North Pailin Project

Project Description

General Info & Situation

The North Pailin Central Processing Platform (NPCPP) is an offshore platform located 301 miles south of Rayong, in the Gulf of Thailand. It looks different to other Unocal Central Processing Platforms (CPPs) in the Gulf of Thailand, as it is more compact, having integrated Production and Living Quarters onto one platform unlike the traditional two separate platforms. There is approximately 15 kilometers of piping running through the platform and 82.5 kilometers of cabling.

SITUATION

The customer requirements changed many times throughout the project. In particular a major challenge for the project team was managing the effects of the 1997 Asian economic crisis. When this occurred, there was grave concern that market demand would not allow projects such as North Pailin to sell gas as originally scheduled in the GSA. The North Pailin project team had initially rushed through preliminary design in response to a request to bring forward the original delivery date. Following the economic crisis and completion of the preliminary design, the project had to be put on hold while Pailin Partners and PTT discussed options to delay start-up and associated increased gas deliveries from North Pailin. When detailed design was re-started there was still uncertainty. At the very latest date possible, the decision was made to proceed with a target delivery date of 1 July 2002. The project team was under a great amount of pressure to re-gain momentum and get the project back on track. The experienced and talented project team, many of whom worked on the first Pailin CPP, were able to put the project back on schedule while not compromising quality or allowing costs to creep upward. Indeed, innovations in contract awards and management of long lead items saved a lot of money in getting items at more favorable prices and mitigated the risks associated with gas market demand.

The project was actually kicked off on 18 October 1998. Participants were scattered from companies around the globe. The project was designed in Perth, Australia; the NPCPP was fabricated in Batam, Indonesia; the LQ was fabricated in Sharjah, UAE; and materials procured worldwide – USA, Switzerland, UK, Italy, Australia, Germany and Singapore. This represented a major challenge in procurement, expediting and shipping coordination, which was all undertaken from Batam, Indonesia. The logistics, communication, risks and challenges of operating from this location proved to be some of the greatest hurdles for the project team.

Carefully considering the benefits, the project took risks awarding the CPP fabrication contract to be undertaken in Batam, Indonesia. Up until the Unocal contract, the McDermott fabrication yard had been closed for approximately 2 years. This allowed Unocal to negotiate a favorable contract, but it also meant setting up with new staff and processes and re-starting a ‘cold’ yard. Unocal supported this start-up resulting in jobs for over 1000 people and more money flowing into an extremely poor local economy. The team also had to overcome the challenges of actually living in Batam. The project team arrived in Batam within 2 weeks of bombings. There were 4 bombs exploded on the island on Christmas day which resulted in significant religious tensions. For security reasons, the team had to be moved around the island, which resulted in a higher level of emergency and evacuation planning. Malaria and Dengue Fever affected some team members who had to return to the USA for treatment. As a result, disease movements were tracked quarterly and there were regular medical checks and hygiene audits implemented. Although away from their families for extended periods of time, often having to deal with political unrest and other problems, the team focused on the project goals and used team building and other motivational activities to manage and ultimately overcome the many difficulties they faced. This project was a highly challenging endeavor as it achieved its goal to design and build a CPP with enhanced operational capacity, combined with a decreased facility size.

Results

On May 2002 the North Pailin Gas Development Project produced its first gas 37 days ahead of contract delivery schedule and 12% under the baseline budget. Although constrained by customer demand, the project achieved 18% above the required production rate one week ahead of schedule, on June 24th 2002. Not only does the North Pailin facility represent 15% of the Unocal Thailand gas production, but it also represents 6% of the total gas energy needs for the Kingdom of Thailand.

The result being a platform which uses almost half of the operations manpower of a typical platform. The team met the challenge by using innovative design to build the first integrated CPP and Living Quarters facility for Unocal Thailand. Prior to the North Pailin project, Unocal Thailand used no formal Project Management system in planning and implementing projects. The Project Management initiative, which started only a year earlier (1998), was still under way and was put to a true test. The ambitious challenge placed in front of the Project Manager at the start of the project was “let’s do this project in such a way that we win the PMI POY award” and was accepted. The services of a dedicated Project Management Coach (who was also part of the Project Management initiative team) were used to ensure that PM best practices were followed. The project met all its objectives through the application of the PMBOK elements by a highly competent team.

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