Small Project Alliance for execution of projects

Purpose of Presentation
To introduce the Small Project Alliance for execution of projects Vision Definition Strategic objectives Strategic roadmap Small Project Alliance key drivers Overall project development & implementation diagram Similarities & differences Generic roles and responsibilities How will we manage accountability Procurement Bidding Process Estimating Planning & Scheduling Cost Reporting Invoicing

Vision
To be an indispensable and trusted partner in the development and execution of Sasol Projects This will be attained through Responsiveness; Availability; Flexibility; Service Efficiency (cost, schedule, quality and safety); and Seamless integration of our service delivery, work methods systems and procedures with that of all stakeholders.

Definition of a Small Project

Not new technology Not complex (not more than two process steps) Not Sasol core technology No licensor or proprietary equipment involved Low technical risk & low business risk SHE/EIA under existing approvals/agreements Cost Guideline < R20 million Capex

Strategic Objectives

Total alignment with all Sasol Technology Stakeholders Implementation of elegant, Fit for Purpose work methods & procedures (realising the benefits of low hanging fruit) Quick turnaround on project development & implementation Containing cost of services below 20% Leveraging Sasol Technologys resources on low risk projects

Strategic Roadmap

Define the rules of the game and get buy in on the operating model Facilitation through learning curves Internal (Sasol Technology) Change Management Performance metrics & control by Alliance Steering Committee(s)

Small Projects Alliance Key Drivers

Establish clear focus on Client objectives Maximise use of Alliance partners resources Reduce workload of Sasol Technologys resources Strive for continuous alliance improvement in the SPA execution system and procedures Develop trusting relationships between the alliance, its Clients and Sasol Technologys services All transactions take place in an environment of trust, openness and mutual respect Responsiveness Availability Flexibility Service Efficiency

OVERALL PROJECT DEVELOPMENT & IMPLEMENTATION DIAGRAM (QUALITY MANAGEMENT PLAN)

Operations Profitability Improvement (OPI) Work Manual
Prelim Process Proposal oPFD & MFD requirements Hazop Studies & Safety File Basic Economic Evaluation Opportunity Definition Conceptual Proposal Scope of Work definition & doc. oEng. Specifications oBasic Engineering Package (BEP) Technical Integrity Start-up assistance Evaluation and handover

Discipline Eng. Work Procedures

Engineering Requirements Interference Requirements Deviation Management Master Documentation & Checklists End of Job Docs requirements

Project Management Procedures & Master Docs/Checklists

Info & Kick-off reqments Value Improvement Practices (VIPs) Hazops Constructability Reviews Gate Readiness Review (GRR) Project Execution Plan (PEP) Ready for Construction (RFC), Ready for Operation (RFO) etc.

Cost Engineering Work Procedures & Master Docs

Estimating Cost Control oControl Base oVariations oCost Flow oClose-out & capitalization Project Execution Planning

Procurement & Supply Management Procedures

Procurement of Goods Procurement of Services Surplus Materials Master Documents oApproved Vendors oChange Management oOrder Authorization

Similarities & Differences between the normal way of doing projects and the Small Project Alliance way of doing projects

Sastech Proper Owner Sastech Execution Group Project Management Team: Sasol Technology Project Execution EPC, EPCM Construction

Sastech Functional Governance EM CE

Small Projects

Owner
(Engineering Mngt) (Cost Engineering) (Engineering) (Procurement & Supply Mngt)

Sastech Execution Group

SPA
- Front End Loading (FEL)
- Operations Profitability Improvement - Engineering (Eng) - Engineering Procurement Construction Mngt (EPCM) - Construction Contractor
(OPI)

Eng

P&SM Legal SHER OPI

(Operations Profitability Improvement)

Less interfaces

More interfaces

The same

GENERIC ROLES AND RESPONSIBILITIES

FRONT END LOADING
Concept Development Basic Engineering (BE) - BEP sub-contracted to SPA PM/Engineering/Construction input (including Hazops, Area Classification, VIPs, EIA) ENG R/A R/A A/C A/I SPA C/I C/I R/I R/C

EXECUTION
Detail Engineering & Procurement Construction & Commissioning Assistance Process Intent/Engineering Intent Communication Gateway (Partner) Project Management, Engineering Formal Project Actions (e.g Hazops, VIPs, RFC, RFO)
ENG

SPA R/A R/A C/I C/I R/A R/A

C C R/A R/A C/I C/I

R: Responsible A: Accountable

C: To be Consulted I: To be Informed

ENG = Operations Profitability Improvement/Hub/Process, Mechanical, Civil, Instrumental & Electrical Engineering

How will we manage the Accountability

SPA TEAM
Quality UP Cost DOWN Schedule DOWN

Apply Scope Definition Follow interface procedures Integrate Quality Management Systems in all SPAs Ensure alignment with Clients and Sasol Technology

Good Scope Definition

Reduce turnaround times by integrating approvals

Conduct Scope + Resources Analysis

Plan resources Apply Fit for purpose systematic procedures

Procurement
Bidders List Alignment between Sasol Technology & Alliance Contractors bidders list Continuous evaluation of bidders on the list Bidding Process The SPA team decide on the required shortlist of a specific discipline Determine the nature of the scope Schedule of rates Provisional quantities with rates Measured Bill of Quantities

Bidding Process (continued)

Finalise the RFQ Documentation Commercial Terms Specs & Standards Scope Description Bill of Quantities Preambles Invite Bids Bids must be sealed & addressed to the SPA Team

Bidding Process (continued)

Tender Opening Tenders to be opened by the delegated Small Project Alliance (SPA) representative in the presence of the Procurement &Supply Management (P&SM) representative and client Bid adjudication The relevant SPA Team with the assistance of Cost Engineering will adjudicate the bids The SPA team including the relevant P&SM representative & client will appoint selected bidder

Estimating
Alliance Partner Roles & Responsibilities Ensure that the scope is properly & clearly defined from available information Prepare Bill of Quantities in cooperation with Cost Engineering Alliance Partners & representative Compile an estimate using available data bases Sasol Technology - Estimating Department Verify the estimate against the data base used by Sasol Technologys estimators Add Sasol Technology Man-Hour Component

Planning & Scheduling

Alliance Partner Provide a detailed schedule for each project (The type of Project will determine the level of detail) Maintain the detailed schedule throughout the project Cost Engineering Sasol Technology Coordination function Ensure that all schedules are maintained and communicated to the relevant parties

Cost Reporting
Alliance Partner Detail information regarding financial movements during reporting period to be forwarded to the C.E representative on the SPA Team VPs Approved PVPs raised Site Instructions Change Orders Purchase orders placed Letters of intent issued

Cost Reporting (Continued)

Cost Engineering Sasol Technology Typical information to be transferred to Alliance Partner All SAP transactions processed during reporting period All Sasol Technology man-hours expended during reporting period Cost Report Approval The cost report will be represented to the weekly team meeting for approval before it is represented to the client and signed by Sasol Technology

Invoicing

SPA Management Team The relevant member will submit their invoice, with approved back-up, on agreed dates to the CE Sasol Technology for verification Verified invoices will be tabled for approval by the relevant SPA Team The responsible Sasol Technology Officials will do the required entries into the SAP system to ensure timeous payment

Small Project Alliance for execution of projects