While a petrochemical complex – even the world’s biggest – may not have the same ring to the ears as the tallest building in the world or one of the planet’s most visited attractions, it has lot more in common with them than most people think. And no, we aren’t just talking concrete and steel and the sea of humanity it usually takes to build such marvels of engineering. Grand ideas like these rely on Project Management. Of the best kind, no less. L&T Hydrocarbon Engineering’s (LTHE) work on Reliance Industries J-3 Program which will firmly establish RIL as one of the world’s most dominant refining and petrochemical companies is a study in how superior project management can help deliver even the biggest, most complicated projects, with ease.
Nestled alongside the Gulf of Kutch, 150 kilometres from the western coastal frontier of India, Jamnagar is home to Reliance Industries biggest capex investment in the petrochemical business. RIL’s Jamnagar Refinery and Petrochemical Complex, envisioned back in 1996 led to the development of the world’s largest grass-roots refinery complex, with a capacity of 27 MMTPA, delivered in a record thirty-six months. This capacity was doubled in the year 2009, with the commissioning of the second expansion phase, the Jamnagar Export Refinery Project (JERP). JERP was geographically located in the Special Economic Zone, adjoining the first phase, which was in the domestic tariff area. Given the economic zone it was located in, JERP was conceived with the sole objective of increasing exports of diesel and gasoline to the United States and European markets. The two refineries together amounted to world’s largest refining and petrochemical complex, in a single location.
Fast forward four years and the third expansion wave was incepted in the form of J-3 Expansion Project. J-3 comprises the world’s largest Pet Coke Gasification complex (PCG), the largest Ethylene Cracker, and a Para-xylene unit (pX-04), whose addition has made RIL the world largest para-xylene producer. In addition, there are downstream units such as Mono-ethylene Glycol (MEG), Low Density Poly Ethylene (LDPE). While the first two phases were focussed at increasing crude oil refining capacity, and production capacity of petrochemical products such as Poly-propylene, Para-Xylene, J-3’s prime objective was to turn the entire refining and petrochemical complex into a bottomless refinery, by utilizing the pet coke produced from the two existing refineries, to produce syngas, which along with the off-gases produced in the two refineries, will be utilized in the Refinery Off-gas Cracker (ROGC). ROGC will produce Ethylene, which will serve as feed for downstream units, such as MEG, LDPE and LLDPE.
In the past 2 decades, RIL has taken the refining and petrochemical world by storm, strategically rolling out projects aimed at maximizing market capitalization, while transforming Jamnagar’s manufacturing division into a self-sustained unit, insulated by extrinsic market and economic fluctuations. While it was RIL’s resolute vision and business acumen which made for impeccable timing in its endeavours, it is only fair to acknowledge the role of LTHE as the prime mover that propelled this vision (both J-3 and its antecedents) into reality. LTHE has played an integral role, by adapting itself to methodologies, and operational standards that qualify as the building blocks of such a mammoth undertaking.
J3 - A Test of Endurance and Dexterity
Mega projects such as J-3, by their very definition have a propensity to be challenging. With an estimated man-hour scope exceeding 300 million - that in comparison is 14 times of what was consumed in erecting Burj Khalifa - the gargantuan quantum of work and the associated resource mobilization and management, was the foremost and fundamental challenge. J-3 on a program level had a concreting scope at 930,000 CuM, almost thrice the scope of Burj Khalifa; and a structural steel scope of erecting 180,000 MT, equivalent to 25 Eiffel Towers. Both above and underground piping totalled 13.1 million IM. To put matters into perspective, imagine all spools/pipes laid down in a linear sequential manner, covering a distance of 2,431 km, which is the equivalent air distance from Jamnagar in Gujarat to Itanagar in Arunachal Pradesh. Similarly, Electrical and Instrumentation cabling scope was also exceedingly high at 12,389 km, the exact air distance between New Delhi and New York City. In addition to the massive project scope, the plant had a highly complex layout with only 20% of total plot area available for carrying out construction operations. This was heightened by the limited crane and vehicular access, and the fact that above ground piping works, were concentrated at an average elevation greater than 20 meters.
Building Blocks
Human Resources is an integral part of every professional endeavour, and in case of J-3, given the quantum of work, the role of project management personnel was key. To meet peak staffing requirements, it was decided to develop and operate a dedicated Human Resource Cell to conduct and co-ordinate pan India recruitment drives. Given the temporary nature of the project coupled with required levels of resource saturation, 2,317 project management staff were mobilized, of which 70% were new. This fraction of project management staff, necessitated a well thought out hiring strategy and a centrally controlled allocation, for mapping and positioning of key roles. Furthermore, it required an in-house training program focussed at imparting necessary functional training, aimed at alignment and orientation of the new recruits with the prevailing organisational, operational, professional, and performance standards.
The appointed faculty would create awareness on prevailing organisational process assets, enterprise environmental factors, and especially in areas that are in direct correlation with the project performance parameters such as HSE standards. In addition to project management staff, support staff and HSE personnel for supervisory role were sourced through agency hire. Such a huge influx of human resources required dedicated and prudent efforts towards management, especially in areas such as welfare and motivation. At J-3 a total 33,371 hours were spent on functional training, with a coverage of 75 different topics. Additionally, frequent interactions were organised with the leadership team, to counsel, motivate, and identify emerging talent. Annual sports events along with corporate retreats were organised for both project management staff as well their families.
The second aspect of resource management, which counted as a major building block in the successful execution performance, was sub-contractor and workmen management. A total 1,091 sub-contracting agencies were engaged in J-3, across 7 project sites. Of these, 60% were first time associations, which were built through dedicated efforts made by special Task Force Teams, deployed to resource rich regions across India. These teams dedicated their efforts to selection and scrutiny of new agencies, to insulate the operations from impacts caused by seasonal exodus of workmen, as well as cater to resource saturation and peak requirements. Additionally, incentive loaded mobilisation schemes were introduced to facilitate LTHE’s existing agencies in their efforts to enhance their mobilisation and retention capabilities. A centrally controlled team was appointed to co-ordinate and converge the efforts of the task force teams and IR teams of respective sites. This team oversaw all the activities pertaining to the induction and gate pass creation process for each workmen and staff. To ensure the required skill composition and competency levels, these teams were assisted on a continuous basis by experienced project management staff, to evaluate and validate the multidisciplinary skills being mobilized. This high degree of process control helped the J-3 project team get the right men for the right jobs at the right time. Once mobilized, the central project office oversaw the deployment of major sub-contractors at program level, while each site team carried out the same at WBS level. This process of workmen induction was later awarded a Bronze Medal at the ICON Awards 2017 across LTHE CS.
A total of 250,000 workmen were mobilized, evaluated on their skill, and underwent a pre-deployment HSE training, along with a work-at-height training during induction. Arduous as it was to mobilize such a large workforce, it was really managing this sea of humanity that presented the bigger challenge. At its peak, there were 35,000+ workmen, with a sustained average of 30,000 observed over a period of 8 months. Operating logistics, and maintaining accommodation for such numbers daily without any hiccups was extraordinarily complicated. To ensure incident free travel - to and from work - a traffic marshal was appointed with each workmen vehicle.
Repeat accolades from RIL confirmed LTHE’s superior workmen camp management efforts. To keep track of each mobilized agency and account for every single workman, a biometric system was installed, with 135 biometric readers at different locations. This system, after being mapped with the corresponding government issued ID, such as PAN and AADHAR Card, made the wage disbursement process smooth and transparent.
At J-3, safety during operations, and quality in product was a prime key performance indicator, which necessitated monthly evaluation of all active agencies. As a part of feedback mechanism, a project management staff was allocated to each sub-contractor to cater to the agency’s interest. There were also periodic interactive sessions organised to motivate and give functional direction to all operating agencies.
Chaired by senior management personnel these sessions helped create a paradigm shift, from sub-contractors to business partners.
The entire Jamnagar program when seen from LTHE’s perspective featured a great deal of complexity in terms of managing communications, maintaining cross-functional synergy among all stakeholders, and ensuring a high degree of clarity in responsibility sharing. Since communications management greatly influences the success of project management operations due attention needed to be paid this area of operations. So, from understanding the project objective and product deliverables to ascertaining the required levels of customer satisfaction there were plenty of identified and un-identified factors which demanded dedicated monitoring and feedback. To ensure smooth and efficient communication, both RIL and LTHE operated with a Central Project Office, to co-ordinate on techno-commercial and other significant matters at program level. Meanwhile, the project sites focussed upon execution of the project execution plan, in order to meet quantitative and schedule completion targets while adhering to project performance parameters. To exercise required levels of control over the execution process and other project management operations, a Project Execution Plan was drafted, prior to work commencement. It served as a guiding light throughout the project life-cycle. On top of this 90 day look-ahead focussed on immediate targets and interim project milestones were submitted. Monthly targets were further reconciled at the completion of respective work month, and the performance evaluated. The observed scope creep at program level has been a little more than 44%, which necessitated a formalised Change Management system. This change management system, combined with consistent project management efforts, ensured swift and prompt decision making and a heightened level of project control.
Project management operations at J-3 were mainly affected by materials management. Given the mammoth project size, the entire program was composed of projects geographically distant from one another. Now, since there were other agencies besides LTHE operating within the same, or at different locations, RIL had centralised the operation and physical location of majority of deliverables such as auto re-bar shops, concrete batching plants, pipe fabrication shops, and other lay-downs. Consequently, arrangements had to be made to source material from these points across the multiple locations being operated LTHE. Apart from the cumbersome task of material handling, logistics, and documentation, the limited stacking place at site locations required development of infrastructure such as material stacking yards. Hence, every item to be shifted required careful planning, in line with monthly plan requirements so that it arrived Just-in-Time (JIT) for consumption. Close to USD 2.8 billion worth of material was handled, managed, consumed, and accounted for during the 55-month program schedule.
Besides material management, timely and sequential material deliveries, in-sync with the forthcoming milestone and the prevailing monthly plan, was a key building block for schedule performance. A robust communication system and detailed execution planning ensured material flows in a streamlined fashion, creating limited inventory of both material and work-in-progress. The constrained work environment and divergent work composition were further affected by inter and intra organisational interfacing, owing to multiple agencies executing composite works within a given location. This required a collaborative approach between LTHE and RIL, to ensure that project management processes were carried out with the required synergy and in tandem with the works being executed by other agencies, while minimizing the impact on project management performance.
HSE at J-3, has not just been an essential project performance indicator, but also a game changer. International operational standards with incident frequency rates as stringent as 0.95 (incident per million man-hours) led to a paradigm shift in LTHE’s perspective and reception towards international level of HSE operation standards. The foremost step in this direction was to align LTHE and RIL’s systems to create the required levels of synergy. Striving for these standards and operating parameters, the project team ensured an optimum composition in workforce, maintaining a 50:1 ratio of Workmen to HSE Supervisor. This in turn necessitated training and orienting the entire project management staff, as per HSE operational parameters required at J-3. The concept was further extrapolated to align the business partners with HSE performance requirements, which was made successful by conducting periodic interactive sessions, chaired by senior management and leadership team of LTHE at J-3. The execution and success of all these measures, made it imperative to have a “Visible and Felt Leadership”. Management safety walk-arounds, weekly Apex HSE Committee meetings, became the cornerstone in both achieving required HSE performance standards and the conducive environment to drive a cultural transformation in HSE.
An HSE credibility system became an essential feedback mechanism, which further helped in increasing individual accountability, and for the first time ever, providing a tangible framework for identifying areas of concern and improvement. This system of evaluation was later awarded a Gold Medal at the ICON Awards 2017 across LTHE CS.
The gaps identified as part of this evaluation were replenished by behavioural leadership workshops aimed at changing the way HSE is perceived by an individual.
Innovations such as mass sms, marquee announcement, HSE exhibition centres, periodic mass tool-box and crafts meeting, campaigns, flip charts, were deployed in an efficient and precise manner. Furthermore, open Town Hall meetings facilitated a two-way exchange on HSE. The motto was consultation and cooperation to engage and manage safety as a personal choice, rather than a compulsion. This was made possible via value driven concepts such as Just A Minute (JAM), One-to-One communication, Gang Safety Leader and Mass Housekeeping drives.
The net result of all these meant that the program achieved a cumulative frequency rate for total incidents (TRC) of 0.50 against a benchmark of 0.95. At a program level LTHE managed to clock 54 Million safe man-hours, which in case of project sites such as pX-04 and Pet Coke Gasification unit in Domestic Tariff Area stand at 30 and 44 Million respectively.
Developing New Capabilities and Competencies
The Jamnagar phase 3 expansion project also resulted in capability enhancement and opportunities for competency development. During the entire course of project, LTHE stretched beyond its execution and operational capabilities by delivering monthly peak production quantities of 48,500 CuM of concreting, 11,500 MT of structural erection works, 1.54 Lac IM of underground piping laying, and more than 900 km of E&I cabling. In above ground piping, it erected more than 6.7 lakh tested about 10 lakh and boxed up around 13 lakh IM of piping in a given month.
One of the major breakthroughs, however has been in terms of resource management. Not only was LTHE able to mobilize 2,317 project management staff and 1,430 agency hired support/supervisory staff, LTHE also managed a peak strength of 1,523. The rich talent pool helped it identify top performers who were converted into tenured staff members.
With over 7 operating project sites, there was an immense opportunity for job rotation, enrichment and enhancement of competencies. The program allowed LTHE to train and develop execution planners and elevate Area Managers to the role of Project Managers. With the appointment of a sponsor for each sub-contracting agency to look into their interests and concerns, and frequent interactive sessions to share knowledge and ideas; there has been a shift in the way sub-contractors are perceived, transforming the relationship into that of business partners and associates. This in turn has led to an increased level of ownership and understanding among all our partner agencies, with regards to the required operational standards of safety, quality and performance.
LTHE’s impeccable planning and project management efforts, coupled with a resolute stand against all odds, has translated into successful delivery of 6 out of 7 project sites, completely in-line with the required project management performance levels. Pet Coke Gasification Unit located in the Special Economic Zone (PCG SEZ) is the last project undergoing its final run to completion. All the projects combined LTHE has thus far delivered 121 Technological Structures, 58 Pipe Racks with a combined span of 8,620 Meters, 13 Plant Interface Buildings and 12 Sub-stations. Additionally, it has validated and trained 2,500 scaffolders and created an online database for them in its EIP portal.
Beyond J-3
On April 14, 2017, LTHE commenced the Pre-Turn Around (Pre-TAR) works for a Coke drum Replacement Project (CDRP), in the ISBL are of Jamnagar’s DTA Refinery (Phase 1). CDRP, is part of the Coker Revamp Project, and is intended towards expansion of the existing Delayed Coker Unit which processes light and heavy Vacuum Residue (VR) from crude processed in upstream units of CDU/ VDU. It is proposed to revamp this plant from 161 KBPSD to achieve a target capacity of 220 KBPSD. DTA DCU is located within the Jamnagar Refinery complex with 8 Coke drums in Set of 6 Coke Drum unit (1st, 2nd & 3rd Block) and 2 Coke Drum units (4th Block). Currently DTA DCU unit has a capacity of 161 KBPD. RIL has planned to enhance plant capacity by constructing a new 2 Coke Drum units (5th Block) and replacing the existing 8 Drums. The replacement of existing drums would be done in a sequential manner (multiple shut-downs). LTHE’s current scope comprises various structural strengthening and piping erection works for Blocks 1 to 4. This is the third such endeavour across the globe and the first to be executed in India.
