How to Successfully Integrate CAPEX Projects in STO Events

The need for CAPEX Projects as part of STO events

When process plants get built, a long-range plan is made that outlines when turnaround (STO) events will need to take place. This is based on expected preventive maintenance, legal inspections and cleaning work. The ultimate goal is to keep the plant stable and running according to the required production capacity. This means limiting the amounts and duration of turnarounds as much as possible.

However, to maintain reliable, safe and effective operations, it will be required to keep investing in the plant by means of capital projects (CAPEX). Reasons can be new emission requirements, replacement of aging assets, reduced energy consumption or other projects that require a (partial) plant shutdown to implement. This implicates those parts of capital project scope must be executed during an upcoming turnaround.

In today’s world, plants are aging, while increasing needs arise to react to changing regulations and conditions. This requires more and more capital projects, increasing turnaround complexity even more in the future. Therefore, it is imperative to optimize capital project integration.

Key strategies for successful CAPEX and STO integration

More project work during a turnaround is often linked to a higher risk of schedule and cost overruns. The feeling with turnaround managers is often that this is caused by the project team. This may not be fair and does not present a way to improve. By taking away the causes of delays and overruns that might occur when capital projects and turnarounds are integrated, a sustainable solution can be found.

The below topics outline a strategy to better integrate capital projects and turnarounds. Every project and turnaround team should align on these topics:

Setting the right timeframe

The overall timing of turnaround events gets determined years in advance and is set in stone. On the other hand, specific capital project scope only gets determined at a late stage, when planning and scheduling of turnaround work is well underway.

This means that it is important to determine as early as possible what project(s) will have scope during turnaround events. This then imposes constraints on project turnaround scope and sets a baseline that can be controlled.

Aligning objectives to reduce downtime and costs

Turnaround events have as main objective minimizing downtime and therefore the amount of scope. If possible, maintenance and project scope are carried out when the plant is operating. However, projects aim to minimize cost and maximize plant performance and layout. The result is that sometimes engineers need to implement changes to the design, increasing costs, but decreasing turnaround scope contributions. This is a fundamental conflict of interests and often gives rise to tension between the Operational and Capital departments within companies.

Aligning objectives up front can prevent major arguments and helps obtaining the right scope and budget earlier on. Making performance indicators measurable provides a basis for measuring success.

Defining and managing scope effectively

One of the biggest issues is how decisions will be made on whether to accept new project scope into the turnaround scope.

A clear scope change management process needs to be implemented between the project team and turnaround team. This includes a clear set of rules that either rejects late project suggestions, or (if critical project scope is identified) requires the steering group accept the accompanying increase in risk to the turnaround event.

Ensuring proper organizational integration

Setting up lines of communication and reporting between the site departments, turnaround team and contractors is already a huge challenge: many use their own systems and communications are often verbal or in rudimentary formats. When project teams and their contractors are added as well, a perfect storm occurs that makes it challenging to effectively and timely steer a turnaround event. This is true from the early planning stages to execution and close out.

Agreement on communication lines, reporting formats and responsibilities need to be agreed well ahead of time, so that project and turnaround managers can make the required preparations.

Aligning work planning

Turnaround scope is organized into detailed work packages, ensuring contractor personnel have precise instructions for field execution. In contrast, project teams typically deliver construction packages at a higher level, grouped by discipline, making them difficult to integrate with turnaround planning.

When a turnaround contractor is responsible for both maintenance and project installation, and the turnaround planner is scheduling project work, the project scope must be provided in detailed work packages rather than broad construction packages. However, breaking down construction packages into work packages is not a typical responsibility of the project team.

A cost-effective solution is for maintenance planners, who specialize in creating detailed work instructions, to develop project work packages using Issued for Construction (IFC) documents provided by the project team.

A recent shift towards Advanced Work Packaging (AWP) is helping project teams improve work preparation and execution. By adopting AWP principles, capital project planning aligns more closely with turnaround execution, enhancing efficiency and integration.

Conclusion

If project work is scheduled alongside a turnaround event, it inevitably increases the risk of schedule overruns. However, this risk can be significantly reduced through early agreement on a well-structured integration plan and strict adherence to it.

To ensure seamless execution, project managers must be informed of the integration plan during the early front-end development phase. This allows them ample time to complete project engineering and procurement well in advance of the turnaround event, minimizing plant shutdown time and enhancing overall plant operating efficiency.

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