The Role of Chemical and Process Engineers in Process Plant Engineering and Construction Change Order Claims

This blog post is the first in a four-part series on the role of chemical and process engineers in evaluating process plant engineering and construction Change Order claims.

This first post discusses the typical chemical and process engineering scope of work and when to engage a chemical or process engineer in a Change Order claim. The second post will detail tasks to be performed in Change Order evaluation, and the third and fourth posts will identify examples of Change Order claims in which a chemical or process engineer is uniquely qualified to evaluate the technical, schedule, and cost impact of changes. The fourth post will also include questions that chemical and process engineers can help answer about Change Order entitlement and schedule and cost impacts.

Typical Chemical and Process Engineering Scope of Work
Chemical or process engineers are typically the first engineering discipline engaged in design of the following:

• Oil refineries
• Chemical, petrochemical, gas processing, or Liquefied Natural Gas (LNG) plants
• Topsides of offshore oil and gas plants
• Any other process plant projects

Process design tasks that a chemical or process engineer performs include:

• Identification of the required feed and product specifications
• Determination of flow rates and their thermal, pressure, and chemical properties
• Development of Process Flow Diagrams (PFD)
• Calculation of heat and material balances
• Development of equipment, process controls, and instrumentation specifications
• Preparation of Piping and Instrumentation Diagrams (P&IDs)
• Performance of Hazard and Operability (HAZOP) analyses
• Determination of requirements for electric power, nitrogen and hydrogen gases, utility water, and cooling water
• Development of preliminary plot plan layouts for equipment and pipe racks

Plant design typically evolves through a Front-End Loading (FEL) stage gate process, wherein a Front-End Engineering Design (FEED) package is ultimately prepared. That package becomes the basis for the owner to solicit bids for Engineering, Procurement, and Construction (EPC) or Engineering, Procurement, and Construction Management (EPCM) contracts from engineering and construction firms. The bids propose plans for detailed engineering, procurement, and construction along with cost estimates and a Critical Path Method (CPM) schedule for performing the work.

Design changes often occur after FEED package completion, although not all PFD and P&ID changes are considered scope changes because the scope of the EPC or EPCM contract is to evolve the FEED design into a detailed design.

Changes must be managed and controlled to ensure project success. A well-managed change management procedure incorporating technical scope assessments as well as accurate estimation and measurement of the cost and schedule impacts of changes is essential to avoid huge cost overruns and schedule delays. Change Orders during the EPC or EPCM phase of a project that are not resolved at the project level often escalate into claims that may require arbitration or litigation.

When to Engage a Chemical or Process Engineer in a Change Order Claim
Understanding the technical, cost, or schedule impacts of Change Orders on process plants often requires understanding the detailed chemical or process engineering design. Such changes include:

– Process modifications, including:

• Feedstock or end-product properties and compositions
• Flow rates, temperatures, and pressures
• New or modified equipment such as compressors, heat exchangers, pumps, and process vessels
• Changes to piping and instrumentation, which often affect structural or civil work such as larger foundations or additional structural steel

– Changes to the metallurgy of piping or equipment
– Process safety or environmental compliance modifications
– Construction means, methods, or sequencing changes because of the technical complexity of the change
– Modifications or delays to pre-commissioning and commissioning work to prepare the plant for startup

Because chemical and process engineers drive the FEED design, it is wise to include a claims expert with a chemical or process engineering background and process plant project design experience in determining the effect of changes on original plant design and construction. In addition to evaluating the direct effects of changes on plant equipment and systems, such an expert can evaluate the cause-effect relationships of changes and their cost and schedule impacts.

Not all chemical or process design engineers have the experience in claim analysis to perform the comprehensive examination necessary to establish the link between a technical change and its overall effect on cost and schedule. However, a chemical or process engineer experienced in engineering and construction claims can develop that cause-effect relationship and can be vital to properly evaluating the responsibility for the technical, cost, and schedule impacts of such changes.

Richard J. Long has a B.S. in Chemical Engineering and an M.S. in Chemical and Petroleum Refining Engineering.

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