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The Owner Role in Capital Projects

By C. Delia Contreras Nalco Champion, an Ecolab company Fabio Bravo The Dow Chemical Company |

It is well known that the oil-and-gas, chemical and petrochemical industries are capital intensive. They require sophisticated facilities (plants), the installation of which are typically handled via capital projects that, regardless of size, require significant effort from a number of parties for execution. The investing or operating company is typically called the owner and, for a number of reasons discussed in this article, proper involvement of the owner is critical for capital project success. However, some owner representatives and even some owner companies take the approach of letting the engineering, procurement, construction (EPC) companies perform work with minimum involvement from the owner except for regular follow-up meetings. This is typically driven by either lack of resources in the owner’s organization or by a misconception that money is saved via this approach. The reality is that such an approach is typically a very expensive proposition. If this approach is taken during the front-end-loading (FEL) phase under a reimbursable contract, this may lead to one or several of the following problems: 1. Over-sizing in a number of areas as it is technically easier and reduces responsibility 2. Missed opportunities…
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