Modularisation – The Next Step - Presentation by Bill Meyer, Foster Wheeler USA Corporation
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Transcript of Modularisation – The Next Step - Presentation by Bill Meyer, Foster Wheeler USA Corporation
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
William (Bill) Meyer -
B.E. (Civil) Hons., MBA.
Director Project Execution Development
Foster Wheeler USA Corporation
Houston, Texas.
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Topics
1. Where is modularisation going? Is there a trend?
2. What is the optimum size of module? Are larger modules
better?
3. What impacts are tomorrow’s modules likely to have on
construction?
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Agenda
1. Introduction
2. Historical Perspective – Past Trends
3. Understanding why – Cost / benefit and decision
process
4. Optimising module sizes
5. Summary
6. Q & A
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Accent
� Australian
University of Melbourne
� Bachelor of Engineering (Civil) Honors
� MBA
Work
� ½ as specialist Heavy Lift and Transport contractor
– Vice President Mammoet USA
� ½ Foster Wheeler – Engineering, Procurement, Construction contractor
– Director Project Execution Development
– Focus on major project construction execution and project management
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
� Global Engineering and Construction Contractor and Power Equipment Supplier
� In business for over 100 years
� Strong history in technology development
� Proven track record of successful project execution
� A global presence
� Over 13,000 resources
� Permanent offices in 28 countries
� Financially strong
Foster Wheeler
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Registered Office & Corporate CenterOperating Unit HQs and/or Main Engineering CenterRegional/Local Engineering CenterSales Offices
Bogota
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Topics
1. Introduction
2. Historical Perspective – Past Trends
3. Understanding why – Cost / benefit and decision
process
4. Optimising module sizes
5. Summary
6. Q & A
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Historical Perspective – past trends
Statoil Mongstad – Norway - 1988
� 221 modules
� 975 tonnes max module
� 6 module yards
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Historical Perspective – past trends
Statoil Mongstad – Norway - 1988
� 221 modules
� 975 tonnes max module
� 6 module yards
� Schedule driven
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Historical Perspective – past trends
Mobil Coryton – UK - 1993
� Isomerisation unit
� 58 Modules to 350 tonnes
� Barge delivery from one European fabricator
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Historical Perspective – past trends
Mobil Coryton – UK - 1993
� Isomerisation unit
� 58 Modules to 350 tonnes
� Barge delivery from one European fabricator
� Schedule driven
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Historical Perspective – past trends
ExxonMobil Singapore Aromatics - 1996
� 213 modules – 26,875 tonnes total
� 1150 tonnes max
� 7 module yards
� 39 barge voyages
� Schedule driven
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Historical Perspective – past trends
Inco Goro – New Caledonia - 2006
� Nickel mine and ore processing plant
� 599 modules
� 600 tonnes max
� 2 main module
yards
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Historical Perspective – past trends
Inco Goro – New Caledonia - 2006
� Nickel mine and ore processing plant
� 599 modules
� 600 tonnes max
� 2 main module
yards
� Cost driven
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Historical Perspective – past trends
The Woodside-operated NWSV Phase V LNG Expansion – Australia – 2007
� 75 modules
� 1,800 tonnes max
� Pluto currently nearing completion
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Historical Perspective – past trends
The Woodside-operated NWSV Phase V LNG Expansion – Australia – 2007
� 75 modules
� 1,800 tonnes max
� Pluto currently nearing completion
� Cost and schedule driven
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Historical Perspective – past trends
1. Pre circa 2000, main reason to go modular was for schedule benefits
2. More recently, cost benefits have been the aim
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Topics
1. Introduction
2. Historical Perspective – Past Trends
3. Understanding why – Cost / benefit and decision
process
4. Optimising module sizes
5. Summary
6. Q & A
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Viable Modular Execution
Benefits > Price you have to pay for those Benefits
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Viable Modular Execution
Benefits > Price you have to pay for those Benefits
AND
Risk of NOT achieving those Net Benefits is Low, Manageable &
Risk Goals are Achievable
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Modular Execution Benefits can be:
1. Cost reductions
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Modular Execution Benefits can be:
1. Cost reductions
2. Schedule reductions
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Modular Execution Benefits can be:
1. Cost reductions
2. Schedule reductions
Profit
Compliance
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Modular Execution Benefits can be:
1. Cost reductions
2. Schedule reductions
3. Safety enhancements
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Modular Execution Benefits can be:
1. Cost reductions
2. Schedule reductions
3. Safety enhancements
4. Quality enhancements
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Modular Execution Benefits can be:
1. Cost reductions
2. Schedule reductions
3. Safety enhancements
4. Quality enhancements
5. Reduced impact on Society
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Modular Execution Benefits can be:
1. Cost reductions
2. Schedule reductions
3. Safety enhancements
4. Quality enhancements
5. Reduced impact on Society
6. Reduced impact on Environment
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Modular Execution Benefits can be:
1. Cost reductions
2. Schedule reductions
3. Safety enhancements
4. Quality enhancements
5. Reduced impact on Society
6. Reduced impact on Environment
7. And many more…
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Decision Analysis – Modular or Stick built?
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Project
PhaseFEL 1
Conceptual FEL 2
Assess FEL 3
Define
Execution FEL 5
Evaluation
FEL 4
Evaluate Module Options
Modular Execution Decision
Timing is Critical
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
e.g. OSBL piping in existing racks
Major storage tanks
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Site Survey includes
• Labour
Availability, productivity, quality, craft availability, cost, other projects in area, union impacts, regional / political issues etc
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Labour Productivity
0
1000
2000
3000
4000
5000
6000
7000
8000
0 12 24 36 46 50 50 50 56 64 72 80 88 96 104
112
120
128
136
144
Graph 1 - Labor vs time (% of project schedule) – Direct hour impact if productivity shortfall of trainees
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Result of productivity shortfall
0
1000
2000
3000
4000
5000
6000
7000
0 12 24 36 46 50 50 50 56 64 72 80 88 96 104
112
120
128
136
144
Graph 2 - Labor vs time (% of project schedule) – Schedule impact if productivity shortfall of trainees
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
0
1000
2000
3000
4000
5000
6000
7000
0 12 24 36 46 50 50 50 56 64 72 80 88 96 104
112
120
128
136
144
Graph 4 - Labor vs time (% of project schedule) – Manhours moved offsite
Move manhours offsite to pre-cast, pre-fab, pre-
assembly and modules
Skilled Labour Availability – Move manhours Offsite
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Site Survey includes
• Labour
• Weather impacts
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Site Survey includes
• Labour
• Weather impacts
• Logistics
On site and to site, route surveys, from fabrication yard, cost and technical capabilities, laydown areas
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Site access restrictions can limit size of modules that can be
delivered to site
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Logistics are project specific -
– Some sites have their own ports …
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Logistics are project specific -
… others are road access only
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Site Survey includes
• Labour
• Weather impacts
• Logistics
• Environmental impact
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Site Survey includes
• Labour
• Weather impacts
• Logistics
• Environmental impact
• Safety
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Site Survey includes
• Labour
• Weather impacts
• Logistics
• Environmental impact
• Safety
• Permit issues
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Site Survey includes
• Labour
• Weather impacts
• Logistics
• Environmental impact
• Safety
• Permit issues
• Etc.
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Module Yard Survey includes
• Labour
Productivity, cost, flexible workforce, skills, experience etc
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Relative Costs to Fabricate Modules and Ship to Project X site
Italy
USA
USA
Japa
nKor
eaKor
eaKor
eaFra
nce
Mex
ico
Mal
aysi
aSin
gapo
reSin
gapo
reM
alay
sia
Philip
pine
sTha
iland
Chi
naC
hina
Vietn
amC
hina
Project and Site Specific
Calendar Date Specific
Module Yard Specific
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Module Yard Survey includes
• Labour
• Yard capabilities
Covered fabrication, assembly area, loadout capabilities, management skills and experience, procurement capability, drafting capability, quality systems, safety records etc
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Module Yard Survey includes
• Labour
• Yard capabilities
• Size of client management team
required
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Module Yard Survey includes
• Labour
• Yard capabilities
• Size of client management team
required
• Shipping type and distances to site
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Module Yard Survey includes
• Labour
• Yard capabilities
• Size of client management team
required
• Shipping type and distances to site
• Weather
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Module Yard Survey includes
• Labour
• Yard capabilities
• Size of client management team
required
• Shipping type and distances to site
• Weather
• Political factors
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Module Yard Survey includes
• Labour
• Yard capabilities
• Size of client management team
required
• Shipping type and distances to site
• Weather
• Political factors
• Etc
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Will impact possible module sizes Type of plant
Scale of plant
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Will impact possible module sizes Type of plant
Scale of plant
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Economics of Modular Execution
For the cost estimates of stick and modular
Need only to focus on DIFFERENTIAL COSTS between stick built
and modular execution
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Downside
� Increased cost of steel / minor bulks / foundations
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Downside
� Increased cost of steel / minor bulks / foundations
� Increased cost of shipping
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Downside
� Increased cost of steel / minor bulks / foundations
� Increased cost of shipping
� Potentially - increased cost of transport and installation
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Downside
� Increased cost of steel / minor bulks / foundations
� Increased cost of shipping
� Potentially - increased cost of transport and installation
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Downside
� Increased cost of steel / minor bulks / foundations
� Increased cost of shipping
� Potentially - increased cost of transport and installation
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Downside
� Increased cost of steel / minor bulks / foundations
� Increased cost of shipping
� Potentially - increased cost of transport and installation
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Downside
� Increased cost of steel / minor bulks / foundations
� Increased cost of shipping
� Potentially - increased cost of transport and installation
� Increased cost of Engineering
� Increased cost of client yard management
� Increased cost to set modules / extra field welds / hydro
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Upside
� Move labour cost offsite to cheaper / more productive laboursupply
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
-
20,000
40,000
60,000
80,000
100,000
120,000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33
months
-
20,000
40,000
60,000
80,000
100,000
120,000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33
months
Manhours moved offsite on a past modular project
Site Prep Civil Structural / Mech / Equip Piping E & I Indirects
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Upside
� Move labour cost offsite to cheaper / more productive laboursupply
� Reduce indirect costs at site as less directs (construction supervision, consumables etc)
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Upside
� Move labour cost offsite to cheaper / more productive laboursupply
� Reduce indirect costs at site as less directs (construction supervision, consumables etc)
� Reduced cost of camp construction due to lower peak
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Upside
� Move labour cost offsite to cheaper / more productive laboursupply
� Reduce indirect costs at site as less directs (construction supervision, consumables etc)
� Reduced cost of camp construction due to lower peak
� Improved productivity (weather, flexible workforce, site accessibility, material flows, etc)
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Upside
� Move labour cost offsite to cheaper / more productive laboursupply
� Reduce indirect costs at site as less directs (construction supervision, consumables etc)
� Reduced cost of camp construction due to lower peak
� Improved productivity (weather, flexible workforce, site accessibility, material flows, etc)
� Reduced schedule reduces construction indirects
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Upside
� Move labour cost offsite to cheaper / more productive laboursupply
� Reduce indirect costs at site as less directs (construction supervision, consumables etc)
� Reduced cost of camp construction due to lower peak
� Improved productivity (weather, flexible workforce, site accessibility, material flows, etc)
� Reduced schedule reduces construction indirects
� [Positive impact to NPV if revenue stream begins earlier]
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Neutral
� Shipping of module materials to yard versus shipping to site
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Neutral
� Shipping of module materials to yard versus shipping to site
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Module
versus
Stick built
Cost
Differentials
Modular versus Stick built costs
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
$90.0
$100.0
Modular Cost Stick built Cost
Installation cost ∆
Shipping cost ∆
Const. Mngmt cost ∆
Foundation cost ∆
Steel cost ∆
Engineering cost ∆
Camp cost ∆
Labour cost
Savings
Mill
ion
s $
Existing Project Data
(Note – All projects have different cost drivers )
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Marginal Cost of Construction
Marginal Cost of Construction / manhour =
Wages for Direct Labour
+ Indirect Labour (incl Inspection and QA)
+ Payroll Burdens / Benefits / Allowances / Premiums /
Camp Costs / Subsistence for Direct and Indirect Labour
+ Management Costs / Field Offices / Indirect Facilities
+ Construction Equipment / Small Tools and Consumables
+ Scaffold
+ Stick Built Materials Laydown and Distribution
+ ETC
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Benefits
Construction
Site
Labour Productivity 2.20
Marginal Cost of Construction / mh $105.00
Relative Manhour Cost c/w Gulf Coast $231.00
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Benefits
Construction Module
Site Yard
Labour Productivity 2.20 1.20
Marginal Cost of Construction / mh $105.00 $55.00
Relative Manhour Cost c/w Gulf Coast $231.00 $66.00
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Benefits
Economic Productivity Factor
Construction Module
Site Yard
Labour Productivity 2.20 1.20
Marginal Cost of Construction / mh $105.00 $55.00
Relative Manhour Cost c/w Gulf Coast $231.00 $66.00
Economic Productivity Ratio 3.50 : 1
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Benefits
Economic Productivity Factor using a Far East Module Yard
Construction Module
Site Yard
Labour Productivity 2.20 3.50
Marginal Cost of Construction / mh $105.00 $12.10
Relative Manhour Cost c/w Gulf Coast $231.00 $42.35
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Benefits
Economic Productivity Factor using a Far East Module Yard
Construction Module
Site Yard
Labour Productivity 2.20 3.50
Marginal Cost of Construction / mh $105.00 $12.10
Relative Manhour Cost c/w Gulf Coast $231.00 $42.35
Economic Productivity Ratio 5.45 : 1
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost Benefits
Economic Productivity Factor
Construction Module
Site Yard
Labour Productivity 2.55 3.50
Marginal Cost of Construction / mh $125.00 $12.10
Relative Manhour Cost c/w Gulf Coast $318.75 $42.35
Economic Productivity Ratio 7.53 : 1
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Modular versus Stick built costs
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
Modular Cost Stick built Cost
Installation cost ∆
Shipping cost ∆
Steel cost ∆
Engineering cost ∆
Camp cost ∆
Labour cost
Modular versus Stick built costs
Modular Cost Stick built Cost
Installation cost ∆
Shipping cost ∆
Steel cost ∆
Engineering cost ∆
Camp cost ∆
Labour cost
Modular versus Stick built costs
Modular Cost Stick built Cost
Installation cost ∆
Shipping cost ∆
Steel cost ∆
Engineering cost ∆
Camp cost ∆
Labour cost
COST DRIVEN MODULAR
PROJECT
SCHEDULE DRIVEN
MODULAR PROJECT
COST DRIVEN STICK BUILT
PROJECT
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Agenda
1. Introduction
2. Historical Perspective – Past Trends
3. Understanding why – Cost / benefit and decision
process
4. Optimising module sizes
5. Summary
6. Q & A
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Manhour Density is Key
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Manhour Density is Key
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Manhour Density is Key
� The more manhours in a given shipping volume, the greater the cost benefit to moving those manhours offsite.
� This benefit must outweigh the cost to ship those manhoursback to site.
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Cost of module shipment vs. module “size”
Co
st
($ m
illi
on
)
Module size / weight Large
Lin
er
serv
ices
Specialist Heavy Lift
Ships
Semi-Submersibles
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Manhour Density is Key
� The more manhours in a given shipping volume, the greater the cost benefit to moving those manhours offsite.
� This benefit must outweigh the cost to ship those manhoursback to site.
� Second order effects then must be taken into account, such as extra steel costs, site transport and installation costs etc.
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Manhour Density is Key
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
� Identify the labour intensive sections on the site…(highlighted red)
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
� Aggregate where feasible…
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
� Construct off-site
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Interconnectivity factors
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Interconnectivity factors
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Interconnectivity factors
�� Additional hookup at the interfaceAdditional hookup at the interface
�� Additional ship spaceAdditional ship space
�� Additional Installation costsAdditional Installation costs
�� Delta steelDelta steel
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Interconnectivity factors
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Interconnectivity factors
�� Additional hookup at the interfaceAdditional hookup at the interface
�� Additional ship spaceAdditional ship space
�� Additional Installation costsAdditional Installation costs
�� Delta steelDelta steel
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Vertical and horizontal splits for this CCR
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Agenda
1. Introduction
2. Historical Perspective – Past Trends
3. Understanding why – Cost / benefit and decision
process
4. Optimising module sizes
5. Summary
6. Q & A
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Summary
1. Where is modularisation going? Is there a trend?
� More modularisation is the trend for jobs in high labour
cost areas / low quantity of skilled labour areas
� Trend will be driven by demand for resources and energy
� Market segment dependant
� BRIC – IC low , BR depends on location of site and yards
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Summary
2. Are larger modules better?
� Depends on plant scale and type / shipping
distances and costs / logistics constraints
� Relative costs of shipping vs. big / small / splitting
� For any given shipping cost curve – typically yes!
� Manhour density of plant modules > breakeven
� Height of C. of G!
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
Summary
3. What impacts are tomorrow’s modules likely to have on
construction?
� In general – reduces construction risk (but shifts it to E&P)
� Construction equipment
� Technology exists to move and install large loads
� Crane size development driven by larger equipment items
and need for longer reach, not primarily module sizes
� Innovation is still key!
Feb 2011Bill Meyer
Modularisation – The Next Step
© 2011 FOSTER WHEELER. All rights reserved.
ANY QUESTIONS ?