Project Management Institute

Terminal velocity

BY TEGAN JONES

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Singapore LNG Corporation Terminal on Jurong Island, Singapore. The terminal began commercial operations on 7 May 2013.

PHOTO COURTESY OF SINGAPORE LNG CORPORATION

“Expansions were required to provide additional energy security to meet future domestic gas needs, and also to pursue new business opportunities in the regional market.”

—Peter Wood, SLNG, Singapore

Although it is one of the world's most highly developed economies, Singapore has a big vulnerability: energy dependence. The city-state's more than 5 million residents rely on imported natural gas for 90 percent of their electricity needs.

Lacking energy reserves of its own, Singapore has long depended on pipeline imports from its neighbors, Malaysia and Indonesia. With the island's power needs projected to rise, the Singapore government decided to act to more directly control its fuel supply. It also saw a longer-term opportunity to become a major trading hub for Asia's growing natural gas market. So in June 2009, it set up the Singapore LNG Corporation Pte Ltd. (SLNG) to develop, build, own and operate Singapore's first liquefied natural gas (LNG) terminal.

To deliver on its strategic goals, SLNG had to successfully plan and execute a terminal project that would accommodate the world's largest LNG vessels. (Natural gas is liquefied for storage and transport.) It began with a plan to build two storage tanks and a jetty for ship docking, in addition to regasification facilities that could process 3.5 million tonnes per annum of LNG. By November 2010, however, it was clear that this capacity was inadequate. At that point, the government asked SLNG to expand the project to include a third storage tank, a second jetty and additional facilities to increase the terminal's processing capacity to 6 million tonnes—all of which translated to a 40 percent increase in scope.

“These expansions were required to provide additional energy security to meet future domestic gas needs, and also to pursue new business opportunities in the regional LNG market,” says Peter Wood, vice president, projects and development, SLNG, Singapore. “We were in effect executing three projects with three different completion dates in parallel.” The first phase comprised the project's original scope, the middle phase delivered the additional terminal and the final phase was the additional jetty.

Proactive planning helped the team juggle these phases of the SGD1.7 billion project without dropping any balls. Fortunately, because the team recognized the potential need for expansion at the outset, it had designed the facility to be easily updated to meet growing demand.

“Tie-ins and utilities for future expansions were specified in the original contract, and these were utilized to install and service the additional LNG tank, pumps and vaporizers, and to connect the second jetty,” says Mr. Wood. (Vaporizers transform LNG back into a gaseous state before it enters pipelines.) “Therefore, the impact of the changes on the original scope of the project was minimized.”

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PHOTO BY SHAVONNE WONG

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SLNG's storage tanks

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Pipelines transfer LNG from storage tanks to the open rack vaporizers, where LNG is returned to its gaseous state before being sent out to the Singapore Gas Network.

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Control room

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Marine loading arms at the jetties can quickly unload LNG from ships.

PHOTOS COURTESY OF SINGAPORE LNG CORPORATION

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“The project as a whole benefits if the client's project team tries to appreciate the contractor's problems and, where possible, to help.”

—Malcolm Thomas, SLNG

The project's other major challenge was acquiring and managing experienced talent. SLNG knew it would never be able to marshal internal resources to manage such a major project, so it tendered a project management contract in parallel with its engineering, procurement and construction contract.

“Singapore had no previous LNG project experience, so one of the biggest challenges the new organization faced was to set up, from scratch, a project team to manage and deliver this nationally important project,” says Mr. Wood. “We overcame this by first recruiting a small core team of internationally experienced LNG project professionals, and then blending it with the best of local project talent.”

SLNG then set up an integrated project management team, led by core SLNG and senior project staff, focused on creating a “one team” approach for the project. The team met daily to prioritize outstanding tasks and troubleshoot problems, says Malcolm Thomas, construction manager, SLNG.

“The project as a whole benefits if the client's project team tries to appreciate the contractor's problems and, where possible, to help,” Mr. Thomas says. “We knew what were the ‘must haves,’ as opposed to just ‘nice-to-haves,’ and were open to alternative technical solutions.”

SAFETY DRIVES SUCCESS

Creating a one-team mentality also helped SLNG deliver on its commitment to project safety, Mr. Thomas says.

“Our ethos was that if you focus on safety first, other project performance targets naturally follow,” he says. “A safe construction site is an efficient site, and avoiding accidents avoids potentially costly delays, as well as safeguarding individuals.”

Project leaders worked to ensure the project safety culture was adopted across the entire team— especially by first-line supervisors in the field. If an unsafe act or situation was identified, supervisors were charged with stopping work while the incident was discussed and the correct way forward was identified and communicated to the team.

“We adopted the slogan, ‘If you see it, you own it,’ which meant that identifying an unsafe situation or action was not enough,” says Mr. Thomas. “If you walk away from an unsafe situation without rectifying it, you're condoning it.”

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June 2009: To decrease Singapore's reliance on piped natural gas and position the city-state as a regional liquefied natural gas (LNG) trading hub, Singapore LNG Corporation (SLNG) is created to develop, own and operate Singapore's first LNG receiving, storage and regasification terminal.

February 2010: SLNG awards the engineering, procurement and construction contract for the terminal project to Samsung C&T Corp. It awards the project management consultancy contract to Foster Wheeler Asia Pacific.

March 2010: Construction begins.

November 2010: The Singapore government decides to expand the project's scope by approximately 40 percent, requesting a third LNG storage tank, a second jetty and more processing capacity.

2011: SLNG awards additional engineering, procurement and construction contracts to Samsung C&T Corporation for the third LNG storage tank and the secondary jetty.

March 2013: The terminal receives its first LNG cargo, used for commissioning the terminal.

May 2013: The terminal receives its first commercial LNG cargo and commences commercial operations with two storage tanks, one jetty and an initial throughput capacity of 3.5 million tonnes per annum (MTPA).

January 2014: Construction of the third storage tank and additional regasification facilities is completed, increasing the terminal's throughput capacity to 6 MTPA.

February 2014: The SLNG terminal is officially opened by Prime Minister Lee Hsien Loong.

March 2014: The secondary jetty comes online.

2017: Scheduled completion date for additional regasification facilities that will increase the terminal's throughput capacity to about 11 MTPA.

2018: Scheduled completion date for a fourth tank, which, at 260,000 cubic meters (9.2 million cubic feet), will be world's largest LNG tank.

As a result, the project team worked 15 million man-hours without a single lost-time injury—and each phase of the project closed on schedule. The main terminal started commercial operation in May 2013 with the third LNG storage tank and second jetty going online in January and March 2014, respectively.

As of January 2015, the SLNG terminal had received 43 vessels delivering roughly 2.5 million metric tonnes of LNG to Singapore. Presently, the terminal supplies some 20 percent of the natural gas requirements for Singapore's power generation. That portion will likely soon rise, further reducing Singapore's reliance on gas from pipelines. At the terminal's official opening ceremony in February 2014, Singapore Prime Minister Lee Hsien Loong announced that a fourth tank and additional facilities will be added to the terminal. The SGD700 million expansion project will take the facility's overall capacity to 11 million tonnes per annum when it is completed in 2018.

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“We are preparing for the possibility that our demand for natural gas may one day be met entirely by LNG,” Prime Minister Lee said at the ceremony. Beyond the fourth tank, space will remain on-site for an additional three tanks as Singapore's demand for gas and the country's position in the region's LNG market continue to grow.

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“Singapore can now import natural gas from sources around the world, thereby increasing options and enhancing energy security.”

—Peter Wood

PHOTO BY SHAVONNE WONG

“Singapore can now import natural gas from sources around the world, thereby increasing options and enhancing energy security. At the same time, the flexibility built into the design is beginning to yield significant commercial benefits,” says Mr. Wood. “From a project perspective, however, the outstanding achievement was that the initiative was completed safely, within budget and on schedule—and was adaptable enough to accommodate substantial changes in scope along the way.” PM

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This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

MAY 2015 PM NETWORK
PM NETWORK MAY 2015 WWW.PMI.ORG

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