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Standardised solutions projected to reduce installation costs in oil and gas industry

The oil and gas sector could comply with increasing pressure to reduce costs and enhance efficiency for energy projects through standardised designs and modularised construction techniques, according to SNC-Lavalin.

The engineering, procurement and construction (EPC) company says that while standardisation is not a new concept in the oil and gas industry, it is fast emerging as the most efficient and economical option in the EPC sector in the Middle East.

“Implementing standardised designs and adopting a modular approach to processing units can significantly reduce project budgets, project schedules and construction site work, sometimes by as much as 30%,” said Alan McLean, executive CP for oil and gas at SNC-Lavalin Middle East.

“This can really be a game-changer for an industry whose players need to spend less for the same output and to the same high standards.”

During the first half of 2016, SNC-Lavalin won contracts worth more than $1.1 billion (€994.9m) in the Middle East, mostly in the oil and gas sector.

Representative ongoing oil and gas projects include asphalt production facility contract for Saudi Aramco’s Ras Tanura Refinery in Saudi Arabia, engineering consultancy for Oryx GTL in Qatar, oil processing facility EPC work for Exxonmobil’s West Qurna 1 field in Iraq, and a wastewater treatment project for LAFFAN Refinery 2 for QatarGas.  

“As we have observed, despite the low oil price environment governments have prioritised energy investments to meet rising energy demand and maintain potential of existing assets. Additionally, there is a gradual shift towards alternative sources of energy, such as shale and solar,” McLean added.

“It is therefore more imperative for the energy industry to have access to innovative, robust, and – above all – affordable project delivery options, such as modularisation and standardisation, to enhance all aspects of project delivery.”

Such solutions help achieve much greater speed to market and at a lower cost, removing unnecessary levels of complexity without impacting the quality of delivery and output, according to McLean.

In 2014, SNC-Lavalin acquired Kentz, a global engineering and construction solutions provider to form an oil and gas group of 20,000 people worldwide, with approximately 10,000 in the Middle East.