In The Pipeline
How Integrated Risk Management Solution was used on Sakhalin II Phase 2, Russia
- Oil & Gas
Date of Completion
How an Integrated Risk Management Solution Tackled the World’s Most Complex LNG Programme
This project, located on a remote island in the Far East of Russia, was the biggest integrated oil and gas project in the world at the time, considered a ‘new world entry.’ The Sakhalin-2 project involved two offshore platforms, an 800km onshore pipeline network, and one of the world’s largest LNG facilities, a scale that defined every aspect of the delivery challenge.
Challenge
The project was severely delayed and over budget. In fact, it ended up costing more than twice the initial approved budget and took 3 years longer to complete.
The 900km long Onshore Pipelines scope was particularly challenged with authority approval delays, contractor performance (due to financial stress caused by wrong contracting strategy) and technical challenges due to inhospitable terrain.
Solutions
The contract model was bravely changed mid-execution, along with the introduction of a one team mindset. This created an integrated team between client and contractor driving forward to finish together.
Detailed, adaptable dashboards alongside flexible trackers allowed activation of previously hidden data, identifying potential bottlenecks ahead of time enabling fast and effective decision making and interventions by the whole project management team.
Outcomes
The Integrated Start-Up of an asset of this size (3 offshore platforms connected to a new-technology LNG plant via pipelines more than 600km away) was obviously a complex task, the first train took 1.5 months to go through the start-up process. Through thorough data analysis and immediate applications of learnings gained from the first train, we managed to have the second train start up in 9 days, a deadline no one thought possible apart from us.
By year end, this resulted in $150 Million extra revenue, during the Great Financial Crisis of 2009 and the project earned back its massive investment within just 4 years from start up.
