Page 38 - Industrial Plants

effectively backed up by Project Management EPC projects in Russia experience higher than average
Consulting (PMC). rate of unsatisfactory performances due to the many
• Ineffective reward/penalty scheme in EPCm/ constraints pushing in different directions the project
reimbursable contracts. execution scheme:
• Implicit misrepresentation of project cost • Rigid permitting procedure not allowing an easy
implementation of concurrent E, P, C activities.
So EPC LS(TK) is the key to successful projects? No or • Strong local content requirement but limited
at least, not always. The focal point for the selection of availability of qualified and experienced resources
a contracting strategy shall be the project risk profile • Sometimes opportunistic venturing between
evaluation and the risk management approach. international contractors and Russian Design
Institutes does not allow an effective mutual know
The correct identification of the project intrinsic risk how transfer.
profile in terms of: • Sometimes adversarial approach by Design
• implemented technology; Institutes, EPCm Contractors, Construction
• design technical maturity; Contractors, Owners
• available infrastructures; • Not fully available project/risk management
• supply chain availability competence in Owners organization.
and a rigorous assessment of the risk sharing • Insufficient awareness by international Contractors
opportunities among the different stakeholders are of Russian Projects specific conditions.
keys for the success but many times they are neglected
and compromise the business case relying on the HRPC project environment could have been potentially
project implementation. affected by the above mentioned constraints and by
the transition from the legacy soviet time legislation to
There is not an absolute best contracting scheme but the harmonized European legislation.
the golden rule is that in each project the contract
should assign the risks to who is more capable and in Burgas HRPC project risk profile
position of controlling such risks. The HRPC risk profile assessment that pushed LNB
and TechnipFMC to a collaborative approach as the
Practice in Russian projects best possible execution strategy was based on two

In order to understand the cultural environment in main considerations:
which the project execution strategy developed, it is
worth to highlight that Lukoil is a Russian Company 1. The technological risk: Heavy Residue
and that Bulgaria, among the countries in European hydrocrackers are complex units, probably the
Community, is the country that more keeps important most complex unit in the refinery. The unit
relationships and a strong cultural connection with operating conditions and the process
Russia. technological features requiring a high degree of
Business and technical standards are affected by this competence for its safe and effective
important heritage though rapidly converging to implementation.
European practices. 2. The project context requiring a reliable execution
For HRPC project execution strategy definition it was strategy in terms of resources and know how
important to understand the Russian project execution provided by fully experienced contractors.
methods and performances.
The HRPC is based on a complex technology initially

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