Strategic Organizational Alternatives in Large Plant-Based Projects

1. Plant-Based Large Project Organizational Alternatives Mickey Collins Pathfinder, LLC

2. Outline • Introduction • Background • Organizational Alternatives • Looking Forward • Q/A

3. Introduction

4. Paul M. (Mickey) Collins • Senior Executive Associate with Pathfinder, LLC.  • Has more than 30 years of management, project management, planning, project controls, procurement and contracting experience in the manufacturing, fabrication, engineering and construction industries.  • Has held progressively responsible supervisory and managerial positions in the Process and Manufacturing Industry in both domestic and international project environments. • Earned B.S. in Civil Engineering, Minor in Structures and also completed Graduate Studies in Engineering all at Texas A&M University.

5. Background

6. Background • The North American process industry has evolved over the last 2 – 3 years • Larger projects are more prevalent now than in the past 15 to 20 years.  • Petrochemical companies are taking advantage of the abundant supply of less expensive natural gas; pipeline companies are having to move more product; receiving terminals are being converted to export terminals; etc.  • This is putting a strain on the already stretched owner capital project development and execution organizations. 

7. Background • Owners today are re-evaluating their existing organizational structures based on this influx in capital project activity.  • Should owners staff up, outsource more, rely on pieced-together project teams or hire Project Management Contractors? 

8. Organizational Alternatives

9. Organizational Alternatives • Design Options • Build Your Own (Direct Hire) • Outsource • Pieced-Together Project Teams • Project Management Contractors (PMC) • Challenges

10. Organizational Alternatives • Build Your Own • Directly hire full team • Owner’s Team provides all Owner functions • Trained, and function as directed • Takes time • Must have sustained capital program

12. Organizational Alternatives • Outsource • Let your execution contractors manage themselves • Many Owners believe this should be the case • No Owner oversight • Less than desirable results

13. Organizational Alternatives • Pieced-Together Project Teams • Pick the ‘Best of the Best’ • Can work well • Must have defined Work Practices • Can developed relatively quickly • Costly

14. Organizational Alternatives • Project Management Contractor (PMC) • Acts on Owner behalf • Mobilizes quickly • Slightly more costly than direct hire • Comes with own processes and tools • Owner provides oversight and assurance • Potential conflict with other contractors

16. Organizational Alternatives • Challenges • Owner must recognize their roll in Project Planning and Execution and be willing to fulfill this roll • This comes at a cost • Hiring someone else to fulfill this roll cannot be successful without Owner direction • Be cautious of PMC but should be considered

17. Looking Forward

18. Looking Forward • Projects will remain active for next 5+ years • Future Owner portfolio needs must be considered • Consider fiduciary responsibility • Marketplace has a huge impact on this evaluation • Consider all business drivers • Build your selected approach into your Project Execution Plan

19. Q/A

20. Contact Information Paul “Mickey” Collins Pathfinder, LLC consulting@pathfinderinc.com www.pathfinderinc.com Gulf-Coast Office 16225 Park Ten Place Suite 500 Houston, TX 77084 P: (281) 292 – 5655 F: (281) 419 – 9977 Corporate Office 11 Allison Drive Cherry Hill, NJ 08003 P: (856) 424 – 7100 F: (856) 424 – 6414 Calgary Cherry Hill Houston Mexico City