Putting Value Engineering into Practice

Our in-house engineering team has helped a Permian-based client realize more than 10% savings on the total installed costs of a major infrastructure improvement program.

Taking a Novel Approach

What started out as a small scope to provide the detailed design package for the installation of water booster pump stations, evolved into the development of a standard ‘design one, build many’ design package that promises our client year-on-year savings.

Seeking to increase its production targets over the next few years our client needed to install between 40 and 50 booster pump stations across its assets. The first campaign alone was to install 17 stations.

Finding a Better Way

We felt there was a better way to tackle this project and, with support from our client, began developing a “design one, build many” standardized design. This approach would allow us to drive down costs by optimizing the mechanical and electrical and instrument designs, whilst ensuring robust material selection and long-term operability.

We drew on our experience of designing and implementing many plant modifications and improvement projects, applying our full-spectrum engineering capability to creatively rework every aspect of the standalone station design.

We maximized pre-fabrication and skidding where possible, to reduce the amount of time construction personnel were required on-site and improve quality control. It also allowed us to significantly accelerate schedules.

Flexibility Drives Project Success

However, before the standardized builds could begin, the downturn began to bite, and CAPEX was cut across the region. With several pump stations still needed to support the infrastructure improvements, we worked closely with our client to find another solution: our Plan B.

On learning there was unused, spare equipment within our client’s inventory, from transformers and switchboards to pumps, VFDs and control panels, we started to look at ways to release this inventory. This would offer immediate CAPEX savings and enable them to press on with their improvement program.

Collaboration is Key

By taking a creative, collaborative approach to this project, we have helped our client deliver vital infrastructure improvements, even when budgets were constrained.

Drawing from our multi-discipline team of engineers and designers, we surveyed every piece of existing equipment, working alongside client and vendor personnel.

Engineering Excellence

Our electrical engineering team validated the existing power distribution equipment using Electrical Transient Analyser Program (ETAP)) modeling to ensure their compatibility, taking account of the local power distribution characteristics.

We wrote scopes of work and requests for quotations (RFQs) for vendors to carry out the minimum modifications, refurbishment, and testing required to enable the use of more than 50 electrical and mechanical equipment items that were already in our client’s inventory.

Highlight: New CAPEX for this first campaign will be reduced by over $1.5 million, a saving of more than 10% of the total installed cost (TIC).

Ready for the Future

By progressing Plan B our client has reduced spending in a very tough market, continued to improve its infrastructure, and is now better positioned to benefit from an improved market in 2021 and beyond.

With the standardized equipment packages in hand, our client can pick up this approach in the future when CAPEX restrictions begin to lift, knowing they have a reliable, cost-effective package that will deliver streamlined delivery in the field.