A good job well done

Inaugurated on October 16 last year, the $4.5billion Malampaya deep-water gas-to-power project opens up a new era for the Philippines' economy as the country starts to exploit its substantial offshore resources.

Natural gas is being extracted by Shell Philippines Exploration (SPEX) in water depths of 820m. After condensate separation, it is then piped 504km subsea before landing onshore for processing at the Malampaya onshore gas plant (MOGP).

Dubbed the 'revenue valve' for the whole gas-to-power project, the two-train MOGP treats 500million scfd of sour gas before delivering it to three power stations with a total generating capacity of 2700MW - some 30 per cent of the country's current demand. With no gas storage facilities on site, 'the gas plant had to have 99 per cent reliability' explains Vic Wilkie, Foster Wheeler's project co-ordination manager for the MOGP project. And if that requirement wasn't sufficiently challenging, the delivery date of the first gas to the power generation customers was set in stone by SPEX - October 1 2001, no ifs, no buts.

Foster Wheeler was awarded the EPCC (engineering, procurement, construction and commissioning) contract for the onshore gas plant on August 1 1999, putting the whole project on to a fast-track schedule that allowed only 11 months from the first commissioning activity on site to handover. Emphasising FW's role as managing contractor, Steve Davies, director, regional operations for Foster Wheeler Energy Ltd, says the project was 'a halfway house between a lump-sum and a reimbursable contract, which gives the opportunity to bring in performance targets.'

Although not a project 'partner' in today's accepted sense, SPEX, the customer, nevertheless shared its project drivers and objectives with FW. 'At all stages,' stresses Davies, 'we were measured, and were measuring ourselves, against these objectives. This is our philosophy - under-standing the customer's drivers and objectives, beyond the traditional cost and performance requirements.'

This shared vision of the project was evident very early in the detailed design stage when teams from both companies undertook a 'value engineering' exercise aimed at reviewing the proposed treatment process to find possible cost savings.

The process takes in sour gas from offshore at 185bar, treats and dries it before delivery to customers at 60bar. The incoming gas contains methanol, injected at the wellheads offshore to inhibit hydrate formation in the pipelines, and 1000ppm H2S.

Normally, the methanol is removed first by water scrubbing, followed by amine treatment of the H2S using Exxon's Flexsorb technology. However, the design teams came up with a revised process whereby the methanol would be removed after the amine unit. Completed in just six weeks, the exercise realised savings of nearly $25million.

In theory, Malampaya was a 'greenfield' project. But this particular green field was located in an earthquake zone, with limited road access, and subject to tropical storms. Preparing the site involved trucking in millions of tonnes of stone, with innovative civil engineering being employed to keep on schedule.

Plant and equipment procurement also involved an innovative blend of global and local sourcing, with a practice of designing around what was readily available in the marketplace helping keep the project on track. So cost effective was this strategy that, at the end, SPEX remarked that material surpluses left on site were the lowest it had ever experienced.

Innovation, in fact, was a feature of the whole project. From the early revisions of the process technology - with 'invaluable' support from the two main process licensors, Exxon and Parsons/UOP (for the Selectox sulphur recovery plant) - to the implementation of the IEC 61508 safety standard (see PE, May 2002, p23) across all parts of the plant, the MOGP was more of a prototype project than a carbon copy of similar plants around the world.

The plant boasts one of the largest installations of a Foundation Fieldbus, for example, linking Emerson Process Management's DeltaV control system to field devices via just two cables.

Engineering data is also widely accessible at the operational level thanks to an innovative Foster Wheeler approach. Part of a study contract with Shell to see how best to implement open engineering data standards such as STEP and EPISTLE, this takes an alternative approach to conventional data warehousing. Based on the creation of a Central Asset Register, it is a web-based system that will give plant operators, engineering and maintenance staff (or anyone with approved access) the ability to source any original information on the project throughout the lifecycle of the plant.

As Vic Wilkie says, with reference to the well-known UK initiatives aimed at improving project performances off- and onshore, 'without any formal contractual requirement, we ended up with all the attributes of the CRINE and ACTIVE approaches to project management.'

Meeting the targets

Wilkie's role as project co-ordinator went far beyond the construction phase. He describes it as 'a unique approach, because of the targets set by the client.' These targets embraced not just cost and plant performance, but took in commissioning and start-up expectations that were benchmarked by Shell against 'world-class' criteria.To give just one example, Shell's world-class criterion for leaking flanges at start-up is 0.2 per cent of the total. Malampaya has 10 000 flanges, giving Foster Wheeler a target of only 20 leaks across the entire plant - it had just two!

According to Steve Davies, there is now a trend for customers to place the onus for plant commissioning on to the contractor - 'a trend we can see increasing,' he says, 'as clients, even multinationals, become slimmer and slimmer.' In developing parts of the world, this opens up issues such as operator training and health and safety. The latter was a potential problem in the Philippines, but was overcome by effectively turning the site gate into 'a psychological doorway into the Foster Wheeler world of safety, integrity and security', as Davies puts it. Aided by attractions such as the on-site medical facility being made available to workers' families, this approach 'attracted the better workers from within the country.'

Whether down to psychology or just plain good site management, the project was completed with a staggering 11 million manhours worked without a single lost time incident - a performance that earned Foster Wheeler a special Safety Award from SPEX, to go with its Outstanding Contractor's Award.

SPEX managing director at the time, David Greer, made the latter award in recognition of FW's 'outstanding performance' against his company's six principal project tenets - health, safety, environment and security; sustainable development; cost; schedule; innovation; and availability.

The first gas delivery from the MOGP took place on September 27 last year, four days ahead of schedule. And in February this year, the governor of the local province of Batangas presented yet another award to FW in recognition of its 'services to the local community', including the establishment of a university library. Or, as Steve Davies says, 'something that would benefit future generations.' Rather like the Malampaya gas-to-power project, in fact.