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1st PMI AGC Energy Forum: DMS Debates :

1st PMI AGC Energy Forum: DMS Debates : Project Owner should increasingly adopt the EPCM Model over the EPC Model By Dr. F. G. Abbosh Hilton Abu Dhabi , Wednesday 2nd June 2010. Project Owner should increasingly adopt the EPCM Model over the EPC Model. EPC vs. EPCM

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1st PMI AGC Energy Forum: DMS Debates :

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  1. 1st PMI AGC Energy Forum: DMS Debates : Project Owner should increasingly adopt the EPCM Model over the EPC Model By Dr. F. G. Abbosh Hilton Abu Dhabi , Wednesday 2nd June 2010

  2. Project Owner should increasingly adopt the EPCM Model over the EPC Model EPC vs. EPCM (Definitions ,already given)

  3. OVERVIEW OF PREVAILING EXECUTION STRATEGIES LAST 5 DECADES • In 70’s : Separate Contracts • In 80’s : EPCM • In 90’s : EPC • In 2000’s : EPC • Post 2010 : ??

  4. OVERVIEW OF PREVAILING EXECUTION STRATEGIES LAST 5 DECADES- Cont. • Contractor Selection • Single Source : 10% • Competitive/Open bid: 15% • Competitive /Short-Listed : 75% • Contracting Strategies • Reimbursable EPCM : 5-10% • Reimbursable EPC : 5 % • Lump Sum EPC : 75-85% • Others (mixed/multi) : 5%

  5. EPC vs. EPCM EPC • Lump-Sum approach • “Cheapest is Best” mentality • Larger $ value of projects/contracts >>>>>>> Higher $ value of L.D.’s, Liabilities & Risks • All risks on Contractors shoulders (Material price hikes, Exchange Risk, Unknown site conditions,NewTechnologies etc.) • High Contingencies built in as a result • Lack of Control/Quality/Schedule

  6. EPC

  7. EPCM

  8. Oil & Gas - Forecasted Projects, Investments in the GCC Countries (2010-2014) • KSA: $110bn   (by 2019: $267bn to be invested) • Iraq: $70bn   (mostly oil field development + infrastructure upgrade + pipelines) • Kuwait: $35bn  (10 Oil Field + 25 Refinery) • UAE: $30bn  (12 for Petrochemicals/Refining + 12 Offshore + 6 onshore) • Bahrain: $17bn (12 for oil field + 5 Refinery) • Oman:  $14bn  (7 Petrochemical/Refinery complex + 3 Oil + 4 Gas distribution) • Qatar:  $10bn  (5 Gas Field development + 5 Refinery) A TOTAL INVESTMENT of Approx. $290 Billion

  9. Summary Advantages of EPCM over EPC • Lower Cost ,egpotential saving of 15-25% on above $290 Billion • Better control of Quality, • Better control of Schedule, • Owner gets what he wants • Etc.

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