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Integrating capital work into turnarounds

If a turnaround is to be successful, project work must be well integrated with the turnaround’s scope of work

Asset Performance Networks
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Article Summary

This article looks at the difficulties of integrating capital project work into a maintenance turnaround and the potential negative effects of poor integration, and discusses, in detail, the different aspects of integration that need to be considered if these negative effects are to be avoided. It also looks at when and how these integration issues should be tackled.

The article draws evidence from a database of information on turnaround events,1 gathered, held, and maintained by Asset Performance Networks, LLC2 (AP-Networks), the turnaround and project management consultancy. The AP-Networks Turnaround Database allows correlations to be drawn between team actions during the turnaround preparation and planning phase, and outcomes from the execution phase.

Why is project/turnaround integration an issue?

Project scope increases the risk of over-run on a turnaround
Maintenance turnarounds are a necessary element in the operation of any major, continuously operating facility in the oil and gas, petrochemicals, or other industries. Regulatory inspection requirements, daily wear and tear, and the inevitable build-up of dirt and contaminants mean that most facilities have to shut down at least once within a typical four- or six-year cycle.

While the facility is shut down, it is not producing. As such, not only must the business consider the cost of executing the turnaround work, it must also take account of – and take steps to minimise – the ‘lost production opportunity’ (LPO) cost of those non-producing days. Consequently, there is a logical focus on minimising the volume of work to be carried out during the shutdown window and on executing that work in the most efficient manner possible.

However, a shutdown is often the only time when capital project work can be tied into the existing plant. As a result, as well as the inspection, maintenance and cleaning work, capital project work frequently gets added into the scope to be executed. This immediately adds complication to the turnaround preparation. Not only does project work add additional scope, but it is provided by a project team that is often a corporate function, remote from the site, that likely has little in the way of pre-existing relations with the site planning team. This project team more than likely thinks, plans, and works in a different way, using different procedures from the site turnaround team, which has its own ideas about procurement and contractors and is used to doing things in its own specific way.

Unfortunately, one of the top three reasons given by turnaround teams for turnaround failure is that the project work was insufficiently integrated into the turnaround.3 Indeed, as shown in Figure 1, the greater the proportion of project work, the greater the negative effect if the integration is not handled well.

Figure 1 shows the average over-run against planned cost and against planned schedule completion date for a sample of turnarounds across the globe. It also shows the sample split into four quartiles, depending on the proportion of the turnaround event scope comprised of capital project work (measured in terms of field labour hours). Figure 1 clearly shows that as project work increases, not only does the average over-run increase, but the variability of results within the sample (as shown by the standard deviation) also increases.

Project work is a common presence in turnarounds
AP-Networks has been tracking the performance of maintenance turnarounds in oil and petrochemical facilities for well over a decade. One trend that appeared in the data between 2006 and 2014 was the increasing prevalence of capital investment work as a portion of the turnaround scope. Figure 2 shows how capital project work has grown as a portion of the scope of an average turnaround since 2006.

With the current recession and low oil price, the data for 2015 is likely to show a levelling off, if not a dip, in that trend. Nevertheless, it is clear that capital project work as a portion of the scope for a maintenance turnaround is something that needs to be considered.

The positive effect of good project/turnaround integration
If we look again at Figure 1, we can see that the spread of data shows that some teams are achieving smaller over-runs, despite the presence of capital project work in their turnaround event scope. Previous research has examined which planning and preparation activities affect turnaround over-run. The research revealed that the over-run risk is almost certainly driven by the fact that project and turnaround teams tend to develop their work in different ways. This research showed that if the teams can align and integrate their work preparation in key areas, then the risk to the turnaround outcomes can be dramatically reduced.

AP-Networks uses its ‘Project Integration Index’4 to quantify the level of integration achieved by a turnaround event team. The tool looks at three key areas of integration: first, the organisation of the turnaround and project teams; secondly, the alignment of their work processes; and finally, their planning and preparation efforts. Using this tool, it can be seen in Figure 3 that well-integrated teams dramatically reduce the risk of turnaround over-run, compared to poorly integrated teams.

Essential topics to ensure good capital integration

Now that we know the importance of integrating the project team into the turnaround preparation efforts, we can begin examining all of the issues that should be addressed in order to achieve effective integration.

Note that, for simplicity, we will talk of ‘the project’. However, it is important for any turnaround event to include the management members from each project that will have scope executed during the turnaround.

Alignment of objectives
The first issue to be addressed is that both parties (turnaround and project[s]) must be aligned on what they are attempting to achieve. This encompasses two parts: firstly, deciding which projects will be involved with the turnaround; and secondly, the rules for deciding which portion of each project’s scope will be installed during the turnaround. Typically, these objectives are laid out in the turnaround premise document. Ideally, they should be spelled out in the project premise document as well.

Projects included in the turnaround
The Long Range Plan for the site should spell out which projects are planned for installation, along with the dates by which they are expected to be commissioned and available to the plant. From this, it should be clear which projects need to have some involvement in the turnaround.

The second element of this is then to review that list and consider whether the engineering and the materials for each project on the list can be made ready in time for the turnaround. (Refer to the later discussion of job-pack preparation and material procurement for details of this.)

Case study: projects included in the turnaround

A turnaround premise document specified that all projects would minimise their work for the turnaround. However, all the document said about which projects would be implemented in the turnaround was that the turnaround team would be required to install all ‘agreed scope’. The site process engineers continued to come up with new project improvements to the plant, right up until the turnaround. Without an agreed list of approved projects, the turnaround team had great difficulty refusing all of these late project requests.

Criteria for additional projects
The third element here is then to spell out what criteria will be used to accept/reject any late requests to add additional projects to the turnaround scope. (Ideally, these criteria should be extremely onerous. It is very disruptive to turnarounds to accept late projects and so there must be compelling business reasons to add a late project to the scope.)

The danger in not spelling out explicitly which projects are to be involved in the turnaround is that the turnaround team has a weaker defence against efforts from other parties to add projects to the turnaround at a late stage during turnaround planning. Process engineers will continually come up with new ideas for plant improvements. But at some point, the increasing risk to turnaround success of adding more (and late) scope to the turnaround outweighs the possible benefit to production of the project.

Minimising project scope in the turnaround
Typically, the objective for the turnaround team is to carry out only the scope that needs to be done in order to meet the long term site objectives (four-year run time, and so on), in order to minimise the downtime the plant incurs and hence minimise the LPO. The project team however, may feel that they need to install the most cost effective solution, or may feel that as long as they stay off the expected critical path of the turnaround they can install whatever they like.

Ideally, the objectives laid out for the project team by the project steering committee should emphasise the need for minimum scope in the turnaround (even if that increases the engineered scope and cost outside the turnaround).

In addition, both turnaround and project staff need to be aware that, even though scope is not on the critical path, it may still cause issues by being ‘near-critical’ or by causing constructability/congestion issues with other scope. Hence the need to focus on minimum scope, no matter where in the facility that scope may lie. 

The turnaround team will wish to minimise the work being done during the shutdown window. Most sites recognise that this means that the project must have a statement in its objectives focusing on minimising shutdown scope (even if this adds to the project cost).

Case study: minimising scope in the turnaround

A project team wanted to replace some existing pumps during a turnaround on a facility in Southern Africa. The project team was instructed by their steering committee (based in Western Europe) to keep project costs to a minimum. The team therefore wanted to remove the old pumps and reuse the existing plinths and much of the associated pipework. The turnaround team was instructed by their steering committee (based on the site, in Africa) to minimise shutdown window scope. They therefore asked the project team to build new plinths and mount the new pumps, with inlet/outlet pipework, prior to the shutdown, leaving only a switchover of pipework connections to be done during the turnaround. The project team, under orders to control costs, refused. Arguments ensued.

Project design

An important issue for the project team to recognise early on is that their design work must reflect the constructability imperative of having the design broken into three distinct elements: pre-turnaround, turnaround, and post-turnaround scopes. This will require additional versions of construction P&IDs that show the different work scope in each of the three phases. It may also require the project team to consider the implications on their design of an ‘interim’ restart of the plant after the turnaround, but before all of the post-turnaround work is complete.

Designing in these three phases also facilitates the ability of the project to coordinate other issues with the turnaround team such as arranging contract strategies, tracking material procurement, allocating costs, planning work, and reporting progress.

Integration of the contracting strategy

One of the key issues to clarify early on is: who will carry out the installation work during the shutdown period? Will the project team and the turnaround team have their own separate management system, with all the coordination issues that entails? Or will one of them take over the other’s work for the duration of the shutdown, and avoid the need for coordinating different groups in the same workspace at the same time?

There are essentially five main options.

Option 1: separate project and turnaround execution teams
In this option, illustrated in Figure 4, the project team looks after its own execution work, even during the turnaround window. This option is common in areas of the world where there is a preference for passing responsibility over to the contractor, even at the expense of cost and schedule.

The advantage of this is that the project contractor can be given an EPCM or EPC contract without issues around retention of control during construction or around responsibility for quality of construction.

The disadvantages are that there will be duplicated costs between the turnaround and project for things such as cranes, scaffolding, and other construction facilities. There will also likely be constructability access clashes as project and turnaround workers attempt to access the same area of the plant. In general, this is likely to lead to a less efficient, longer execution window. Another issue to be aware of is the existence of different contract terms between the project contractors and the turnaround contractors, leading to issues of pay and shift conditions. 

Option 2: turnaround team manages all construction

In this option, illustrated in Figure 5, the turnaround team takes on all field execution work, even that prior to and following the turnaround window.

The advantage of this is that there is a clear split of EP and CM responsibilities for the contractor. It means that one organisation deals with all construction work, removing an interface and easing any issues of spillover of late pre-work into the turnaround window.

The disadvantages include the fact that, on the majority of sites, this method almost certainly overloads the site turnaround management team, as they take on even more field work. In addition, the clear split of EP and CM brings its own problems, including issues if engineering drawings or material are late, acceptance of responsibility for field problems, and a need to set up a clear method for handling site queries.

Option 3: site maintenance takes over pre-turnaround and post-turnaround construction

In this option, illustrated in Figure 6, the site maintenance team takes on all field execution work that is outside the turnaround window. This is a very rarely used option, typically considered when a site prefers option 2, but knows that this would overload the turnaround organisation.

The advantages and disadvantages are similar to those for Option 2, with the added disadvantage that now the site maintenance team is probably overloaded and there is now an interface to manage between pre-, during, and post-turnaround construction groups, as well as between the engineering contractor and construction.

Option 4: turnaround team manages all execution window construction
In this option, illustrated in Figure 7, the turnaround team takes on the field execution work for the project that falls within the turnaround window. This is generally the most popular option, but still has disadvantages that need to be managed.

The advantage of this is that 

there is one organisation in charge during the turnaround execution window, which (hopefully) contributes to more

efficient planning and hence faster, cheaper execution.

The disadvantages mainly fall on the project. It is no longer possible to give one contractor full EPCM responsibility, and a method therefore needs to be worked out to allow hand over and hand back of responsibility for installation of construction work for the project. There is also the challenge of how to hand over responsibility, and the issue of pre-turnaround work that spills into the turnaround window.

Case study: contract strategy

A project team had awarded an EPCM contract for a project without consulting the site turnaround team (which, in any case, had not been formed at that time). At the start of turnaround preparations, the turnaround team proposed Option 4 as a contract strategy. The EPCM contractor balked at the change in execution strategy and refused to take any responsibility for project completion dates or for installation quality, because part of the contractor’s construction control (the turnaround window) was being removed. The turnaround team was eventually forced to revert to Option 1.

Option 5: project team manages all execution window construction
One final, but extremely rare option is when the project scope dwarves the turnaround scope, and so the decision is made to allow the project to manage all of the turnaround, as well as the project scope.

The obvious disadvantages with this are firstly, that the project team is unfamiliar with the imperatives of achieving a fast turnaround; and secondly, that the turnaround scope may be given lower priority than the project scope.

Using different contractors for pre-, during, and postturnaround field work

If Options 1, 3, or 4 are chosen, there is a possibility that different contractors will be working on the same type of discipline work, at different times. In that case, it is important to check that no issues arise around such topics as:

  • Different pay rates or employment rules (such as drug/alcohol testing regimes)
  • Different material supply agreements. (For instance, does the project team assume the contractor will supply pipe supports, while the turnaround team assumes it will free issue everything to the contractor; similarly, are there issues with scaffold supply or crane supply?)

Engineering job-pack development


Unless Option 1 has been chosen as the contract strategy, at some point the project team will need to hand over the engineering job-pack information to the planners and schedulers and the contractors for the execution phase.

Two issues related to job-packs need to be covered to enable strong integration, the delivery of the job-packs, and the format the job-packs will take:

Job-pack delivery dates
The turnaround planners will need to receive job-pack information from the project team in sufficient time to allow them to develop the plans and work with the schedulers to develop the overall schedule for the execution window.

Job-pack format

Project engineering offices tend to structure their work and develop engineering infor­mation in a format different from that produced by turna­round teams. It will be important to agree with the project team on a format that is understandable to the turna­round planners and is sufficiently similar to the turn­around scope to ensure that the execution contractors are not confused by having to deal with different formats.

Issues to consider include:

·         How small are the ‘chunks’ that the work needs to be broken into to constitute a single job-pack? (One piping system? One isometric in that system? One valve installation in that isometric?) Projects typically tend to prepare work in larger ‘chunks’ than turna­round teams.

·         What information should be included in the job-pack? (Drawings? Material take-off? Photographs?)

·         To what level of detail are the work instructions to be broken down? (Minute-by-minute? In fine detail?)

Case study: job-pack format

A project team was requested by the turnaround team to provide the turnaround execu­tion work in a turnaround ‘job-pack’ format. The project team pointed out that this was different from their contractor’s normal working practice and was extra work, which was not in the project budget. The turn­around team ended up accepting the project work ‘as-is’ and converting the docu­ments into job-packs itself, at significant extra cost to the turnaround.

Material procurement and material handling

Again, unless contract strategy Option 1 has been chosen, there will be issues to deal with related to material supply for the execution phase.

Material procurement delivery dates

The project team will need to be able to report progress in procuring materials for the execution phase, in order to give the turnaround team confi­dence that materials will be ready in time for use. As part of this, there will need to be agree­ment on target delivery dates for material for prefabrication and for field installation.

Material handling

If the same contractor is install­ing both project and turnaround scope during the shutdown phase, the mechan­ics of how the contractor will receive the material will need to be agreed upon. In essence, does the contractor fetch mate­rial from one ‘event’ warehouse, or is he expected to fetch project material from one warehouse and maintenance from another? (In which case, how does he know when to go to either warehouse?)

A single ‘event’ warehouse is preferred, but the problem then becomes when and how does material bought by the project move into the ‘event’ ware­house? (For example: who receives material? Who carries out positive material identifica­tion (PMI)? Who pays for the storeman? Where is the responsibility handover for safekeeping?)

Material supply

One common issue to watch for when using the same contractor for both mainte­nance and project work is to ensure continuity across contract conditions. This includes decisions about whether all material is supplied or whether some smaller, bulk material (such as pipe supports) are expected to be supplied by the contractor. (This also ties into the job-pack contents description.)

Project field organisation

Unless contract strategy Option 1 has been chosen, there will need to be a discussion around how involved the project team is in the field execution work during the shutdown:

·         Does the project still provide supervisors?

·         How does the project engi­neering office handle site queries and scope change requests?

·         In the case of Option 4, what happens to the project construction team during the shutdown? Do they go on holi­day for the duration? Or can they be seconded to the turna­round execution team to help as additional supervisors and workers?

QA/QC, PSSR, and handover

Unless contract strategy Option 1 has been chosen, there will need to be agreement on the format of paperwork for qual­ity checks, safety checks, and handover of responsibilities back from the turnaround to the project or to operations. This will include discussion of how to carry out:

       Yellow line checks of installed work

       Pre-start-up safety reviews (PSSR)

       Handover project/turna­round/operations.

Case study: handover

When the time came to finish the turnaround and begin handing back the plant to oper­ations, it was discovered that the project work was using different handover documenta­tion to that used by the turnaround team, resulting in a delay of more than two weeks while the correct certificates and signatures were tracked down.


If contract strategy Option 1 is chosen, there will undoubtedly be a temptation for the turna­round and the project(s) to develop their own construction

But even with this, the least integrated of contract options, there should still be some discussion to ensure alignment on:

       Start and finish dates

       Simultaneous Operations (SIMOPS) with operations during shutdown, startup, and for any running plant during the turnaround

       Avoiding constructability and workface congestion between the turnaround work­force and the project(s).

If another contract option is chosen, the question then arises of who develops the schedule for the field execu­tion work? Typically, it is the turnaround team who does this, but then there needs to be agreement from the project(s) on when they will provide scheduling information and what format that information will take:

       Does the project develop a plan and schedule, then hand it to the turnaround for integra­tion? Or does the project merely give the turnaround the job-pack planning steps?

       What is the work-breakdown structure to be used for the schedule?

       What sizes of work activities are tolerated? (Turnarounds generally do not like activities that extend over more than one shift, but projects can write schedules with multi-day long activities.)

       What software will the sched­ule be developed in? Primavera P6? Microsoft Project?

All of these issues need to be resolved early if problems are to be avoided later on.

Align dates

The project and the turnaround team will need to align on key dates for the turnaround event. No matter which contract option is chosen, this will include:

       Finish of pre-turnaround field work (The turnaround will typically want a ‘no fly zone’ requiring all other major work, including project instal­lation work, to end several weeks before the start of the turnaround.)

       Start of shutdown

       End of shutdown.

       In the case of contract strat­egy Options 2-4, this will also include such dates as:

       Contract enquiry and award

       All project job-packs issued as approved for construction (AFC)

       All project material delivered to site for prefabrication

       All project material delivered to site for field execution

Project cost estimate

The project cost estimate will need to take account of the split of work into pre-turna­round, during turnaround, and post-turnaround, including taking account of the contract strategy and the different shift pattern and pay rates during turnaround execution.

Unless contract strategy Option 1 has been chosen, the turnaround and project teams will also need to agree on how the common costs during execution will be split (scaf­fold, temporary facilities, cranes, and so on). The usual method here is to agree to a pro-rata system. However, this then requires a rough idea of turnaround work quantities at the time the project team is developing its project estimate.

Project progress tracking and reporting

Except in the case of contract strategy Option 1, the turna­round manager will seek confirmation prior to the turna­round that the project(s) will be ready on time. Similarly, during the turnaround, the project manager(s) will want confirmation that work will be handed back for post-turna­round work on time and to the correct quality.

Prior to the turnaround

In order to provide confirma­tion to the turnaround manager that the project(s) will be ready on time, the project team needs to be able to report progress on:

       Delivery of shutdown execu­tion job-packs

       Delivery of shutdown prefabrication material

       Delivery of shutdown execu­tion material

       Completion of pre-turna­round field work.

During the turnaround

Similarly, in order to provide confirmation to the project manager(s) that work will be handed back for post-turna­round work on time and to the correct quality, the turnaround team needs to be able to report progress on:

• Field installation

• PSSR and handover checks.

How to achieve good capital integration

So far we have discussed what should be addressed in order to achieve good integration of capital project work into a turnaround. Now we turn to a discussion of how and when this integration work should be addressed.

The premise/framing document

The first point to note is that integration starts when the site or corporate leadership and steering committee(s) for projects and turnaround are formulating their premise or framing documents. As mentioned earlier, the project and turnaround documents should both address the ques­tion of optimising the scope in the turnaround (which, in the majority of cases, means mini­mising the scope in the turnaround). The turnaround document should also specify the projects (as defined by the long range plan) that will be included in the turnaround event.

Alignment on performance objectives

A good method of ensuring that the turnaround team and the project team(s) have a vested interest in the success of each other is to ensure that each team’s ‘success’ criteria reflect the other team’s success criteria. (An example might be to ensure that the project has a success criteria that relates to avoidance of over-run on the turnaround schedule, or mini­mising the turnaround schedule.)

Case study: alignment on performance objectives

A site had settled on Option 1 as its contract strategy, but had overlooked the fact that the project assumed the same working conditions during the shutdown period as during the pre-turnaround period. The project key performance indi­cator was the mechanical completion of the project, not the end of the turnaround. The project was under instruction to minimise costs and had no incentives to aid the turna­round in meeting the turnaround start-up date. Until this was noticed, the project was planning on working single shift, with normal pay rates, and was ignoring the effect this might have on the turnaround start-up date.

Developing an integration plan

The second issue is that soon after the start of the concept phase (for either the turna­round or the project, whichever comes first), the essential topics listed earlier in this article should be discussed, and agreement should be reached on the path to be taken for each topic. These agreements should be documented in an integration plan for the turna­round event, and then the turnaround leadership and the project leadership should sign their acceptance and agreement.

The vital point is that this agreement must be reached before the project schedule and estimate is finalised.

Integrate every project

A common error on sides where there are multiple project agencies involved for major projects, minor projects, and small management of change (MoC) projects is that there is a tendency to reach agreement with some, but not all, project agencies.

It is vital that project manag­ers from each project should sign on to the integration agreement.

Case study: integrate every project

A turnaround team had capital project work from three differ­ent groups to include in its work scope: very small, ‘management of change (MoC)’ projects engineered by the maintenance group, minor projects engineered by an on-site project group, and major projects engineered by a corporate group remote from the site. The turnaround team felt that their integration work was good because they had obtained integration agreement with the MoC and minor project teams. But they had only obtained integration agreement with two out of three major projects. The third major project refused to engage and, consequently, was simply ignored by the turnaround. As the turnaround window approached, this omission manifested itself in numerous planning and scheduling issues.

Attendance at progress meetings

As in any organisation, communication is key. In addition to the progress reporting mentioned earlier, a representative of each project should attend the weekly turn­around progress meetings. The representative does not need to be the project manager and does not need to have full authority for decisions regard­ing the integration of the project into the turnaround. However, they must be suffi­ciently aware of all that is going on in the project that might affect the turnaround; hence, a project engineer is a good choice.

Steering committee support

It was mentioned earlier that failure to sufficiently integrate projects into the turnaround was cited by turnaround teams as one of the top three reasons for turnaround failure. Another of those top three reasons is having an ineffective turna­round steering committee.

Any effective turnaround steering committee will be focused on ‘R3S’, or:

       Resources – providing suffi­cient quality and quantity of resources to the turnaround team for the task at hand.

       Readiness – monitoring the progress of the turnaround team in preparing for the turn­around; ensuring that the turnaround team adheres to a formal turnaround work process.

       Risks – monitoring the key risks for the turnaround and their mitigation by the turna­round team.

       Scope – monitoring the gather, challenge, and control of scope.

Each of these four elements is inextricably bound up with integration of projects into a turnaround.

Resources – project representation

The turnaround steering committee needs to provide the management ‘bridge’ for the turnaround leadership to be able to contact and achieve progress with corporate major project teams and their off-site project steering committees. The turnaround steering committee also needs to provide the link with the project groups that are based on site. In order to achieve this, there must be major and minor project representation on the turnaround steering committee (and it helps to have turna­round representation, or at least site representation, on the project steering committee).

Readiness – project integration activities in the work process

Any good turnaround work process will include activities designed to ensure that the integration plan is pulled together in good time, formal­ised, agreed upon, and adhered to. A key role of the turna­round steering committee is to monitor and verify the adequate on-time completion of these activities. (The project steering committee should also be verifying that the project team work process addresses integration issues.)

Risks – include the integration risks

The turnaround risk register should include risks to the entire ‘event’, not merely the maintenance, cleaning, and inspection elements. As such, the register should include risks arising from project scope. (Risk mitigation efforts should also be coordinated in order to avoid duplication of effort.)

One very common risk that arises time and again is that projects are included in the turnaround premise that are insufficiently developed, thereby giving them insufficient time before the turnaround date to allow them to prepare. Therefore, there is a high risk that the job-packs will be issued as ‘approved for construction’ too late to give the turnaround planner, scheduler, and contrac­tor(s) enough time to prepare. AP-Networks has modelled the impact of issuing project job-packs late, on the predicta­bility of turnaround event cost and schedule outcomes. An example model outcome is shown in Figure 8. (Note that this outcome assumes no contributing impact from other areas of preparation being late.)

It is the responsibility of the turnaround steering committee to ensure that risks are mini­mised through careful consideration of the practicality of including projects – with their long preparation times – into the turnaround scope, and to weigh the risk versus the potential business reward.

Scope – control the project scope

The project and turnaro

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