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Piping: Minimizing the Risk of ‘Pre-buys’

By Stephen Wyss Bechtel Oil, Gas and Chemicals |

To stay on budget, major capital projects often call for aggressive schedules. Engineering, procurement and construction (EPC) contractors often end up using work processes that are not part of an established or standard work procedure. This is especially true when it comes to acquiring materials to support the schedule, particularly for critical paths related to the piping design, supply, fabricate and erect processes. However, the risks associated with such an approach, given the complexity of materials required for large-scale piping configurations (Figure 1), can be significant. When additional costs are incurred in the range of tens of millions of dollars, profitable project execution may be imperiled. EPC contractors must acknowledge this risk, take steps to address it in order to minimize exposure, and be able to mitigate the inevitable surplus that will result. The major piping processes Phase complexity. Before we can appreciate why the risk is necessary, we need to understand the complexity of the process. The simple Level 1 schedule shown in Figure 2 demonstrates how the four major phases of the project — piping design, supply, fabricate and erect — overlap. Criticality of the design phase. The piping…
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