EPC OVERVIEW

stands for Engineering, procurement and construction

EPC overview

EPC is gaining
importance
worldwide. It
requires good
understanding
by the EPCC
to return a
profit
An EPC
contract is a
complex
agreement. In
a global
context, EPC
management
is more
complex.

EPC contract the contractor designs the

installation, procures the necessary materials
and builds the project, either directly or by
subcontracting part of the work. In some cases,
the contractor carries the project risk for
schedule as well as budget in return for a
fixed price, called lump sum or LSTK depending
on the agreed scope of work.[1]
When the scope is restricted to engineering and
procurement, this is referred to as an EP, E and
P or E+P contract. This is often done in
situations where the construction risk is too
great for the contractor or when the owner
does the construction

Comparison of EPC/EPCM
EPC (engineering, procurement, and
construction )

EPC company is able to manage all

levels on site, with Construction as
well

EPC contract is more critical and

destined to the biggest companies it is advantage indeed.

EPCM (engineering,
procurement, and
construction
management

EPCM company is only managing

build site as a Site Engineer
(Supervisor on behalf of final
customer.

EPCM contract is smaller type of

contract than EPC, but safer for
EPCM company

IMPORTANCE OF EPC
An owner decides for an EPC contract for reasons that
include
Reduced stress for owner
easy work and growth of the company.
Single point of contact for owner simplifies
communications.
Ready availability of post-commissioning services
Ensures quality and reduces practical issues faced in
other ways[clarification needed]
Owner protected against changing prices for materials,
labor, etc.
Cost is known at the start of the project

Owner defines to the EPC contract :

Scope and the specifications of the plant

Quality
Project duration
Cost
The cost (the price to be paid to the
EPCC) is negotiated and finalised and
paid in mutually agreed installments.

Functions
Engineering
Functions
Initiation
Planning
Estimating ->
Request for Quote
Design

Procurement Functions

Purchasing

Expediting

Receiving

Invoicing

Construction Functions

Construction Schedule
On-site Material Handling
Building Activities
On-site Client Communications
Closing

Projects Success by the owner and the

EPC contractor
Owner Defines
Defines guarantees
well
Defines scope and
quality very carefully
Defines milestones
meticulously
Defines LD/penalty
clauses
Makes payment terms
very specific

EPC Contractor improves

Adopts similar terms and conditions

as owner regarding quality,
guarantee etc., for
subcontracts/vendors

Do not keep terms open-ended

Coordinate vigilantly to reduce

chances of errors at site.

Global arena

The EPCC
must have
data and
expertise
in all the
required
fields.
Some
important
areas are

Local market conditions for materials

and labour availability and capabilities
Local code, statutory etc.,
requirements
Availability of local supervisory
personnel
Availability of local engineering
services
Local and global subcontractor
experience and performance

Cost Certainity & Owner Responsiblity

Cost certainty
One main reason an owner may
prefer an EPC arrangement is
"certainty of cost". An EPC contract
binds the Contractor to deliver the
project at a firm, predetermined
price regardless of any increase in
costs that the Contractor may incur
after the contract is signed.
However, changes to specifications
initiated by the owner (better
finishes for example) may be
incorporated through a "change
order". Here, the owner and the
Contractor negotiate the price to
make the changes and these
changes/prices are recorded in the
change order document

Owner responsibility

To ensure quality, the owner must

select an experienced EPC
contractor. A third-party or in-house
consultant can verify the design of
major structures and inspect the
main equipment installations.

Changes in scope of work can affect

project schedule, cost and risk. Such
changes are the responsibility of the
owner

EPC PROJECTS
OVERVIEW

Oil & energy projects

Oil and Gas Project Categories

Carbon Capture and Storage Facilties (11)

Offshore Field Development (Drilling-Subsea) (43
8)
Offshore Production Facilities (127)
Offshore Storage Facilities (1)
Onshore Field Development (Drilling) (146)
Onshore Production Facilities (112)
Onshore Storage Facilities (7)
Petrochemical and Chemical Refineries (128)
Pipelines (57)
Terminals (51)

Power and Energy Project Categories

Biomass/Energy Recovery Facilities (12)

Carbon Capture and Storage Facilities (17)
Coal-Fired Power Plants (75)
Electrical Transmission and Distribution (21)
Gas-Fired Power Plants (81)
Geothermal Power Plants (4)
Hydro Electric Power Plants (32)
Nuclear Power Plants (127)
Solar Power Plants (34)
Wind Power (102)

Projects types

Alumina Refinery (3)

Boiling Water Reactor (B
WR) (7)
Coal Export Terminal (1)
Coal Seam Gas (2)
Concentrators (2)
Condeep (2)
Condensate Field (9)
Crude Oil Terminals (4)
Drill Rig (11)
Drill Ship (1)
Fertilizer Plants (1)

FPSO - Floating Production,

Storage and Offloading (25
)
LNG Terminal (13)
Nickel Refinery (3)
FSO - Floating Storage and
Offloading (4)
Gas Compression (1)

Gas Field (73)

Gas Processing (6)

Gas To Liquids (GTL) Plants

(1)
Heavy Lift Vessel (0)

Jack Up Rigs (1)

Projects Types

Offshore Wind Farms (11)

Oil Field (99)

Solar Thermal (6)

Oil Refinery (59)

Oil Sands (12)

Onshore Wind Farms (13)

Solar Thermal - Dish and Sterli

ng (1)
Solar Thermal - Fresnel (0)

Open Pit Mine (55)

Solar Thermal - Parabolic (5)

Photovoltaic (12)

Solar Thermal - Tower (3)

Pipelay Vessel (5)

Solids Handling Facilities (1)

Pressurised
Water Reactor (PWR) (10)

Steel Plants (1)

SURF Systems (6)

Tailings (1)

Tension Leg Platform (TLP) (6)

Underground Mine (29)

Semi-Submersible (13)

Shale Oil and Gas (2

Slurry Pipeline (0)