Convertible Lump Sum EPS Contracting Model – How to Get the Plant you Need Now and Still Enjoy in 20 Years?

Abstract

In most instances process plants are designed to meet performance objectives that are clearly defined by a detailed technical specification. The contractors and licensors designing and building such process plants are quite proficient at designing a plant to meet those performance values for an economically attractive cost. However the reality for the owner and operator of the plant is that over the 40+ year lifetime of the plant the inlet feeds, production rate and operationally desired set points for each piece of equipment will change. Often times this can result in a non-optimal plant and performance problems or poor reliability. This fact is particularly severe for plants which undergo significant corrosion or fouling like that commonly seen in sulphuric acid plants. Plants are built to make money for their owners. The primary way to make the most money out of a facility is to have the plant operational at as high of a capacity as possible for the maximum number of days in the operational life of the plant. There are numerous ways that the plant designer and builder can place design allowances, safety factors, built in redundancy, optional operational configurations, bypasses and other tricks to allow the facility to operate well for all desired production rates and all desired feed types. The costs of such options are often quite small if dealt with in the initial design phase. Unfortunately, in nearly all instances this optimal facility is not the facility that is built for the client. The reason why is often the inflexibility in the client/designer contractual relationship prevents open discussions on optimization. The Convertible Lump Sum EPS model can be used to get the optimal plant design for the client's present and future needs as well as providing price surety of a lump sum execution.This paper will detail the aspects of the Convertible Lump Sum EPS model. It will use an example sulphuric acid plant project to show how the client can be involved in the decision making process to get the best plant design for their site with appropriate design factors and options. Instances will be illustrated where plants have been built that do not have the flexibility required to operate effectively as the plant ages and/or the plant slightly changes operational modes. This lack of flexibility often causes damage to the plant and operational downtime or reduced capacity. Cost/Benefit analyses will be done on each of these cases. This paper will show that use of an effective, technically and commercially transparent contracting model with the appropriate partner can allow significant savings in TIC cost as well as for total return on investment.