacuum residue rundown
Vacuum residue to VBU
Vacuum
heaters
 ENGINEERING AND CONSTRUCTION

One option some contractors use is provided was LTO from the Bakken. • Miscellaneous replacement
to make an arrangement with a vendor The required project modifications of process piping, which were
to provide a spot in their manufacturing included: too small.
operation for a piece of equipment with • The installation of a fourth
very general specifications. Reactors are a desalter for light crude processing. TAKEAWAYS
typical example of this approach. Special • An increase in heat exchange Conducting small projects requires a
alloy steel may have to be ordered in ad- upstream and downstream of the different approach than those used for
vance, as it can be the most critical item. desalter. larger projects. To be cost effective, mul-
The weekly progress review meetings • A new crude pre-flash system to tiple small projects should be executed
must address all of these critical path provide a means to recover the by small teams. Because individual proj-
scheduling concerns. Engineering disci- naphtha from the crude upstream ects are usually in different phases at any
plines should coordinate their activities of the main crude column. given time, keeping the work separated is
based on the knowledge of what specifi- • Additional heat exchange upstream a key challenge.
cations are critical to other disciplines. of the fired heater. Small projects require the use of
TABLE 1 shows a Gantt chart schedule • Adding convection section coils to multi-discipline individuals who can
based on weekly activities. This chart is for the crude heater. This allowed the perform more than just one specialty.
a 24-week project to execute a crude unit installation of an ammonia-type Communication is the key. The goal
expansion (debottlenecking) project to SCR system for NOx removal from is to have all project personnel on the
increase unit capacity. The numbers indi- the heater stack. This operation same page. This requires skillful project
cate how many weeks it would require to provided a justification for the new management, especially within the early
execute the given activity. permits (NOx reduction). stages of the project.
FIG. 2 shows a process schematic of • Modification to the AGO
RAY ELSHOUT has 30 years of process and project
the modifications made to increase the draw system and new AGO engineering experience with Fluor, Jacobs and
crude unit capacity from 140 Mbpd to product pump. Unocal. He is a consultant with Energy Systems
180 Mbpd. This drawing does not show • New, larger diameter impellers Engineering, and his primary experience is in process
design, including retrofits, revamps and expansions.
the pump around the loops, which remain for the overhead naphtha, kerosine Mr. Elshout holds BS and MS degrees from the
the same. In this case, all additional crude and diesel product pumps. University of Michigan.

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