canadian heavy oil association presentation november 10 th, 2011 a different view of project...

Canadian Heavy Oil AssociationPresentation

November 10th, 2011

A Different View of Project Execution

SAGD Construction Project Timelines

Background in SAGDDeer Creek Energy - Joslyn Pilot Plant

Background in SAGDDeer Creek Energy - Joslyn Commercial Facility

Background in SAGDConnacher Oil and Gas – Pod I Commercial Facility

Background in SAGDConnacher Oil and Gas – Algar Commercial Facility

Current Projects

Pengrowth Energy Corporation – Lindbergh Pilot Plant• Currently Under Construction

• Scheduled for Startup in Q1 of 2012

Southern Pacific Resources – McKay River Commercial SAGD• Currently Under Construction

• Scheduled for Startup in Q2 of 2012

N-Solv Corporation – McKay River Pilot Project• Currently undergoing Engineering

• Scheduled for Startup in Q4 of 2012

Typical ProjectAlgar Commercial Facility – Early Road Construction

Typical ProjectAlgar Commercial Facility – Road Construction Complete

Typical ProjectAlgar Commercial Facility – Plantsite Civil Preparation

Typical ProjectAlgar Commercial Facility – Pile Driving

Typical ProjectAlgar Commercial Facility – Day 30

Typical ProjectAlgar Commercial Facility – Day 150 – Evaporator Lift

Typical ProjectAlgar Commercial Facility – Typical Module Installation

Typical ProjectAlgar Commercial Facility – Day 240

Typical ProjectAlgar Commercial Facility – First Steam

Project Execution

Process Design• Detailed Process Review

• Early Involvement of Operations

• Ability of the Team to quickly evaluate process options incorporating input from all stakeholders & to implement decisions rapidly

• Ability of the Team to recognize unit operations that have been successfully utilized in similar applications and not waste time in re-evaluation unless justified

Contracting Strategy & Risk Management• Best scenario for a successful project is where the goals of the Owner, Project Managers, Vendors, and Contractors are all aligned.

• Lump Sum for Engineering Contractor based on a % of +/- AFE

• Sole Source Supply where justified

• Detailed bid process where justified

• Time and materials based contracts

• Field contracts a mix of fixed price and hourly

Project Execution

Shop Fabrication Procurement• Onus heavily on Engineering Contractor

• Schedule of IFC drawings determines the project schedule and predicted cash burn

• Management of Change

• Attention to detail & very rigorous shop inspection

• Constructability

Logistics and Transport•Difficulty of the Transportation Corridor

•Close communication between Shop Coordinators, Field Supervisors, and Transport Contractor

•$/km contract for transport

•Flexibility of field contracting strategy

Project Execution

Field Construction• Under this execution strategy this area presents the greatest risk for cost control

• Success is highly dependent on accuracy of engineering contractor – stuff has to fit

• Primary Mechanical Contractor on hourly

• Secondary Mechancial Contractor on hourly

• Typical to go lump sum of E&I

• Flexibility for Field Supervisors

• System in place to closely monitor Cash Burn vs Productivity.

Specific TechniquesTight Spooling

Specific TechniquesPipe Modules

Specific TechniquesPouring Pod I Tank Base

Specific TechniquesAlgar - Pile Supported Steel Tank Floors

Specific TechniquesPod I Grade Beam, Floor, Supports, & Mod Installation

Specific TechniquesAlgar Grade Beam / Piles

Specific TechniquesAlgar Equipment Setting

Closing Remarks

“It’s about the People, not the process”

Neal Gartner, Engineering Manager, AMEC BDROctober 2011