3rd generation modularization by flour

COMPANY CONFIDENTIAL | © Copyright 2013. Fluor 1
3RD GENERATION MODULARIZATION AND
ITS APPLICATION TO LNG DISTRIBUTION
Barcelona LNG summit – October 2013

COMPANY CONFIDENTIAL | © Copyright 2013. Fluor
Presentation Outline
FLUOR INTRODUCTION
THE CURRENT STATUS OF CONSTRUCTION IN LNG PROJECTS
3RD GEN MODULAR EXECUTIONSM DESIGN AND EXECUTION
INTEGRATED EPFC SOLUTION
STANDARDIZATION AND REPLICATION
QUESTIONS
2

FLUOR INTRODUCTION
QUESTIONS
3

COMPANY CONFIDENTIAL | © Copyright 2013. Fluor 4COMPANY CONFIDENTIAL | © Copyright 2013. Fluor
Fluor Overview
• Fluor is the largest publicly traded
engineering, procurement, construction,
maintenance, and project management
companies in North America
• Over 1,000 projects annually, serving
more than 600 clients in 66 different
countries
• Workforce of over 42,000 men and
women executing projects globally
• Celebrated 100 years in 2012
Fluor Spain Office
• Revenue: $27.6 billion
• New awards: $27.1 billion
• Backlog: $38.2 billion

Worldwide Office Locations
under development
Years of Experience in Region
North
America
South
America
Europe Africa
Middle
East
Asia Australia
101 76 63 53 66 62 63
Tarragona
5

FLUOR INTRODUCTION
QUESTIONS
6

Investment Risks in LNG Projects
“The liquefied natural gas industry says that up to $150 billion in projects could be lost
to Australia unless the industrial relations system is overhauled and construction costs
are slashed within 18 months”
“Shane Wright Economics Editor, The West Australian Updated May 27, 2013, 2:50”
“For the coming decade, Alberta could experience a
labour shortage of approximately 114,000 workers.”
Ref: Employment Alberta 2010; Demand and supply outlook
“Canada is facing a shortage of construction workers over the next decade—the
industry will need to recruit in the order of 320,000 workers from 2011 to 2019”
Ref: HEAVY INDUSTRIAL CONSTRUCTION AND MAINTENANCE, WORKFORCE
CHALLENGES IN ALBERTA, MAY, 2011
7

Asia Pacific
Latam
Europe
8
Australia
- Cost of Labour
Canada
- Need to replace US consumer
- Insfrastructure Costs
- Remote / Labour Costs
Mozambique
- Labour
Gulf of Mexico
- Shale Gas Bonanza providing feedstock to:
- LNG Projects
- Gas To Liquids
- Petrochemicals
- Power
- Issues with finding Qualified Construction
Labour
Recent Gas Discoveries

Case for the Construction Industry
to Act
Fact: Historical step-change productivity gains by manufacturing & ship-
building
Source: database of EU KLEMS Growth and Productivity Accounts: November 2009 Release, updated March 2011
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
1977 1982 1987 1992 1997 2002 2007
GrossValueAdd(GVA)perhourworked
Construction, Manufacturing & Total Industries Labor Productivity (1977-2007)
volume indices, 1977 = 100
Manufacturing
Total Industry
Construction

Why Has Manufacturing Improved?
10
Modular
Designs
Standard
Designs
Replicated
Designs

FLUOR INTRODUCTION
QUESTIONS
11

Need to Provide More Innovative
Solutions
12
To address client drivers of reduced capital cost for Oil, Gas and LNG
developments
To improve predictability of project execution, cost and schedule
results for Oil, Gas and LNG developments
Current project development and execution approaches are
“traditional” with still a significant level of site construction required.
This adds cost to projects and puts more risk on predictability of results

The Current Status of Modular
Design and Execution
• 1st Generation
Modular Execution
– Piperacks or PARs
13

The Current Status of Modular
Design and Execution
• 2nd Generation Modular
Construction Execution
– 1st Generation plus:
– Equipment or PAUs (Preassembled Units)
• Equipment on module
• Modules around equipment
– Pre-Dressed Vessels
– 40% of Equivalent Stick Built
Hours Relocated to Shop for
Steel / Pipe / E&I Work
COST ACCOUNT
Hours
Moved
Offsite
STRUCTURAL STEEL 65%
EQUIPMENT 21%
PIPING 53%
ELECTRICAL 25%
INSTRUMENTATION 15%
INSULATION 50%
14

Where Do We Need to Go?
• Modular Designs Which Maximize Movement of Hours Offsite
• “Modularization Drives Layout” not “Layout Drives
Modularization”
• “Standardized” not “Customized” Designs
• Maximum Collaboration Between Owner, Engineer,
Procurement, Construction, Project Management and
Fabricator
• Fluor developed Modularization Improvement Initiative
15

• Fluor has developed a 3rd Gen Modular ExecutionSM Methodology
– Past modular projects evaluated
– Offshore design methods evaluated
– Facility interconnections evaluated
– Power and control distribution evaluated
– All available technologies evaluated
• Patent Pending to protect intellectual property
Module Design Evolution - 3rd Generation

Work Process Introduction
Process Block Concept
• The work process starts with process engineering, who conceptually divides the
project into various process blocks (systems within a distinct geographical
boundary).
• The process blocks will vary by plant type. We have developed standard blocks
for typical in situ projects, for example: oil treating, water treatment, steam
generation, etc
17

Work Process Introduction
Process Block Concept
18

Typical 3rd Gen Modular Execution SM
Process Facility Using Process Blocks
19

©2010 Fluor Corporation. All rights reserved.
3rd Generation MCCs -
part of the Process Blocks
2nd Generation MCCs in
Substations
Connected with U/G Power Feeders
One feeder cable per MCC
Smaller Main
Substation
3rd Generation Execution Power Distribution
Power cables for each load run back
to Substations along Piperacks
2nd Generation: 20% Electrical Equipment
and Wiring on Modules
3rd Generation: All Electrical Equipment
and Wiring on Modules Terminated
(Excluding UG HV Distribution)
20

Material Handling Strategy
CA20110438001
21
Copyright © 2011 Fluor Corporation. All Rights Reserved.
21

Typical 2nd Generation Modularized
Plot Plan Upstream Heavy Oil
(In Situ) Facility
Approximate Plot Area = 200,000 Square Meters

Typical 3rd Gen Modular ExecutionSM
Plot Plan-Upstream Heavy Oil (Insitu) Facility
Approximate Plot Area = 84,000 Square Meters

Taking the Modularization to the
Next Level.
3rd Gen Modular
ExecutionSM
moves 60 to
80% of the
labour offsite
24

Impact of 3rd Generation
Execution Methods
• Cost Competitive Solution Providing a Competitive Advantage
– Lowers Over TIC of Project by Optimizing Plot and Reducing Quantities (up to 20% TIC
Reduction)
– Lowers Over TIC of Project by Moving Work Offsite to a More Productive and Cost Competitive
Location
– Lowers Over TIC of Project by Reducing Field Indirect Costs
• Provides Execution Methods which Provide for Cost and Schedule Certainty
– Places Emphasis on Early E&I Design Mitigating E&I Rollout at Site
– Forces Engineering to Work as a Team for More Cost effective Design
– Can Provide Schedule Reduction opportunity Particularly for Revamps
• Can Provide Environmental Advantage by Reducing Facility Footprint
• Reduces Safety Risks by Reducing Site Labour
– Value Added Design Method for Brownfields/Revamp Work
• Can be Repeated and is Portable
25

Modular Execution
Risk Management
• Key Risks with a highly modular execution
– Modularization strategy and plan developed too late.
– Modules incomplete at shipment.
– Late engineering deliverables or late revisions.
– Steel and piping deliveries too late.
– Instrument, electrical and EHT materials late.
– Modules delivered late and/or in wrong sequence.
– Shop workload exceeds capacity.
• Mitigation Strategies In Place to overcome these:
– Application of Fluor Global experience in implementation of modular
execution projects has been critical to development of such strategies
26

Integrated EPFC Solution Required
27

3RD GENERATION MODULARIZATION ALLOWS STANDARDIZATION
• Lay Out Organized following Process Units
• Modules are “Plug and Play” and Associated to Process Units
• A Standard LNG facility can be created for a Range of LNG FEED conditions
adding or deleting “Process Units” and therefore modules
• An Envelope of Civil and Seismic Conditions needs to be assumed if the
design will go into several locations.
• 3rd Generation allows customization to Specific Site conditions adding or
removing Standard Modules
Standard Designs (Standardization)

ADVANTAGES
• Lowers cost of equipment and bulks
• Reduces Procurement cycle time
• Reduces overall EPFC schedule
• Provides Consistent Results
• Reduces Operator Training Time and Costs
• Reduces Maintenance Costs

RISKS
• Culture to Customize and Optimize
• Process FEED Change Beyond Standard Range
• Technology Improvements

3rd Gen Modular ExecutionSM
Current Projects
• Shell Quest Project – CO2 Capture Project - Currently in Construction
• Shell Muskeg River Debottlenecking Project - Implementing 3rd Gen Modular
ExecutionSM Where Practical – End of FEED transitioning into Execution
• Nexen’s Kinosis K1B SAGD – In FEL 2
• Suncor MacKay River 2 SAGD – in FEED
• Suncor Fort Hills U&O – End of FEED
• Devon Pike SAGD – in EDS
• Conoco Phillips 3rd Gen Modular ExecutionSM Study for Future In Situ Projects
(Templating) Including Surmont 3 – Study complete
• Multiple Confidential SAGD Clients – FEL 2
• NWR Hydroprocessing, C&V and LC finer silo’s – Finalizing FEED
• Williams PDH – in FEED
• LNG Projects:
– Liquefaction
– Small Scale Regasification – FEL 2
31

What is the Impact?
32
It Will Look Different!
Be Prepared for Change!
Be Prepared to Collaborate!
Executing Using the Same (Traditional)
Methods Will Produce the Same Results!

Questions and Answers
33

Contact Information
– Jorge Villeta
• Fluor S.A.
• Jorge.Villeta@Fluor.com
• +34915366407
– Enrique Alonso
• Fluor S.A.
• Enrique.Alonso.Sanchez @Fluor.com
• +34915365968
34

Acknowledgements
Fluor´s team presenting would like to thank to Fred Haney, Subject Matter
Specialist of Modularization, promoter and inventor of the 3rd Generation
Modularization within Fluor for the presentation materials provide to make
This presentation feasible
35

COMPANY CONFIDENTIAL | © Copyright 2013. Fluor 36
This presentation has been prepared by and remains the
sole property of Fluor S.A., a wholly owned subsidiary of
Fluor Corporation.
Client agrees, by its acceptance or use of this document,
to return it upon Fluor’s request, and not to reproduce,
copy, lend, or otherwise disclose or dispose of the
contents, directly or indirectly, and not to use them for
any purpose other than that for which it was specifically
furnished.

3rd generation modularization by flour

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