Can you tell us a little about your background in the industry and your role at KBR?

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Been around for a lot longer than I would like to admit, but to keep it short, I spent about half of my career with a large international oil company and the other (current) half with a large international EPC company. This has provided me a somewhat unique perspective of the industry (from both sides).  My role at KBR is in project management and in particular in the area of modularization, having been involved with modular projects on both sides of the project fence, both onshore and offshore.  Working with modular projects since the mid-80s, I have been involved in everything from very early FEL-0 conceptual to detailed design and on-site construction.

 

Given the restrained craft labor market modular construction is receiving increased interest, is that something you’re seeing with your clients at KBR?

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Absolutely!  Not only from the clients that understand all the benefits, but also many that are looking to modularization as the latest project “savior” in terms of cost and schedule.  The challenge with this is regardless of whether a client is familiar with the concept or new to it, there are many differences between a modular philosophy and the more familiar stick build (or build it at site) project implementation that need to be identified and addressed.  So, in addition to the interest, there always needs to be some “training” or orientation on the philosophy early in the project…..

 

What are some of the key projects KBR is working on which are utilising a modular approach, and why was a modular approach favoured for those projects? 

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While I am not at liberty to discuss these projects, I can say as a generalization, almost every project, from the very very large international ones to the smaller local ones, all are looking into the potential benefits of modularization for their specific project.  In many cases, it is the obvious reasons, such as, lack of adequate craft labor, the cost of that local labor, limited construction window on site,  issues with enough space (for laydown or temp construction purposes) etc.   Even some of the areas of the world where the craft labor cost and availability are adequate, there are concerns that the project or the competing projects will outstrip demand.  The resulting impact is typically a schedule delay, which translates into cost to complete as well as lost revenue opportunities.

 

What projects / conditions do you think favor a modular approach and why?

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I am probably on the extreme with respect to this.  But, I think every project has some “ideal” or “optimal” approach.  There is almost always something that can be purchased and assembled offsite cheaper than it costs to build it on site.   A good example is the packaged units you see everywhere , such as the an inst. air / plant air systems.  The key to success is identification of the scope that makes sense for the particular project and then following through with the design, procurement, etc. in a timely manner that gets the materials to the fab yard and the completed kit to site per schedule………which is often required slightly earlier than the stick build alternative.

 

What work can’t be modularised?

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Most everything that has to do with ground preparation and underground works.  Sometimes, tanks are too large to pre-assemble.  Obviously, there are some vessels and towers that make more sense to set separately.  But, there are always alternatives.  For example, undergound efforts can be minimized by running piping on pre-assembled pipe racks, increasing the off site module potential.  Sometimes it may even make sense to modularize large vessels and process towers.

 

How does modularisation impact schedule?

 

Proper planning will shorten the overall schedule.  But, this assumes that some work critical to the early parts of the modularized scope, get performed earlier.  It also assumes that any early design or procurement efforts can be funded, sometime prior to FID (financial investment decision) by the client.

 

What impact does going modular have on the EPC’s and Client’s resources?

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There typically is a shift to the left with respect to resource needs on the modular project.   For example, a long lead piece of equipment to be installed in a module may require the prerequisite engineering / bid process / procurement paperwork / and actual vendor assembly be pushed several months to the left in order to get that piece of equipment to the fab yard in time to fit into the module assembly sequence.

 

What impacts will a modular approach have on engineering and procurement?

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As hinted at previously, it typically pushes it to the left a bit.  This is because of the intermediate schedule need to get design, materials, and equipment to the fab yard early enough to allow them to do their work unimpeded.

 

How important is it for the owner to understand the relationship between the EPC and the fab yard?

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It is very important for the owner to understand the relationship, as the owner is responsible for some of the early project feasibility studies as well as later for design or procurement of equipment.  Also, since the owner is responsible for the early funding, he must understand the need for some early design efforts on equipment that is necessary for developing the module details required to get early procurement of structural steel and piping bulks.

 

What are the key commissioning considerations with a modular approach?

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While we typically do not perform “commissioning” on a module (which is the introduction of the actual process fluids into the module) we expect the “pre-commissioning” to be completed to 100%  (this is completion of hydrotests, pipe cleaning, much of the E&I&C such as continuity checks, bumping motors, etc. .)  The goal of any module project is to minimize site work.   This can best be achieved if all the pre-commissioning has been completed off site.   Of course, this assumes that all the details regarding testing, witnessing, and sign off have been set up and agreed ahead of time by all parties.  The very worst scenario is a misunderstanding of the scope being handled as an inadequate sign off by contractor and client, leaving the site team to have to re-test.

 

What modular capabilities exist in the US & Mexico vs other parts of the world?

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Modular capabilities exist throughout north and south America.  They are more smaller capacity type fab yards then very large ones, when one compares capabilities with their sisters in the Far East.  However, there are some good size yards in the USGC as well as Mexico and South America.   Selection of the “right” fab yard is driven by a whole series of project specifics, only one of which is proximity to the project site. 

 

How have new technologies such as VR / Augmented reality and AI changed the modular construction approach?

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Technologies that support the construction industry are really too numerous to mention here.The technologies that support the historic stick build project implementation also work well with a modular project.In fact there are probably more technologies that are associated with the modular project execution due to the early planning required.Unfortunately, we as an industry, have not kept up with and incorporated many of these technologies like the manufacturing and aerospace industries.Part of this is due to the uniqueness of the projects, but some of it is simply due to a desire to start with a blank sheet of paper on a project.

 

What key advice would you give to an owner considering a modular approach for their project?

 

Buy my book…….Seriously!  That is because the first piece of advice I have is to become familiar with the modular philosophy, what drives it, what makes it successful, and what will really mess it up.  If the owner does not have a modularization SME, he should hire one or contract one. There are just too many early decisions that he must make, that without guidance, he would be very lucky to find and implement all the subtle and not so subtle nuances that a modular philosophy requires.  This will result in a less than optimal project outcome.

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The Owner needs to get involved in the development of his company’s education on the module philosophy.  The decision to go modular is truly a company-wide as well as project wide decision and must be embraced by all to be successful.  It does little good if the project team embraces the concepts but upper management is not willing to “adjust” the project approach in terms of how the company does business.

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Michael will speaking on our Modular SME panel session at this year's LNG Export Engineering & Construction Conference.  For more info on the event see here - www.lngexport.us 

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Michael's Book 

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“Modularization: The Fine Art of Offsite Preassembly for Capital Projects” (ISBN: 978-1-119-82471-8; Authors: Michael Kluck and Jin Ouk Choi) and published by Wiley. It is a postgraduate textbook and industry primer. While written in terms of the large-scale industrial modularization project, the steps and process are equally applicable to small-scale projects as well as projects outside the industrial construction realm.

Available at major bookstores (Amazon [https://lnkd.in/gdKbMSRE], Wiley [https://lnkd.in/gRT9AAvU], Barnes & Noble, Walmart, etc.) in hardcover and e-book.

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