ICPM project lifecycles PROGRAM PRESENTATION ICPM project lifecycles NAIAD Company Ltd 2017. All rights reserved www.naiad.ca

1. The Point 2. LIFECYCLE PHASES IMPLEMENTATION

Lower execution risks through incrementalism 1. THE POINT Lower execution risks through incrementalism NAIAD Company Ltd 2017. All rights reserved www.naiad.ca

” Risk is the evil empire that lurks at the edges of a project manager’s sight. It must be corralled, controlled and emasculated. Risks are most effectively minimized by maximizing development steps. Conversely, the risks of failure increase exponentially when work is done in parallel, is accelerated, or is never ended, until the end. . Steven Keays (2016)

THE FAILURE OPTION The somber reality of projects is a relentless path towards failure 70% of projects beyond the $1B threshold will likewise miss their cost, schedule and performance targets 50% of projects priced at $100M will yield the same failure outcome 30% of projects budgeted at $20M or less will fail to meet investors’ expectations NAIAD Company Ltd 2017. All rights reserved www.naiad.ca

Incrementalism THE RISKS THE POINT THE FOCUS THE OUTCOME One step at a time is the shortest distance to success THE RISKS Management is corralling risks. Low risks require most steps and insists on completing an output before feeding it to others. Fewest risks demand that the development sequence prioritizes the work on installations and systems as a function of their costs. THE POINT Incrementalism is sine qua non. It deduces development times, eliminates re-work, and stops schedule slippages. It simplifies the master schedule and reduces task linkages. It yields the lowest project execution and delivery costs. THE FOCUS Incrementalism focuses the strategy of execution. Owners and project managers will embrace the correct perspective when confronted with schedule slippages. Highest project valunomy. One should never sacrifice the future profitable performance of the asset for the sake of immediate schedule preservation. No time is ever materially saved when trying to save time by crashing schedules or work in parallel. THE OUTCOME

An execution sequence in 8 parts 2. LIFECYCLE PHASES An execution sequence in 8 parts NAIAD Company Ltd 2017. All rights reserved www.naiad.ca

THE GOVERNING RISKS Six developmental risks Control risks Projects are complex and inordinately prone to vagaries, randomness and bifurcations; the bigger the scope, the greater the unknowns. Ease of control is inversely proportional to complexity. Accordingly, one’s ability to control is enhanced by work atomization and incremental progression of the work Cost risks the risk of costs running amok can be minimized. Development must focused and free from inefficiencies, redundancies and dabbling. Complex cause and effect couplings are more easily corralled when done serially. Do things sequentially. Avoid the temptation to save time by starting earlier than needed. Get things done once, then progress Commitment risks At each stage, A TIC estimate is produced. How these estimates are engineered and refined over time is directly proportional to the development work behind it. The risk here is in the divergence between refinements. Ideally, it will be asymptotic to the asset’s intrinsic cost Valunomic risks It is not enough to mobilize teams to launch the work. It is necessary to make sure that the work is essential and singular. Otherwise, the valunomic risk will materialize. Too many projects are plagued by the belief that work can progress in parallel regardless of the state of completion of its variegated pieces Nameplate risks Right up to the moment preceding the turnover of the plant to Operations, its profitability and performance are theoretical. Its connection to reality is best achieved through the mechanics of nucleation performed in lifecycle phase 5 . Machine risks Equipment will wear out, weaken, break and fail given enough time. Such degradation is inevitable. Degradation is code for the risk of failure. For the owner, therefore, machine risks never disappear. They can, however, be minimized with enough engineering fortitude

Basis of orchestration Follow the features, not the work The physical features of the plant – the physical configuration – forms the basis of orchestration of the information that will be compiled during the project. The project, the work, the metrics, the sequencing and the records all share the same record structure associated with the physical configuration of the asset. The physical configuration is obtained by breaking down the asset into its constitutive elements in a top-down manner. NAIAD Company Ltd 2017. All rights reserved www.naiad.ca

ICPM LIFECYCLE PHASES 2 3 4 5 6 7 8 Eight phases, sequenced serially. 1 2 3 4 5 6 7 8 Installation integration Plant design and nucleation Asset mitosis Construction Physical configuration of asset Construction basis Realization planning Asset validation System definition Plant integration Conceptualization stage Realization stage NAIAD Company Ltd 2017. All rights reserved www.naiad.ca

SCOPE OF WORK Individual phase details Asset Mitosis (1) Define the overall asset requirements . High-level targets are assigned. Identify the PECO objectives, investment message. Distill plant into primary installations. Define their functional requirements (FR System definition (2) Define the functional specifications (FS) for the primary systems . Define the IBL requirements of the secondary systems. Identify OBL commands. Preliminary Installation integration (3) Integrate the primary and secondary systems of each installation into functional networks. Derive the design specifications (DS) of systems, FS of installations and FR of the plant Plant integration (4) Integrate the primary and secondary installations into the pant’s functional network. Develop the construction requirements Plant design (5) Complete the design of the entire plant. Derive the construction specifications. Develop all Phase 4 FS into DS. Finalize all command and control details of the plant. Commence the nucleation work. The Conceptualization stage is completed Realization planning (6) Assemble the construction basis. Develop the plans to construct the asset. Execute the permit plan. Award all required contracts Construction (7) Initiate the site preparation works. Begin construction. Continue until the plant is ready for commissioning Asset validation (8) Enter operational readiness. Execute start-up and commissioning. Complete personnel training. Operations take-over. Verify plant’s performance. Modify as required. Collect PAMs. Warranty claims and hold-backs are resolved. Complete close-out

FS DS PS B FR Esemplastic key Esemplastic Key. The primary mechanics for evolving a piece of equipment from concept to operating condition. FR FS DS PS B Functional requirements Define the primary inputs-process-output of each UTP required by the feature. The definitions include quantities, rates, frequencies, timing, volumes and other qualifiers pertinent to what is transacted by each process. The FS contract is written. Functional specifications Integrate functionally the primary and secondary features of an operating unit. Proximity requirements are identified (what features must be close to each other or far apart). The functional configuration of each feature is determined. Footprint and spacing limits are quantified. IBL command variables are tabulated. OBL command variables are identified. OBL interface requirements are identified. DS contract is written. Design specifications Define physical details of the unit. Create 3D models. Obtain dimensions. Supports, installation and footprint details are fixed. Interfaces are spatially set. Inertial and dynamic loads are quantified. Shipping and transportation requirements are embedded into the design. Certifications, testing specifications, inspections and approvals, client acceptance criteria are set. Tertiary requirements are compiled (foundation, underground piping, drainage, access, loading bays). PS contract is written Procurement Specifications Create the documentation necessary to enable procurement. Contract terms and conditions are written. Inspection test requirements are identified. QA records are listed. Document, tag and part numbers are assigned. 3D kernel data are specified. Preferred and barred suppliers are identified. B contract is written. Build Contract awards are issued. Fabrication or construction is initiated. Shipping and transportation details are resolved. IBL command and control programming is coded. The 3D kernel documentation is produced.

AN EXAMPLE Esemplastic key in Phase 1 NAIAD Company Ltd 2017. All rights reserved www.naiad.ca

3. IMPLEMENTATION From function to feature

Sequencing the esemplastic key Evolving the valunomy of the plant 1. FUNCTONAL REQUIREMENTS 2. FUNCTONAL SPECIFICATIONS Atomization Throughput diagram A Functions Configurations Network diagrams BL constraints B Equipment options Valunomy analysis Selections C Control schematics HAZOP Proximity IBl/OBL signals Secondary FR D 3. DESIGN SPECIFICATIONS Spatial envelope Dimensions Tertiary FR E Algorithms Panels and JB OBL signals F NAIAD Company Ltd 2017. All rights reserved www.naiad.ca

PROCUREMENT SPECIFICATIONS Sequencing the esemplastic key Evolving the valunomy of the plant PROCUREMENT SPECIFICATIONS BUILD MONETIZE ITP package Bid mechanics Vendor awards G Build & test As-building 3D kernel Ship H Site install Commissioning Training Start-up I NAIAD Company Ltd 2017. All rights reserved www.naiad.ca

The fractal nature The esemplastic key is recursive The esemplastic key is fractal. That is, it applies at every level of an atomization, from plant to system component. It applies as well as to primary, secondary and tertiary subdivisions, and to IBL/OBL segregation. This fractal nature imposes a built-in prioritization on what gets done when. The fractal pattern applies to all constituents (plant, installation or system) in the manner shown by Map 1. The pattern applies to the Set (1), a primary system for example. Sets (2) and (3) correspond to the secondary and tertiary systems, respectively, with each one developed in the sequence of Set (1). NAIAD Company Ltd 2017. All rights reserved www.naiad.ca

The fractal nature The esemplastic key is recursive The information flow within and without a constituent is indicated in Map 2. The primary system is developed first, and its secondary systems integrated into an FS. The interfaces at the system`s boundary layer are passed on to the installation – the NLC – as OBL interfaces. The development of the installation is started. System development continues until the DS is obtained. The physical footprint of the system and the spatial location of the OBL interfaces are captured in the spacebox, which is fed to the installation for inclusion into its own model (step E). The identical process applies to the command logic for the system, whereby its input/output OBL signals specifications are passed to the installation for inclusion into the installation’s overall command algorithm. NAIAD Company Ltd 2017. All rights reserved www.naiad.ca

The fractal nature The esemplastic key is recursive The treatment of tertiary requirements – via Set (3) – follows the sequence of Map 1. They are integrated into the physical layout of the plant in accordance with Map 3. Note the appearance of the construction features along the path of Set (2). At the system level, such features will include, for example, the dimensions of the hole to be dug out to permit the installation of the foundation and the deep underground connections. At the installation level, construction features will include temporary access roads, temporary water drainage from rain, and laydown areas. At the plant level, construction features will comprise the temporary facilities and buildings, materiel receiving, fabrication tents, perimeter fencing and the likes. NAIAD Company Ltd 2017. All rights reserved www.naiad.ca