## W8_TH_ Index and Power Sizing Technique for CNG Compressor Cost Estimating

##### 1. Problem Definition

Electric Motor has been choosing as a prime mover type for gas station project on Blog Week 3. In 2017, company will build new gas station project with capacity is 0.5 MMSCFD. Company has budgetary quotation data from three different compressor manufactures at 2015. Since the company will be using the price for calculate conceptual economic model, then the optimum price for 0.5 MMSCFD electric motor CNG compressor must be develop.

##### 2. Develop the Feasible Alternative

There are budgetary quotation price from three different compressor manufactures, as follow:

Table 1. Budgetary Quotation Price

##### 3. Develop of the Outcome for Alternative

Author will use formula of power sizing technique (correlation between price and capacity) and index to get cost estimation for 0.5 MMSCFD electric motor CNG compressor in 2017 project.

Fig 1. Power Sizing Model Formula

For index, author will use Chemical Engineering Plant Cost Index (CEPCI) because CEPCI is one of best bench-marking index since introduction in 1963.

Fig 2. Index Formula

Fig 3. CEPCI Index

##### 4. Selection Criteria

Author will use P50 at PERT analysis to determine optimum price for 0.5 MMSCFD electric motor CNG compressor.

##### 5. Analysis & Comparison of Alternative

Based on data and formulation above, here is the analysis and calculation for correlation exponent result:

Table 2. Correlation Exponent

Using correlation exponent (m), sizing model analysis for 0.5 MMSCFD for each budgetary quotation could be calculated as follow:

Table 3. Estimate Cost 0.5 MMSCFD CNG Compressor

The calculation above show still using 2015 database and to get reflection new cost 2017 the data shall be adjusted by CEPCI index value at March 2017 (Figure 3).

Table 4. CEPCI Index Value Result

##### 6. Selection of the Preferred Alternatives

Author use PERT analysis on P50 to determine optimum price, the result as follow:

Table 5. P50 PERT Analysis Result

Based on analysis above, price for 0.5 MMSCFD CNG compressor with electric motor prime mover is \$ 313,970.

##### 7. Performance Monitoring and The Post Evaluation Result

Power Sizing Model and Index Value above is a good formula to estimate the indicative price for conceptual economic calculation. It can be using of any kind project, such as oil & gas, automotive, power plant, etc.

References:

1. Planning Planet (2017). Creating The Owners Cost Estimate (Top Down). Retrieved from http://www.planningplanet.com/guild/gpccar/creating-the-owners-cost-estimate
2. Sullivan, G. W. (2014). Engineering Economy 16th Chapter 3 – Cost-Estimation Techniques, pp. 99-110
3. Irene, Audray. (2017). W5_AI_Power Sizing Model|Emerald AACE 2018. Retrieved from http://emeraldaace2017.com/2017/09/03/power-sizing-model-and-index-value-for-offshore-regasification-facility-project-cost-estimating/

## W7_TH_ Standardized WBS Structures for Gas Station Project-Part 4

##### 1. Problem Definition

Gas Station (GS) project is a construction project of gas pipeline treatment facility to compressed natural gas (CNG). CNG is used as motor vehicle fuel. Types of motor vehicles that currently dominate the use of CNG are public transportation such as bus, bajaj and taxi.

Fig 1. GS Project Lay Out

A GS area consists of several areas: commercial area, administrative area, main equipment area and utility equipment area. In this project each area is supported by some equipment or facilities

Commercial area is the area used for costumer consists of waiting room area, food court area, ATM area and minimarket area. The administrative area consists of gas station office space, workplace, worship room and toilet. The main equipment area generally contains equipment such as scrubbers, dryers, compressors, CNG storage and dispensers. While the utility equipment area consists of POS (point of sales), FACP (fire alarm control panel), CCTV (closed circuit television), ESDV, air instrument and panel room.

In the project, Engineering team is divided into several disciplines such as mechanical engineer, process engineer, civil engineer, instrumentation engineer, electrical engineer and pipeline-pipeline engineer.
Each engineer has the task in accordance with his expertise to oversee the project from the initial phase, design, construction, commissioning and subsequently submitted to the operations team

After compare 15 Omniclass Tables that applicable and relevant for GS Project WBS, in this week Author will build Standardized GS WBS from top three OmniClass Tables which are:

1. Table 13-Spaces by Function
2. Table 23-Products
3. Table 31-Phases
##### 2. Develop the Feasible Alternative
• Table 13-Spaces by Function

Spaces by Function are basic units of the built environment delineated by physical or abstract boundaries and characterized by their function or primary use. Spaces have a purpose or use.  This is their function and the concern of this table.  Spaces can be occupied by people, things, and substances and serve as mediums for activities and movement.

• Table 23-Products

Products are components or assemblies of components intended for permanent incorporation into construction entities. A product may be a single manufactured item, a manufactured assembly consisting of many parts, or a manufactured operational stand-alone system.

• Table 31-Phases

A phase is a period of time in the duration of a construction project identified by the overall character of the construction processes which occur within it. This table provides the time and activity dimension for the process of creating and sustaining the built environment.  A “project” can be defined as a planned undertaking consisting of a process or set of procedures to accomplish a task.  Phases are portions of time and activity efforts within any project that provide necessary groupings of activities, and resultant milestones and expectations.

##### 3. Develop of the Outcome for Alternative

Moine (2013) has developed a 3D WBS model. All of this three dimension projects can be integrated in comprehensive 3D models which visualized as Figure 2 below[2]:

Figure 2. Project Cubes Concept of 3D WBS Model[2]

Author will combine Table 13-Spaces by Function as Zone Breakdown Structure (ZBS), Table 23-Products as Product Breakdown Structure (PBS) and Table 31-Phases as Activity Breakdown Structure (ABS) to become Standardized GS 3D WBS.

##### 4. Selection Criteria

The criteria for choose OmniClass Number and combine to 3D WBS are:

1. The WBS should represent zone, activity or phase for GS Project
2. Deliverables should be decomposed to the level of detail needed to estimate the effort required to obtain them
3. Ensure That each WBS element has a single point of accountability
4. Support historical cost collection for future cost estimating purposes
##### 5. Analysis & Comparison of Alternative
• Table 13-Spaces by Function – Zone Breakdown Structure (ZBS).

Detail ZBS for GS projects can be extracted by OmniClass Table 13 (Space by Function) which noted spaces for decompose ZBS components, which detail shown:

Chart 1. GS OmniClass ZBS

Figure 3. GS Space by Function

• Table 23-Products – Product Breakdown Structure (PBS).

Detail PBS for GS project can be extracted by OmniClass Table 23 (Product) which noted GS facilities for decomposes PBS components, which detail shown:

Chart 2. GS OmniClass PBS

Figure 4. GS Facilities

• Table 31 – Activity Breakdown Structure (ABS).

Detail ABS for GS project can be extracted by OmniClass Table 31 (Phases) which noted project phase for decompose ABS components, which detail shown:

Chart 3. GS OmniClass ABS

##### 6. Selection of the Preferred Alternatives

Three Tables are combine together to form dimensional cube where OmniClass PBS as x-axis, OmniClass ABS as y-axis and OmniClass ZBS as z-axis, which shown at 3D WBS below.

Figure 5. GS OmniClass 3D WBS

##### 7. Performance Monitoring and The Post Evaluation Result

Standardized GS WBS can build from combining top three OmniClass Tables. It is necessary to keep update the WBS periodically during project phase. Project management team also needs to evaluate the impact during phases of the project so the project can smoothly deliver with on time, on budget and on scope.

References:

3. OmniClass (2017), OmniClass Table 21 – Elements (includes design elements). Retrieved from www.omniclass.org/tables/OmniClass_21_2012-05-16.zip
6. El Rashid, M. (2016). The Influence of Non-Standard Work Breakdown Structure on Change Orders and Cost Estimation for Sudan Oil and Gas Projects, PM Word Journal Vol. V. Retrieved from http://pmworldlibrary.net/wp-content/uploads/2016/12/pmwj53-Dec2016-ElRashid-non-standard-work-breakdown-structure-sudan-featured-paper.pdf

## W8_AI_Tuckman Survey for Process Engineering

1. Problem Definition

Process Engineer Team has been actively working together for the past 4 years. The challenge of this team is the increasing and complexity of gas infrastructure projects that will be faced. We now want to determine the leadership skills and styles which the group may benefit from as it enters this next phase of the project. Then for this week Tuckman Survey will be applied.

1. Identify the Possible Alternative

In 1965, Tuckman published his Forming Storming Norming Performing model and completed with the fifth stage, Adjourning in 1970s. This model explains that as the team develops maturity and ability, relationships establish, and the leader changes leadership style from Directing (Telling), Coaching, Participative, and Delegating up to Directing (Concluding).

Figure 1. Tuckman’s Team Development Model

Illustration graph of Tuckman Model Group Development Stages is shown in the next figure:

Fig 2. Tuckman Group Development Stages Model

1. Development of The Outcome for Alternative

To determine current Process Engineer Team stage, each individual in team fill the excel format of Tuckman Survey Scoring Template.

Table.1 – Individual responses

1. Selection Criteria

Based on the above individual’s response, PERT analysis was performed to identify team behavior at P90 because these team already join over long time (4 years)

Table 2. P90 Delphi Technique Result

1. Analysis & Comparison of Alternative

Based on Table 2 above, we can conclude the team is in Performing stage (indicated by the rank). During this stage, team members often experience:

• Constructive self-change;
• Deep sense of belonging;
• Understanding of each other’s strengths and weaknesses;
• Self-organization of work;

• Delegate all work that sensibly can;
• Focus on developing team members;

Style of leadership this stage is “DELEGATING” mode where some leadership is shared by the team.

1. Selection of the Preferred Alternative

Process Engineer team can achieve more than each team member individually. Being part of a high-performance team can be extremely rewarding, but it requires time and commitment to get to that stage. The team leader job is to help this team reach and sustain high-performance and leader has to adapt behavior and leadership style to the different challenges presented at each stage. The team leader responsibility is to be aware of the challenges the team will face and support the team to get aim together.

1. Performance Monitoring and The Post Evaluation of Result

Team assessment should conduct periodically in six months ahead to capture team phase changing and select appropriate style of leadership, this evaluation can help the team to improve coordination and productivity.

References:

2. Michell, Tony (2017). W2_ABM_Folow Up Tuckman|EMERALD AACE 2017. Retrieved from http://emeraldaace2017.com/2017/08/08/w2_abm_follow-up-tuckman-survey-on-spj-offshore-construction-team/

## W8.1 – Sulphur Product Handling Jetty – Applying a standardised WBS (Part 2)

Problem Definition

Under my week 7 blog, we considered the use of a 3D WBS and the most suitable Omniclass table using the standard dimensions of ZONE (ZBS), ACTIVITY (ABS) and PRODUCT (PBS).

This is only 1 combination and can be expanded to include other aspects of a projects performance to enhance visibility. This expansion will take the form of additional breakdown structures as well as different combinations with each providing a unique and different perspective on the project.

And whilst there could be a large number of combinations available, the selection of the preferred combination(s) will largely depend on stakeholder requirements.

In this blog we will stay with the SPJ – package 12B project and use the EPCC Contractor as the Stakeholder and consider some typical requirements which an EPCC contractor may have when analysing their works and progress of the package 12B project.

We will establish which Combination of Breakdown structure should be considered to provide the EPCC with a clear view of those aspects which it considered important.

Once a determination of most relevant combination is made, we will select the most appropriate Omniclass table to support the Break down structure and filtering options.

Feasible Alternatives

We will consider the following breakdown structures in a 3 dimensional combination;

If we limit to only 3 dimensions, or fields, then the maximum number of permutation is as follows;

Development of the Alternatives

Each Breakdown Structure provides the EPCC with a unique set of information. This may be summarised as follows;

Selection Criteria

We will consider the following aspects as the basis for determining which are the relevant WBS combinations and dimensions;

Comparison of Alternatives

By considering the needs of each monitoring requirement and then relating these needs to the relevant breakdown structure, we can reduce the number of combinations to only 10.

Selection of the Alternatives

As determined under the week 7 blog posting, the relevant omniclass tables which would support the package 12B project scope were;

• PRODUCT / SYSTEM- Table 23
• PHASE – Table 31(2006)
• AREA – Table 14
• WORK ACTIVITIES – Table 22

The same tables could be used to establish the project ABS (Table 22&31), PRBS(table 23) and ZBS (Table 14) as noted above. The Omniclass table 35 & 33 would support the RSBS and definition of plant and labour.

Performance Monitoring

The development of Breakdown structures for elements such as CTBS/ CLBS and CHBS would require project specific formats and structures. Combining these formats with the Omniclass system would require further assessment and considerations

References

2. Moine J-Y. 2013.3D Work Breakdown Structure Method, PM Word Journal Vol. II, Issue IV–April 2013

4. Chapter 3.4 creating the WBS – Guild of project controls compendium and reference (CaR) | Project Controls – planning, scheduling, cost management and forensic analysis (Planning Planet).  Retrieved from http://www.planningplanet.com

## W7.1_AI_Developing Operation & Maintenance Model for Offshore Regasification Facility Project

1. Problem Definition

Besides capital expenditure, one of the cost components which is needed in financial economic model is operation and maintenance cost. Still discuss about offshore regasification facility project, this week I will develop operation and maintenance model for the project, and this WBS would be applied for O&M activities provide by owner so it will be covered the asset of onshore receiving facilities and pipeline. As for the initial stages in building O&M model is determine cost structure. In making the cost structure of a project, the first thing to do is by determining work breakdown structure (WBS). In this week, I will choose WBS standardization between omni class and norsok to be applied.

1. Identify the Possible Alternative

There are two commonly used WBS standardization among others:

1. OmniClass
2. Norsok

Both of this standard would be compared and the optimum WBS standard would be chosen.

1. Development of The Outcome for Alternative

Table 1. OmniClass Table

The table above is 15 hierarchical that is designed to provide a standardized basis for classifying information. Each of it represents a different phase of project information and every entity can be combined one and another, to build more complex structure.

Moine has developed a 3D WBS model. All of three dimension project can be integrated which visualized as figure below:

Figure 2. 3D WBS Model

Norsok Standard describe a system for cost coding and weight estimates and as-built or experience data. The following is coding system classification of Norsok standard:

Figure 3. Norsok Standard

1. Selection Criteria

Cost structure which can be applied from OmniClass standard to O&M model of Offshore Regasification Facility Project consists of:

Table 2. WBS Matrix

The table above shows matrix from omniclass table to being an input for develop 3D WBS structure.  The 3D WBS is based on three main dimensions consist of Zone Breakdown Structure (ZBS), Product Breakdown Structure (PBS) and Activity Breakdown Structure (ABS).

While the applicable cost coding of Norsok Standard to O&M model of Offshore Regasification Facility Project consists of:

Figure 4. Operational Principles Norsok Standard

Using Norsok standard some parameter must be identified at the first place:

1. Operating Concept
• Operation objectives
• Operating environment
1. Operating Philosophy
• Criticality
• Complexity
• Choice of technology
• Training and sparing
• Manning and personnel competence
1. Production function requirements
• Production operations (general, start-up, shut-down, isolation for maintenance, well testing, well intervention)
1. Maintenance function requirements
• Maintenance strategy
• Maintenance engineering (design, organization, programs)
1. Inspection strategy

1. Analysis & Comparison of Alternative

Both standards can be applied in operation & maintenance model of offshore regasification project. But one of the most optimum methods must be chosen to be applied in this project. Considering that the methods used is top-down and from owner perspective, as well as on business scheme operation & maintenance facilities will be contracted to a third party (ship management) using the Long Term Service Agreement, so to coverage of O&M model consists of head quarter for office activity, along onshore receiving facilities and pipeline.

Considering it is then the most optimum standard used is OmniClass standard.

The developed WBS will be follow this criteria:

• WBS Phase related to the asset
• WBS Area related to the asset
• WBS Service related to the asset
• WBS Organization Role related to the asset
• WBS Element related to the asset

Table 3. WBS Value Score

Table 4. WBS Weighted Score

1. Selection of the Preferred Alternative

Based on above description, it shows that the combination of Omniclass table with 3D WBS is better than the single standard. As we can gain deliverables that can be view from many perspectives. Then OmniClass 3D WBS is considered to be applied for Offshore Regasification Facility Project. The rating of OmniClass 3D WBS as follow:

Table 5. OmniClass Table Rating

Rating no 1 up to no 6 will be develop as an input for 3D WBS of Offshore Regasification Facility Project.

1. Performance Monitoring and The Post Evaluation of Result

This 3D WBS is very suitable with condition of current business scheme, so it will have a positive impact on the company for developing it. But also the company need to consider another standard like Norsok as a validation against third parties, or when the business scheme changes, such as the company responsible as a facility operator & maintenance.

Reference:

1. Planning Planet (2017). Creating Work Breakdown Structure.
1. Sullivan, G. W. (2014). Engineering Economy 16th Chapter 3 – Cost-Estimation Techniques, pp. 96-98.
2. Hendarto, T. (2017). W6.1_TH_ Standardized WBS Structures for Gas Station Project-Part 3

http://www.standard.no/en/webshop/norsok/?gclid=CjwKCAjwuvjNBRBPEiwApYq0znFC82NEh-OnYem5gU6RHcLNKM-Gx94QdFJQCp_ljPWR14CyBKHaoRoC2r8QAvD_BwE#.Wb5XtdElHIU

http://www.omniclass.org/

## OAN_W8_Contingency Estimation in Fuel Terminal Project

1. Problem Definition

Downstream Oil & Gas Business Unit in a company plan to make a new Fuel Terminal, The Project Management Division asked to make a cost estimation for the Project.

Most of our contract, has cost overrun. Therefore, it is necessary to prepare cost contingency for the Project to anticipate the additional cost.

1. Development of Feasible Alternatives

There are 4 methods to estimate cost (also time) contingency:

• Expert Judgment
• Predetermined Guidelines
• Simulation Analysis
• Range Estimation
• Expected Value
• Parametric Modeling

For this case, Author uses Simulation Analysis with Range Estimation method.

Range estimating is a risk analysis technology that combines Monte Carlo sampling, a focus on the few critical items, and heuristics (rules of thumb) to rank critical risks and opportunities. This approach is used to establish the range of the total project estimate and to define how contingency should be allocated among the critical items.

1. Possible Solution

The following steps will be used to determine cost contingency using range estimating:

• Determines of ranges for each cost items.
• Determines the probability that each item can be completed within the estimate.
• Running Monte Carlo simulation for the cost range.
• Determines of critical items based on result of Monte Carlo simulation.
• Determine of contingency with reference to critical items only.

Following are base estimates for each cost items:

Table 1: Base Estimates for Fuel Terminal

Through a risk analysis and based on historical information, range of each cost items was determined, as shown on table 2. Table 2 also contains the desired probability for each item, which come from management policy.

Table 2: Range and Desired Probability

After determining range and desired probability of cost items, further step is to conduct Monte Carlo simulation with the result as shown on Table 3.

Table 3: Monte Carlo Simulation

1. Selection Criteria

Determines of critical items are conducted by using the following criteria.

Table 4: Bottom Line Critical Variances

1. Analysis and Comparison of the Alternatives

By using above criteria (for Classes 3, 4, 5), critical items were determined as shown in Table 5.

Table 5: Data

1. Selection and Preferred Alternatives

The last step is to determine the cost contingency, as shown in table 6.

Table 6: Proposed Solution

1. Performance Monitoring and the Post Evaluation of Result

It is necessary to conduct strict monitoring during implementation of the Project, to prevent the cost overrun exceed the cost contingency.

Refrences

1. Sullivan, William G., Wicks, Elin M. & Koelling, C. Patrick. (2014). Engineering Economy 16th edition Chapter 12 page 546- 554, England: Pearson Education Limited.
2. AACE International Recommended Practice No. 41R-08