TOGY talks to
A Fluor executive on Kuwait’s mega-projectsOctober 25, 2018
Menko Ubbens, senior vice-president and project director of Fluor, talks to TOGY about the significance of the Clean Fuel Project (CFP) and ZOR developments, new technologies at these projects and how Kuwait can manage its mega-project workload. Fluor provides engineering, procurement, fabrication and construction (EPFC), maintenance and project management services for downstream projects in Kuwait, and is also active in power generation and infrastructure.
• On dealing with lack of skilled labour in the market: “One of the significant challenges in Kuwait is the timely availability of skilled labour. To mitigate this challenge, we adopted a modular strategy for the Al Zour project which entails building much of the facility outside of Kuwait, in this case at COOEC-Fluor, in China.”
• On Kuwait’s engineering and construction sector: “In a way, the Kuwait market is relatively small because there are only a few players but the prospects are very significant because of the expected investment volume.”
• On mitigating possible challenges: “By carefully planning for the investments, Kuwait can prevent the market from overheating, which would create more challenges in getting sufficient skilled labour, supervision and construction equipment or overload of its infrastructure.”
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What is the overall significance of the CFP and Al Zour projects?
These are very significant for the Kuwaiti economy, as they will allow Kuwait to refine more of its own products, rather than purely selling crude. It will generate a lot of jobs for Kuwaitis and allow Kuwait to take a larger share of the market. These refineries are brand new, so from an environmental and energy efficiency perspective, they are state of the art.
Kuwait is short on diesel. The CFP will produce ultra-low sulphur diesel, which will be needed going forward, so it is also timely that these investments are there to match the need to produce greener fuels. Car manufacturers are adapting to new standards, such as EU standards, and require cleaner fuel for their vehicles.
The Al Zour refinery will also be one of the world’s largest refineries upon completion, and that is indicative of the ambition of Kuwait. We also know that there are plans to expand the refinery, with studies ongoing.
Could you walk us through the innovative technologies being introduced in the CFP?
The reformers use Haldor Topsøe technology, and these are the largest hydrogen units in the world. This is obviously very advanced. Hydrogen presents difficulties because it is such a small molecule, and the larger the compressors get, the more difficult it becomes from a design and engineering perspective. The sulphur technology is Shell Global Solutions. Both technology providers recently upgraded their catalysts, so we were able to develop the project with the modern catalysts.
The project’s buildings, such as its administration buildings, laboratory and control rooms, are all state of the art from an ergonomic, lighting and acclimatisation perspective. We worked on implementing many green building aspects, including energy conservation, high thermal resistance windows and different techniques to recycle heat.
Emissions from the boilers and incinerators meet very strict environmental regulations. We have state-of-the-art environmental monitoring systems, which monitor not only emissions but also noise to comply with all local and international codes. The flare stacks are very high to ensure dispersion that secures very low concentrations of hydrocarbons or pollutants near populated areas.
The CFP and the ZOR project use the latest technologies, and are a step up from older refineries in other parts of the world.
What were the main challenges that you faced when working on these projects, and how have you addressed those issues?
One of the significant challenges in Kuwait is the timely availability of skilled labour. To mitigate this challenge, we adopted a modular strategy for the Al Zour project which entails building much of the facility outside of Kuwait, in this case at COOEC-Fluor, in China. These modules are welded, tested, approved and signed off on by the client; so that once they are fabricated they are ready to be installed when they arrive in Kuwait.
The benefit of this approach is that if the 6,500 people in China would need to work in Kuwait, I would probably need 10,000 to 12,000 people to do the same amount of work here. That is simply because our employees in China work in our own yards in optimal conditions with covered workshops and cranes and all the tools they need close by. In Kuwait we would have to set up separate shops and deal with less skilled labour and would also have climatic challenges.
What gives you a competitive advantage in Kuwait?
The fact that we are able to produce modules at our own facilities allows us to drive down costs to the benefit of the Kuwaitis, thereby winning work. This also makes the work more foreseeable because the conditions are more predictable. We also reduced the number of craft workers required onsite in Kuwait. That’s a cost saving and schedule advantage, because we have much more control over the situation.
When dealing with the more generic issues of how you are set up as an organisation and the skills and experience of your team members, their familiarity with the type of technology is important. We are extremely familiar with the type of specifications that KNPC and KIPIC use. We know how they work, what needs to be done and what is optional.
Fluor also recently acquired Stork so that we could better extend our support to clients to operation and maintenance readiness. We can take a project from its inception all the way into operation and maintenance. We know that certain Kuwaiti companies are looking to outsource some of the maintenance, so this could be a good fit to offer a full suite of solutions to our clients.
How do you see the Kuwaiti engineering and construction sector evolving in the years to come?
In a way, the Kuwait market is relatively small because there are only a few players but the prospects are very significant because of the expected investment volume. If you have an ambitious programme, it is not just about having and spending the money, but also about managing those major investments well.
By carefully planning for the investments, Kuwait can prevent the market from overheating, which would create more challenges in getting sufficient skilled labour, supervision and construction equipment or overload of its infrastructure.
All of our work in Kuwait is executed with local subcontractors, which is very important to us because they know the market and have established themselves here. They have a certain volume which continues to grow over time so that they can invest and maintain their experienced supervision and crews because that will ultimately provide Kuwait with a more predictable, competitive and sustainable investment.
Companies also need to capture the capabilities of the individuals who have had the experience of driving a mega-project from start to finish. We want to see people who have performed well in these projects continue to get involved in large upcoming investment programmes.
The CFP was Kuwait’s first mega-project in more than 20 years, so all the different aspects of financing, controlling the project and training new people have been new challenges for some Kuwaiti companies. On a day-to-day basis we are confident that things will happen, but if more projects go forward, you need the right, experienced people to lead those major projects. If you don’t have the right people, it’s going to be challenging.
What role do multinational companies play in training Kuwaitis?
We have undertaken a lot of training of Kuwaitis, including during the CFP and ZOR projects. For example, for the ZOR project, we hosted two groups of 20 people for six months in our Amsterdam office to get them integrated into the team, with an assigned mentor, a learning programme and tests. We have now completed the first round of site training for a group of Kuwaiti nationals from KIPIC, and in September we will start with the second batch of KIPIC employees who will be integrated into our team. These groups also visit COOEC-Fluor to experience state-of-the-art fabrication execution.
We want to support the oil sector in developing its employees and have them immersed in the detailed design and project execution experience. Having employees learn processes adopted by an international EPC company will help them be better equipped to do their job.
What are the company’s long-term development goals in Kuwait?
We would like to leverage what we developed and learned over the years in Kuwait to better maintain a permanent presence in Kuwait. That allows us to further service the market and optimise what needs to be delivered.
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