The document provides an overview of EPC (engineering, procurement, and construction) contracts. Key points include: 1) EPC contracts involve a single contractor who is responsible for design, procurement, construction, and sometimes financing of a project for a fixed price. 2) EPC contracts simplify communication for owners but carry more risk for contractors. 3) Successful EPC projects require clear scopes, specifications, schedules, and payment terms from owners, as well as diligent coordination from contractors. 4) EPC contracts are commonly used for large oil/gas, power, and industrial projects worldwide.

1. EPC OVERVIEW
stands for Engineering, procurement and
construction

2. EPC overview
EPC is
gaining
importance
worldwide. It
requires good
understandin
g by the
EPCC to
return a profit
An EPC
contract is a
complex
agreement.
In a global
context, EPC
management
is more
complex.
 EPC contract the contractor designs the
installation, procures the necessary materials
and builds the project, either directly or by
subcontracting part of the work. In some cases,
the contractor carries the project risk for
schedule as well as budget in return for a fixed
price, called lump sum or LSTK depending on
the agreed scope of work.[1]
 When the scope is restricted to engineering
and procurement, this is referred to as an EP,
E and P or E+P contract. This is often done in
situations where the construction risk is too
great for the contractor or when the owner does
the construction

3. Comparison of EPC/EPCM
 EPC company is able
to manage all levels
on site, with
Construction as well
 EPC contract is more
critical and destined
to the biggest
companies - it is
advantage indeed.
 EPCM company is
only managing build
site as a Site
Engineer (Supervisor
on behalf of final
customer.
 EPCM contract is
smaller type of
contract than EPC,
but safer for EPCM
company
EPCM (engineering,
procurement, and
construction management
EPC (engineering, procurement, and
construction )

4. IMPORTANCE OF EPC
An owner decides for an EPC contract for reasons that
include
 Reduced stress for owner
 easy work and growth of the company.
 Single point of contact for owner simplifies
communications.
 Ready availability of post-commissioning services
 Ensures quality and reduces practical issues faced in
other ways[clarification needed]
 Owner protected against changing prices for
materials, labor, etc.
 Cost is known at the start of the project

5. Owner defines to the EPC contract :
 Scope and the specifications of the plant
 Quality
 Project duration
 Cost
 The cost (the price to be paid to the EPCC) is
negotiated and finalised and paid in mutually
agreed installments.

6. Functions
Engineering Functions
 Initiation
 Planning
 Estimating ->
Request for Quote
 Design
Procurement
Functions
 Purchasing
 Expediting
 Receiving
 Invoicing

7. Construction Functions
 Construction Schedule
 On-site Material Handling
 Building Activities
 On-site Client Communications
 Closing

8. Projects Success by the owner and
the EPC contractor
Owner Defines
 Defines guarantees
well
 Defines scope and
quality very carefully
 Defines milestones
meticulously
 Defines LD/penalty
clauses
 Makes payment terms
very specific
EPC Contractor
improves
 Adopts similar terms
and conditions as
owner regarding
quality, guarantee
etc., for
subcontracts/vendors
 Do not keep terms
open-ended
 Coordinate vigilantly
to reduce chances of
errors at site.

9. Global arena
The EPCC
must have
data and
expertise in
all the
required
fields. Some
important
areas are
 Local market conditions for
materials and labour availability and
capabilities
 Local code, statutory etc.,
requirements
 Availability of local supervisory
personnel
 Availability of local engineering
services
 Local and global subcontractor
experience and performance

10. Cost Certainity & Owner
Responsiblity
 Cost certainty
 One main reason an owner may
prefer an EPC arrangement is
"certainty of cost". An EPC
contract binds the Contractor to
deliver the project at a firm,
predetermined price regardless
of any increase in costs that the
Contractor may incur after the
contract is signed. However,
changes to specifications
initiated by the owner (better
finishes for example) may be
incorporated through a "change
order". Here, the owner and the
Contractor negotiate the price to
make the changes and these
changes/prices are recorded in
the change order document
 Owner responsibility
 To ensure quality, the owner
must select an experienced EPC
contractor. A third-party or in-
house consultant can verify the
design of major structures and
inspect the main equipment
installations.
 Changes in scope of work can
affect project schedule, cost and
risk. Such changes are the
responsibility of the owner

11. EPC PROJECTS
OVERVIEW
Oil & energy projects

12. Oil and Gas Project
Categories
 Carbon Capture and Storage Facilties (11)
 Offshore Field Development (Drilling-Subsea)
(438)
 Offshore Production Facilities (127)
 Offshore Storage Facilities (1)
 Onshore Field Development (Drilling) (146)
 Onshore Production Facilities (112)
 Onshore Storage Facilities (7)
 Petrochemical and Chemical Refineries (128)
 Pipelines (57)
 Terminals (51)

13. Power and Energy Project
Categories
 Biomass/Energy Recovery Facilities (12)
 Carbon Capture and Storage Facilities (17)
 Coal-Fired Power Plants (75)
 Electrical Transmission and Distribution (21)
 Gas-Fired Power Plants (81)
 Geothermal Power Plants (4)
 Hydro Electric Power Plants (32)
 Nuclear Power Plants (127)
 Solar Power Plants (34)
 Wind Power (102)

14. Projects types
 Alumina Refinery (3)
 Boiling Water Reactor
(BWR) (7)
 Coal Export Terminal (1)
 Coal Seam Gas (2)
 Concentrators (2)
 Condeep (2)
 Condensate Field (9)
 Crude Oil Terminals (4)
 Drill Rig (11)
 Drill Ship (1)
 Fertilizer Plants (1)
 FPSO - Floating Production,
Storage and Offloading (25)
 LNG Terminal (13)
 Nickel Refinery (3) FSO -
Floating Storage and
Offloading (4)
 Gas Compression (1)
 Gas Field (73)
 Gas Processing (6)
 Gas To Liquids (GTL) Plants
(1)
 Heavy Lift Vessel (0)
 Jack Up Rigs (1)
 Jackets (9)

15. Projects Types
 Offshore Wind Farms (11)
 Oil Field (99)
 Oil Refinery (59)
 Oil Sands (12)
 Onshore Wind Farms (13)
 Open Pit Mine (55)
 Photovoltaic (12)
 Pipelay Vessel (5)
 Pressurised Water Reactor (PWR)
(10)
 Semi-Submersible (13)
 Shale Oil and Gas (2
 Slurry Pipeline (0)
 Solar Thermal (6)
 Solar Thermal - Dish and Sterling
(1)
 Solar Thermal - Fresnel (0)
 Solar Thermal - Parabolic (5)
 Solar Thermal - Tower (3)
 Solids Handling Facilities (1)
 Steel Plants (1)
 SURF Systems (6)
 Tailings (1)
 Tension Leg Platform (TLP) (6)
 Underground Mine (29)