Oil and gas projects — especially those of significant scope — are notorious for running over budget and behind schedule. An Ernst & Young study revealed 64 percent of these large projects face cost overruns, while 73 percent report timeline delays.
After a few challenging years, the oil and gas investment cycle is showing a rebound. With more pipeline and terminal development projects coming online, it makes sense to explore better ways to undertake these efforts. Integrated project delivery can be an appropriate solution, bringing consistency to the chaos that often accompanies projects of this size and complexity.
What Is Integrated Project Delivery?
Integrated project delivery (IPD) is relying on one company to deliver solutions across several disciplines. And while that definition isn’t terribly exciting, the benefits the method can deliver for oil and gas projects certainly are.
The difference begins with a single-service provider rather than several different consultant companies. When one project might include millions of details — from environmental studies and permitting to startup and commissioning — relying on a firm that offers a broad range of services can simplify the development structure.
Communication and collaboration becomes more efficient, creating an underlying foundation of predictability that makes an impact in safety, constructability, quality, budget and timeline.
Strategy Before Spending
Construction costs, as the largest portion of a project budget, represent the greatest opportunity for cost and schedule savings. A hallmark of IPD is construction-first thinking, where the team considers the most efficient way to construct an effort and works backward. Such construction cost control yields can be significant.
Because a construction professional works closely with planners and engineers at the same firm, constructability is considered at every touchpoint. The sequence of activities includes all disciplines, constantly moving the project forward. Construction procurement and routing concerns are addressed and resolved earlier. It’s critical path thinking — and it reduces or eliminates the variables that contribute to budget and schedules issues.
A Tailored Team
While the benefits of IPD are magnified when a single company handles most project elements, it’s not all or nothing. A client’s specific needs might mean the inclusion of an internal subject matter expert or a specific vendor. The delivery method can stretch to accommodate these additions.
When external team members are included on an IPD team, technology and systems can encourage consistency. So can an integrated project planning meeting where team members identify gaps and solidify a collaborative approach.
IPD can increase speed to market, offer cost and schedule certainty, reduce owner risk and elevate strategic planning. See how pipeline and terminal projects can maximize the benefits.