In today’s economic landscape, sustaining capital projects have become more prevalent than the historically known larger capital projects that have dominated Alberta’s energy industry.
Sustaining capital projects are typically less than $100MM total installed cost (TIC); they are short-term injections of capital that not only support ongoing and future operations at client facilities but also help optimize facility performance and strengthen its lifecycle. The execution of sustaining capital work must be as rigorously defined and controlled as any major capital project, as it translates to the lowest cost of ownership and keeps operating companies competitive.
Fluor’s programmatic approach to sustaining capital work has aided clients in witnessing the full benefit and maximized value of these investments.
A Strategic Approach
Sustaining capital efforts are most efficient when handled within their own framework that recognizes and takes advantage of how they differ from a larger capital project. “To consider sustaining capital work in a programmatic way involves a truly collaborative relationship between the client and the contractor,” says Kim Jennings, Director of Sustaining Capital Projects. “We have been successfully executing collaborative client relationships for more than 25 years, and those relationships have assisted us in developing fit-for-purpose processes for clients and their sustaining capital projects.”
Instead of a transactional process involving selection of a different contractor for every piece of work, the same engineering contractor is engaged across all aspects of the project, creating a progressive synergy. The continuous nature of the work and the collaboration it fosters brings about a fruitful and long-lasting relationship. The client and contractor both have a seat at the table and work side by side to define the client’s business goals and uncover opportunities for added value.
The power of a programmatic strategy for sustaining capital projects quickly becomes apparent once implemented. A review of the benefits realized through Fluor’s programmatic approach is highlighted below.
Relationship: Shared Culture
- Leads to a progressive and sustained relationship
- A learned understanding of common risks and goals for client and contractor
- Generates accountability and sense of ownership and pride
- Develops knowledge of expectations, company culture and risk tolerance
- Increases networking and intellectual developmental opportunities
Collaboration: Synergistic Connection
- Active participation of all project stakeholders
- Operations team members can build relationships with the engineering contractor and provide crucial input early in the design phase
- Co-location of project team enables hallway conversations and pop-up collaboration meetings as well as experiential knowledge sharing
- Early identification and resolution of concurrent engineering scope overlap
Increased Efficiencies: Maximum Value
- Dependable quality of work product
- Reduction in effort due to repeatability
- Consistency of personnel and continuity of knowledge
- No learning curve – drives down cost and schedule over time
- Shared governance costs across program of projects
Fluor’s full-service engineering, procurement, and construction/construction management services are realized in the programmatic approach to sustaining capital work. Zoran Stojanovic, Program Manager, facilitates this approach with a current Fluor client with assets across Canada. “The benefits of Fluor’s programmatic approach have been obvious in our execution with this client. There is less of a learning curve, more institutional knowledge, and there are relationships that have developed within different groups at all levels which has helped drive down cost in the long run.”