Speed to Market

Indeed, there is little familiar or simple in executing work in the gigaproject generation. “We have picked the low hanging fruit in terms of natural resources,” says Santo Rizzuto, general manager of mining and metals for Australian engineer Sinclair Knight Merz. “We are now having to exploit areas that are much more challenging, such as parts of Africa and South America.” Simon Naylor, president of natural resources Americas, AMEC Inc., says the jobs demand more logistical infrastructure and environmental controls. SKM's Rizzuto points to speed-to-market demands.

Keeping gigaprojects supplied with materials, equipment and labor is a more daunting proposition. “Supply chains are longer, like an octopus; they stretch around the world,” says Ryan Orr, executive director of the Collaboratory for Research on Global Projects at Stanford University, Palo Alto, Calif. “It really is an exercise in coordination.” He and two other university professors just released a book that analyzes political and institutional issues on nearly 100 global projects.

Umberto della Sala, CEO of Foster Wheeler's engineering and construction unit and interim corporate chief, sees a stronger push for safety on LNG and other major projects, and more required “local content” in labor and sourcing decisions.

“We refer to some of our current jobs as logistics-driven rather than in the more traditional representation as construction-driven or commissioning-driven,” says Mitch Dauzat, president of the gas monetization unit for Houston-based contractor KBR Inc. “Everything must be planned and scheduled in painstaking detail to succeed.”

Della Sala says the logistics of modular construction are challenging because shipping schedules for inbound materials and outbound modules must be precise. He and Dauzat use new project and risk management tools to that end. “Our in-house project completion, commissioning and turnover program is the industry standard,” claims Dauzat. “For these large, complex, remote and expensive projects, the ability to effectively identify, quantify and manage risk is paramount.” SKM's Rizzuto also points to mining technology advances “such as in-pit crushing and conveying, which decreases the need for vehicle movements on site.”

Blood Tests

With the mammoth work force needed to execute and manage gigaprojects, staffing is a bigger challenge. “Young people are not as eager today to build resumes at remote sites,” says Rick Koumouris, senior vice president and general manager of Fluor's mining and metals business, although he contends that “allocation is not a huge issue” for the firm.

Bechtel's Dudley says some of the firm's mine construction sites in South America are at locations up to 17,000 ft. “You need a blood test just to visit the site,” he says, which checks a person's ability to adapt to high altitudes.

“The availability of skilled labor is probably the No. 1 issue,” says della Sala. “If you can get the workers locally, you must be sure they have the proper skill level to execute the work.”

At an LNG project in Peru last year, Netherlands-based engineer CB&I directly employed more than 13,000 workers and indirectly supported another 25,000 local jobs, says Lasse Petterson, executive vice president and chief operating officer. He says the firm invested 1 million hours in safety and skills training for local workers, many of whom were farmers. “We will leave a good footprint behind when we leave,” says Petterson.