P PDF

Saudi Aramco Manual
30 March 2016
Project Sponsor (PS) Guide for Type A & B Projects
Document Responsibility: Capital Program Efficiency Dept. / Capital Efficiency
Performance Division
Project Sponsor (PS) Guide

For Type A & B Projects
Previous Issue: 4 october 2015 Next Planned Update: TBD

Page 1 of 56
Primary Contact: Al-Awadh, Abdulhameed (awadhad) on +966-13-8809420
Copyright©Saudi Aramco 2016. All rights reserved.

Document Responsibility: Capital Program Efficiency Dept. / Capital Efficiency Performance Division
Issue Date: 30 march 2016
Next Planned Update: TBD Project Sponsor (PS) Guide for Type A and B Projects
TABLE OF CONTENTS
1 INTRODUCTION AND EXECUTIVE SUMMARY............................................................................................... 3
1.1 INTRODUCTION ............................................................................................................................................... 3
1.2 EXECUTIVE SUMMARY ...................................................................................................................................... 3
2 PROJECT SPONSOR ROLE DESCRIPTION ....................................................................................................... 4
2.1 APPOINTMENT OF PROJECT SPONSOR .................................................................................................................. 6
2.2 PROJECT SPONSOR INTERACTION WITH PHASES, STAGES AND GATES ......................................................................... 6
2.3 GENERAL DUTIES OF THE PROJECT SPONSOR IN PHASES, STAGES AND AT GATES .......................................................... 8
2.3.1 Maintaining Stakeholder Alignment ................................................................................................... 8
2.3.2 Ensuring Quality of Decisions and Completeness of Deliverables ...................................................... 9
2.4 PROJECT SPONSOR INTERACTION WITH FUNCTIONAL ORGANIZATIONS ....................................................................... 9
2.5 LEVEL OF PROJECT SPONSOR INVOLVEMENT ........................................................................................................ 13
2.5.1 Involvement by Project Phase .......................................................................................................... 13
2.5.2 Involvement by Project Complexity – A, B, C and C1 Project Types ................................................. 14
2.6 PROJECT SPONSOR DECISION MATRIX................................................................................................................ 15
3 CPED ROLE ................................................................................................................................................ 16
APPENDICES...................................................................................................................................................... 17
APPENDIX A: ROLE AND RESPONSIBILITIES IN STAGES AND GATES ..................................................................................... 21
FEL 1 Business Case (Gate 1) ............................................................................................................................ 22
FEL 2 Study Phase (Gate: Alternative Selection) ............................................................................................. 28
FEL 2 DBSP Phase (Gate 2: Freeze Project Scope) ........................................................................................... 34
FEL 3 Project Proposal Phase ........................................................................................................................... 41
FEL 3 Finalize FEL Phase (Gate 3: Project Funding) ......................................................................................... 42
Execution, Commissioning, and Ramp-Up (And Handover to Operations).................................................... 45
Guidance for Project Sponsor (Effect of Design and/or Scope Changes) ....................................................... 46
APPENDIX B - PROJECT SPONSOR SELECTION ................................................................................................................. 47
APPENDIX C - IPT ORGANIZATION ............................................................................................................................... 48
APPENDIX D - TRANSLATING BUSINESS REQUIREMENTS INTO OBJECTIVES .......................................................................... 51
APPENDIX E - PROJECT SPONSOR CHECKS AND BALANCES ................................................................................................ 52
Page 2 of 56
1 Introduction and Executive Summary

1.1 Introduction
The purpose of this guide is to explain the Project Sponsor’s role and
responsibilities as a key Capital Efficiency work process owner.
This guide also helps the Project Sponsor recognize various elements of the
Capital Management System (CMS) that are key enablers of success for the
Project Sponsor role.
It should be noted that this is not a standalone document. This guide contains
numerous references to the Saudi Aramco procedures, tools and templates that are
used to guide and assist the Project Sponsor.
1.2 Executive Summary
The Project Sponsor is usually an Executive for Type A and B projects, can be a
General Manager for Type B projects, and typically a member of Management
for Type C & C1 projects.
Project Type Project Sponsor
A Executive
Executive or General
B
Manager
C, C1 Manager
Project Types
Appointed by the Proponent organization, the Project Sponsor is accountable to
ensure the project meets the business objectives and is executed timely in the most
cost effective manner meeting business needs. The project sponsor is accountable
for the smooth execution during scope and design development through safe
startup of the facilities and timely closeout of the project. The Project Sponsor
role complements the traditional roles and responsibilities of the core functional
organizations like Project Management and Engineering Services. The Project
Sponsor has direct accountability for the success or failure of a project. The
Project Sponsor will actively engage and has the responsibility to:
 Safe guard the implementation of the FEL Stage & Gate process including
ensuring independent project Value Assurance reviews before each FEL gate.
The PS ensures that the project team has a response plan in place to address
and resolve Value Assurance findings/recommendations
 Ensure all necessary studies are completed and considered by the Integrated
Project Team (IPT) prior to selection of the appropriate alternatives/options
Page 3 of 56
for the project including decisions on trade-offs between cost, schedule, and
operability/functionality
 Confirm and clarify project business requirements and feasibility
 Decide on establishing and monitoring project targets, e.g., cost, schedule,
capacity, scope, etc.
 Support the IPT Leader in resolving issues/risks that threaten project success
 Enforce discipline necessary to properly plan and execute the project to avoid
rework of FEL phase/stage and/or major late design changes
 Ensure IPT alignment and team continuity is maintained and support the IPT
Leader in interactions with Functional Departments to ensure their direct
involvement in the project’s activities and deliverables
 Identify all stakeholders and ensure that they all engaged and aligned
 Approve or reject changes to the projects
 Present reliable and unbiased information about project status to the
management Committee
The Saudi Aramco Capital Management System (CMS) includes a set of checks
and balances such as Target Setting and Value Assurance to aid the Project
Sponsor and provide guidance as the project progresses.
As part of the CMS, there are measures in place at key decision points to assist
the Project Sponsor and document key decisions and the basis for making them.
The Project Sponsor is expected to have sufficient knowledge of the drivers for
successful project planning and execution to guide the IPT and serve as a credible
advocate of the Saudi Aramco project delivery work processes.
2 Project Sponsor Role Description

The Project Sponsor guides the translation of business requirements into detailed business
objectives (See Appendix D). The Project Sponsor makes trade-offs between cost,
schedule, and Facilities operability. Those decisions are guided by the project priorities
established by the Management Committee. It is the Project Sponsor’s responsibility to
communicate the objectives clearly to the IPT Leader (See Appendix C), to ensure the
team has sufficient resources to perform their work, and to support overcome obstacles
that threaten project success.
It should be noted the Project Sponsor has a responsibility not only to project delivery,
but also that the project successfully follows the CMS process through all stages, phases,
and gates. Overall success is achieved only with both objectives fulfilled.
The Project Sponsor is not the final authority on a project’s readiness to proceed to the
next Phase. At Decision Gates, Saudi Aramco Management Committee certify alignment
of a project’s business objectives with the Company’s strategy and priorities, and decide
on the project’s readiness to pass the Gate and proceed to the next phase.
Page 4 of 56
The IPT Leader reports to the Project Sponsor. The IPT Leader manages the IPT’s day-
to-day activities. Figure 1 illustrates the key role (with the Project Sponsor being the
focal point) between the Management Committee or Senior Management and the IPT
Leader.
Figure 1 - Interaction between Management Committee, Project Sponsor and IPT Leader
The Project Sponsor is responsible for presenting unbiased estimates of the project’s
expected benefits and costs to management. If the business objectives can be
accomplished for an acceptable cost and schedule, the Company has identified the “right
project.” Once endorsed, the Project Sponsor guides the IPT Leader and relies on the IPT
Leader and IPT members’ skills to develop feasible technical scope alternatives that can
achieve the business objectives and develop a robust execution strategy. The IPT Leader
is responsible for executing the project with discipline and sufficient oversight in order
to meet the targets established at ER Funding within a reasonable level of variance.
The Project Sponsor will always have a voice in what the project needs to accomplish
and how it will be accomplished, should some compromises be required. Subject to a
proper level of checks and balances (Target Setting and Value Assurance), the Project
Sponsor chooses between the technical and strategy alternatives presented by the IPT;
this is done by weighing the benefits, costs, and risks of each alternative against the
project’s business goals, priorities, and constraints.
The Project Sponsor will also decide on the project’s scope of work. With this authority,
the Project Sponsor has sufficient control over the project scope to ensure project success.
The Project Sponsor comes from the organization that directly benefits from the project.
The Project Sponsor position is not a permanent assignment. An individual is delegated
by the organization to serve as the Project Sponsor for the duration of the project.
Page 5 of 56
Normally, the Project Sponsors have a stake in project outcomes. In some form, they will
be involved in managing or operating the asset created by the project.
2.1 Appointment of Project Sponsor
At the beginning of FEL 1, the Proponent organization is responsible for
appointing a Project Sponsor by issuing a “PS Appointment” letter to FPD and
CPED Managers.
In event of Project Sponsor change, a proper turnover by the initially assigned
Project Sponsor to the replacement sponsor should take place. This turnover
should cover, at a minimum, project status, decisions made, and associated project
risks and should be preferably conducted in a meeting facilitated by the IPT
Leader. In such cases, a “PS Assignment Change” letter is to be issued to CPED
and FPD Managers notifying them of the changes.
2.2 Project Sponsor Interaction with Phases, Stages and Gates
The Project Sponsor’s role and responsibilities are described in detail under
Appendix A of this guide, and the below paragraphs give a summary of the work of
the Project Sponsor in regard to the stage and gate work process.
Figure 2 - Saudi Aramco Stage and Gate Work Process

Prior to the Design Basis Scoping Paper (DBSP) Gate (Gate 2), the Project
Sponsor directs IPT as follows:
 As the “process guardian”, ensures that the CMS process is followed
 Builds and maintains an IPT, ensure constant IPT alignment and team
continuity and support the IPT Leader in interactions with Functional
Departments to ensure their direct involvement in the project’s activities and
deliverables
 Supports the IPT Leader by addressing obstacles that threaten project success
Page 6 of 56
 Establishes and Approves the initial project targets, e.g., cost, schedule, and
operability through the Target Setting work process
 Guides decisions on project scope, project strategy, facility quality, and
schedule
 Facilitates alignment between internal and external stakeholders on
objectives, scope and strategies
 Confirm the project’s Business Case which includes the project’s economical,
commercial and technical feasibility assessments and identifying viable
options/alternatives to study further in the next FEL2/Study phase
 Finalize all FEL2 studies required to thoroughly analyze all
options/alternatives to guide determining the most optimal
options/alternatives
 Freeze the project scope by selecting and defining the most optimal
options/alternatives in an approved Design Basis Scoping Paper (DBSP) by
all stakeholders
After Gate 2 (the end of DBSP), business objectives have been endorsed by
Management and should not be changed unless directed by the Decision Maker.
The project scope is frozen and the project strategy is established to finalize
planning and begin execution.
The IPT leadership will transition from Facilities Planning Department (FPD) to
Project Management at the end of the FEL 2 DBSP Gate.
The Project Sponsor maintains the role of facilitating trade-offs, making decisions
in case of meaningful project variances and supporting the IPT in resolving any
project execution challenges.
The Project Sponsor’s role during the remaining project phases is as follows:
 Support the IPT Leader and guard the process by addressing obstacles that
threaten project success
 Obtain approval for changes to business objectives
 Establishes and agrees on final project targets, e.g., cost, schedule, and
operability through the Target Setting work process
 Monitor the project performance for achieving the established cost, schedule,
and operability/functionality targets/goals
 Approve or reject scope changes
 Maintain alignment with project’s stakeholders
 Ensure operations’ preparation and readiness for commissioning and startup
 Facilitate the signature cycle of the Mechanical Completion Certificate
(MCC)
Page 7 of 56
 Ensure safe startup of the facilities, delivery of the project results and timely
closeout of the project
It is important to note that despite the change of IPT leadership after Gate 2, the
Project Sponsor is still responsible for providing sufficient oversight,
guardianship and direction.
2.3 General Duties of the Project Sponsor in Phases, Stages and at Gates
As the accountable entity the Project Sponsor should address and resolve any
arising major issues that hinders the project meeting its objectives during the
different phases. However, there are some basic phase, stage and gate-related
responsibilities of the Project Sponsor:
2.3.1 Maintaining Stakeholder Alignment
Stakeholders are individuals, groups, or organizations either internal or
external that could influence the project, or be impacted by a decision,
activity, or outcome of the project. There are other stakeholders that are
not directly represented in the IPT, including:
 Immediate beneficiary or customers; project initiated to address their
needs
 Executive and Corporate Management, who are senior to the Project
Sponsor
 Technical functions such as those under Engineering Services, Loss
Prevention, etc.
 Government agencies
 Land owners
 Permitting agencies
 Joint venture partners
The Project Sponsor oversees the stakeholder Management Plan. The
Stakeholder Management Plan identifies and details the people, groups, or
organizations that have influence on the project, or could be impacted by
the project. Moreover, the Plan defines the project objectives through
stakeholders’ identification, categorization and prioritization of their
needs and expectations and develops appropriate management strategies
for effectively engaging stakeholders in project decisions and execution.
The Stakeholder Management Plan also focuses on continuous
communication with stakeholders to address issues as they occur, manages
conflicting interests and fosters appropriate engagement in project
decisions and activities.
Page 8 of 56
The Project Sponsor is responsible for securing stakeholders agreements

at the appropriate time and is responsible for ensuring that the business
objectives are met.
2.3.2 Ensuring Quality of Decisions and Completeness of Deliverables
The Project Sponsor is accountable for the quality of project decisions. To
support this accountability, the Project Sponsor is also responsible for the
timely completeness and quality of the supporting deliverables required
by the CMS before the gate.
For deliverables directly under their control, where they are the specific
Decision Maker, Project Sponsors are directly involved. For work not
directly under the Project Sponsor’s control, like the conceptual design or
the cost estimate, the Project Sponsor still monitors progress and takes
action if progress falls behind.
Ultimately, if the required Deliverables are not complete, the Project
Sponsor makes a decision to proceed forward or delay the associated gate
presentation meeting.
The Value Assurance process for evaluating gate deliverables readiness is
discussed later in the guide within Section 3 “Role and Responsibilities in
Stages and Gates”.
The Project Sponsor does not personally review and assess the quality of
each gate deliverable as the Project Sponsor has neither the time nor the
background to do so. The Value Assurance Review (VAR) performed at
the conclusion of each FEL Phase is a “process step” that provides an
assessment of the completeness and quality of the gate deliverables.
The Project Sponsor and the IPT Leader are responsible for directing
activities to fix any deficiencies identified by Value Assurance.
2.4 Project Sponsor Interaction with Functional Organizations
While the Project Sponsor is responsible for the successful outcome of each
individual project, he needs to maintain a close interaction with the Functional
Organizations, which represent the core of the capital project planning and
execution process.
The involvement of the Functional Organizations in the CMS can be summarized
in the following responsibilities:
 Management of project portfolio, applying directives from portfolio level to
projects
 Direct involvement in individual project activities and deliverables
 Development and management of guidelines, procedures and standards
 Management of the resources in the professional disciplines
Page 9 of 56
 Nominate subject matter experts to be a member of the IPT

 Provide required support and guidance to their nominated IPT member (s) on
function-specific endorsement and controls on deliverables as needed
 Funding of capital expenditure
The below paragraphs summarize the main interactions between the Project
Sponsor and Functional Organizations for each of the responsibilities outlined
above.
Department Management of the project portfolio
The Project Sponsor:
 Ensure that agreements are secured as defined in the RAPID® Matrix1 - by the
Functional Departments on key decisions where the departments needs to
consider portfolio-level trade-offs.
 Supports the Functional Organizations to perform the required project
monitoring activities for the purpose of overseeing Saudi Aramco
performance on the project portfolio, through:
o Project Reporting and Controls (policies, procedures, etc.)
o Lessons Learned
Direct involvement in individual project activities and deliverables
In the early phases of the project, until FEL2/DBSP, the Project Sponsor:
 Maintains the primary project leadership, being in charge of the decisions
related to project’s business objectives, scope, schedule and cost
 Closely interacts with Facilities Planning Department (FPD), which appoints
the IPT Leader who is responsible for freezing the project’s scope while
maintaining alignment with the business objectives
 Ensure obtaining the agreement of FPD, Capital Program Efficiency
Department (CPED), Project Management Office Department (PMOD) and
other Functional Organizations as defined by the RAPID® Matrix
In the later phases of the project, from FEL3/Project Proposal onward, the Project
Sponsor:
 Provides oversight to the project, removes barriers to success and steers any
corrective actions required to address deviations from the scope and
associated established targets
 Interacts with the Construction Agencies that have appointed the IPT Leader
 Approves or reject changes
1 The RAPID Matrix (responsibility matrix) is explained in more details in section 0
Page 10 of 56
Throughout the project, the Project Sponsor Ensure obtaining the agreement of
one or more Functional Organizations / Departments on selected deliverables, as
defined by the RAPID® Matrix that:
 Define the project business objectives, scope, schedule and cost, i.e.:
o Project Charter
o Site Selection Assessment
o Business Case Assessment
o Schedule
o Cost Estimate
o Target Setting
o Design Basis Scoping Paper (DBSP)
 Require specific compliance with health, safety, security and environmental
standards. For example, the Environmental Protection Department and Loss
Prevention Department needs to “Agree” on the Site Selection Assessment.
In the event one or more Functional Organizations do not provide the required
‘Agreement’ on a specific deliverable where the Project Sponsor has the
“Decision,” this disagreement is reported to the Decision Maker. VAR reviews
the positions of the Project Sponsor and the Functional Organizations and may:
 Provide a recommendation on how to resolve any disagreement and proceed
to the Gate; or
 Recommend the Project Sponsor to hold further discussions and/or ask the
IPT to perform additional work, in order to resolve the disagreement
Based on VAR recommendations, before the project is presented to the Decision
Maker at the Gate, the Project Sponsor and/or the Functional Organization may
decide to modify their positions in a way that allows resolution of the
disagreement. Otherwise, the disagreement is recorded by the Gatekeeper, and the
Management Committee makes the decision(s) at the Gate to resolve the
disagreement.
Adherence to applicable guidelines, procedures, standards and know-how
On behalf of the Project Sponsor, the IPT Leader ensures that IPT members follow
the guidelines, procedures and standards defined by the Functional Organizations.
While the IPT Leader ensures that the IPT members follow guidelines,
procedures, and standards, the Project Sponsor has responsibility as the process
guardian to ensure the overall project follows the CMS process.
Human Resources Assignment
At the start of each FEL Phase, the IPT Leader leads the formation of the IPT, and
the Project Sponsor supports the IPT Leader as needed in requesting each
Functional Organization to provide the optimal resourcing for the project, and
Page 11 of 56
ensuring the right skills to meet project needs. Resources can be appointed either
on part-time or full-time basis to the IPTs, depending on the size of the project
and scope of work to be performed.
Funding of capital expenditures
The Project Sponsor interfaces with Functional Organizations every time
budgeting and funding for capital projects is required, since Functional
Organizations retain their authority and roles on project budgeting and funding.
The sources of project funding change across project phases, as follows:
 Business Case and Study: Net Direct Expenditures (NDEs) managed by FPD
 DBSP: Preliminary Engineering Funds (as required) managed by PMOD / PMT
as provided by GI 202.451
 Project Proposal: Preliminary Engineering Funds managed by Project
Management
Page 12 of 56
2.5 Level of Project Sponsor Involvement

The Project Sponsor involvement is a part-time role. The involvement of the
Project Sponsor depends on the project’s type, phase and complexity. The Project
Sponsor engagement during the project’s earlier phases is more than during the
execution and operation phases as key decisions and actions related to proper
planning to meet business objectives and scope definition are undertaken.
2.5.1 Involvement by Project Phase
Figure 3 shows the level of Project Sponsor involvement by Saudi Aramco
project Phase. The conceptual level of effort in each Phase is shown
relative to the Project Sponsor’s maximum involvement.
How Much Time Will the Project Sponsor

Spend on Various Projects?
FEL 0 FEL 1 FEL 2 FEL 3
Business Project Finalize

Initiation BP G1 Study GAS DBSP G2 PPA G3 Execution HO Operations
Case Proposal FEL
Time Spent with Project Issues
Most Critical Decisions
Mega
Medium to Large
Small to Medium
Project Years
Figure 3 - Project Sponsor involvement during different FEL Phases

The Project Sponsor’s involvement starts in the FEL 1 Business Case
Phase. At this point, enough work has been done to frame the business
requirement and to test the viability of the project against a conceptual
scope of work.
The next step is to refine the business objectives and to identify the
feasible alternatives to be evaluated in the Study Phase. To avoid rework,
it is crucial the Project Sponsor provides input and direction to the IPT
Leader and the IPT regarding the business objectives and range of
alternatives well before the completion of the Study Phase.
The Project Sponsor’s involvement peaks around FEL 2 Study and FEL 2
DBSP as business objectives and project scope are finalized. The Project
Page 13 of 56
Sponsor actively participates in these activities, which are driven by the

IPT Leader.
As the Project Proposal Phase progress, the Project Sponsor’s involvement
decreases as the IPT Leader will be more responsible in driving the
execution toward meeting the project’s objectives.
Unless there are deviations from the Project Execution Plan requiring the
Project Sponsor’s direct attention, the Project Sponsor’s involvement will
be minimized during the Execution Phase.
2.5.2 Involvement by Project Complexity – A, B, C and C1 Project Types
Saudi Aramco has four capital project categories, A, B, C and C1 for
project complexity, with C and C1 having the lowest level of size and
complexity, as shown in Figure 4. Type A projects are mega projects
(programs) that tend to be larger, and have more interfaces to manage.
Figure 4 - Definition of Project Characterization
Page 14 of 56
2.6 Project Sponsor Decision Matrix

Detailed description of the Project Sponsor’s main tasks during each project Phase
is explained in Appendix A. Tasks are listed in the RAPID® (Recommend, Agree,
Perform, Input, and Decide). The RAPID® highlights each project deliverable
where the Project Sponsor takes action and specifies the action required, e.g.
Agree, Decide, etc.:
 Recommend: There is only one Recommend. This is normally the

process owner and they have credibility with all Input and Decide
stakeholders. They synthesize the input (incorporating context) and ensure
appropriate individuals are consulted.
 Agree: Used only in selected decisions. They formally approve a

recommendation and have the right to challenge the Recommend. If the Agree
and Recommend cannot get aligned, the Decide breaks the deadlock.
 Perform: Executes the decision result. There may be multiple

Perform elements. In some cases, Perform may also be an Input. Perform is
not mapped in this application of the RAPID®, since the focus in the FEL is
through ERA.
 ` Input: Provides factual input to the recommendation. There are

usually multiple Input elements. Input is assigned only to individuals with
critical insight to the decision (to avoid Input proliferation).
 Decide: There is only one Decide. They make the decision and
commit the organization to action. More than 90% of the time, Decide will
support Recommend. If Decide belongs to a “group,” there will need to be
clarification of how it is exercised (majority vote).
In addition, to provide some contrast to the Project Sponsor role, the RAPID ®
matrix (See RAPID® on https://sharek.aramco.com.sa/Orgs/30026862) contains
the responsibilities for the Decision Maker, the IPT Leader, and project
stakeholders. When other functions like Materials and Contracting have primary
responsibility for a task, the function is listed in the “Other” category. Also, the
tables are not an exhaustive list of all tasks of the other functions. For example,
not all the technical and planning tasks of the IPT Leader are included in the table.
Page 15 of 56
3 CPED Role
The Capital Program Efficiency Department (CPED) provides guidance to the Project
Sponsor in three ways:
1. Provide guidance in an advisory role in regard to the Project Sponsor on the use
of the Capital Management System (CMS).
2. Provide guidance to the IPT and advise the team, as needed, so they can navigate
through the CMS to reach project success.
3. Perform Value Assurance Reviews (VARs) (or Peer Reviews/Assists) and
produce Reports before the gates to help the Project Sponsor and Decision Maker
in determining the completeness of project deliverables and project readiness to
proceed to the next gate.
Page 16 of 56
APPENDICES
Acronyms
Acronym Term
CMS Capital Management System
CPED Capital Program Efficiency Department
DCS Distributed Control System
DWR Deliverable Waiver Request
ER Expenditure Request
ERA Expenditure Request Approval
GAS Gate: Alternative Selection
ID&SSD Industry Development & Strategic Supply Department
IPT Integrated Project Team
KPI Key Performance Indicator
LUP Land Use Permit
MCC Mechanical Completion Certificate
NBD New Business Development
NDE Net Direct Expenditures
NPV Net Present Value
ORP Operational Readiness Plan
PEP Project Execution Plan
PPA Project Proposal Approval
RAPID® Responsibility Matrix (Recommend, Agree, Perform, Input,
Decide – see section 2.4 below)
SCADA Supervisory Control and Data Acquisition
VAR Value Assurance Review
VIP Value Improving Practice
Page 17 of 56
Glossary
Term Definition
Whereas Management Committee makes decisions on large, complex
Business Line Committee projects, these committees (for the Upstream and Downstream Business
Lines) make decisions on small, less complex projects.
The Capital Management System characterizes projects into four
Characterization categories, Type A, B, C and C1 for project cost and complexity, with C
and C1 having the lowest level of size and complexity.
While a decision Gate in the Capital Management System is formal (e.g.
Checkpoint ER Funding), a Checkpoint is a less formal milestone such as Project
Proposal Approval or Mechanical Completion.
The Decision Maker for the Gates is represented by the Management
Committee for Type A and B projects, by the Business Line Committees
Decision Maker
for Upstream and Downstream Type C and C1 projects, and by the
Executive Advisory Committee for all other Type C and C1 projects.
Any type of drawings, documents, specifications, etc. that are developed
or performed as an output toward planning and executing a project.
Deliverable
(Note: Beginning on page 18, deliverables that have Project Sponsor
involvement are defined.)
FEL is a process that divides the project lifecycle into Stages and Phases
with Gates, each with defined activities and specific objectives. For each
Stage, achievement of the objectives is evaluated at the Gate under a
well-documented and systemized methodology. When the objectives of
Front End Loading (FEL)
the Stage are achieved, the project moves to the next Stage. At the
Gates, the project’s Business Case is defined and formulated, risks are
mitigated, project planning and execution strategies are assessed and
management approval and direction is obtained.
Functional Departments Permanent Saudi Aramco organizations
A Gate represents the decision point at the end of each FEL Phase,
Gate where a key management decision must be made before an
opportunity/project can progress to the next Phase.
The Gatekeeper for the Capital Management System’s decision Gates is
the Decision Support Division of Corporate Planning. Project
Gatekeeper information required for a decision Gate that involves Management
Committee is transmitted to them and per the readiness level of the
project, it is placed on the MC agenda.
Required rate of return, target rate; in capital budgeting, this is the
Hurdle rate
minimum a company expects to earn by investing in a project.
An IPT is a temporary project team whose members are from various
functions and report to the IPT Leader on full or part time basis and
sharing the same objectives and steered by the PS. The IPT members
Integrated Project Team represent the various functions of the Company and work within the
(IPT) team coherently and responsively. Depending upon the phase of the
project, the leadership will transition from Facilities Planning
Department to the Construction Agency at the end of the FEL 2 DBSP
Gate.
Page 18 of 56
Term Definition
The Mechanical Completion Certificate is a document used to confirm
the completion of construction, that the facility has been completed in
Mechanical Completion
accordance with the approved Expenditure Request and project
Certificate (MCC)
drawings, and that it has been inspected and it is in agreement with the
design and engineering specifications.
PXP is a multi-organizational, forward-looking assessment of the
Company’s 3-year and 10-year Capital Program Expenditure. It is
Portfolio Execution designed to ensure adequacy and availability of resources (workforce,
Planning (PXP) materials and services) required to execute capital projects and will
provide useful information for creating opportunities to support the
Kingdom’s economy.
Project Refers to a single Project or Program of several related Projects.
The Project Sponsor (PS) is an Executive for Type A and B projects, a
General Manager can serve as the PS for Type B projects and a member
of Management for Type C projects. The PS is appointed by the
Proponent organization, which is accountable for meeting project
Project Sponsor (PS)
objectives. The PS steers the Integrated Project Team (IPT) toward
maximizing investment value. Being part of the Proponent organization,
the PS provides a single point of accountability throughout the lifecycle
of a project and drives trade-offs between cost, schedule and operability.
A Value Assurance Review (VAR) is performed by an independent
multidisciplinary and experienced team before each FEL Gate. The VA
review assesses project deliverables including readiness of the project
moving to the next FEL phase / stage. The VA informs the IPT, Project
Sponsor and decision making committees on key issues for discussion at
the Gate with recommendations to safeguard and/or maximize the
project value. The VA provides:
 Management & stakeholders’ confidence on the affordability,
Value Assurance Review
deliverability and predictability of the assured projects.
(VAR)
 Periodic and thorough assessments for each program/project at
key decision points validating robustness of all the work done
and identification of areas that require focused attention by the
IPT and by management
 Enablement of timely informed decision making to safeguard
and/or maximize the project value
Continuous lessons learned and that best practices transfer between
projects
Page 19 of 56
Term Definition
Project Targets are measures that focus on maximizing value and
driving investment objectives toward excellence in a way that improves
historical performance and is equivalent to or better than industry
benchmarks. They are established in early stages of the program/project
to guide following FEL activities, decisions, studies, and IPT
commitment toward efficiency. They are linked to the
program’s/project’s main business requirements and enable appraising
Target Setting (TS) the program’s/project’s competitiveness at the Gates. The TS work
process involves the IPT and is led by the PS to set targets for the
project, drive commitment and challenge the creativity of the functional
organizations to achieve the targets. Targets are monitored and any
variances are approved with the appropriate level of escalation. The
Facilities Planning Department (FPD) leads TS while the Project
Management Office Department (PMOD) manages the required data
repositories of benchmarking and market intelligence.
Page 20 of 56
Appendix A: Role and Responsibilities in Stages and Gates

The Project Sponsor has a role and responsibilities before stages, during stages, before gates and
at gates.
The Figure below provides examples that are related to the FEL 2 Design Basis Scoping Paper
(DBSP) stage phase that precedes Gate 2 (G2)
1. Target Setting: Targets are set. The Targets might be for cost, schedule or operability
or might encompass other aspects of the project.
2. Stage: During the Stage, the IPT manages the evolvement of the project deliverables
for meeting the objective and maturity levels expected at the Stage Gate.
3. Pre-Gate: As the Stage completes, a Value Assurance (VA) Review is performed to
determine the completeness and quality of the project deliverables.
4. Gate: At the Gate, the Project Sponsor presents the project to the Decision Maker
(Management Committee or others) and the decision is made to move the project to
the next Stage and continue with project development.
Figure 5 – Phase, Stage and Gate Process

The Remainder of this guide describes each stage and gate. It also describes each deliverable
and shows the specific type of decision that the Project Sponsor makes.
Page 21 of 56
FEL 1 Business Case (Gate 1)

The objective of the Business Case (FEL 1) is to ensure the project’s feasibility
assessments are complete, and a complete range of alternatives has been identified.
The Project Sponsor as the owner of the project’s business case confirms the project
business requirements and guides the IPT on completion of all the Business Case (FEL
1) deliverables.
The Proponent and FPD have developed the project’s business objectives to a preliminary
FEL0 level. The conceptual scope of work required to meet the business objectives will
also be defined with feasible alternatives identified in FEL0 stage.
The RAPID® in Table 1 lists the Project Sponsor’s tasks for the FEL 1 Business Case
Phase.
Table 1 - Project Sponsor Tasks for FEL 1 Business Case Phase
IPT IPT Sr. Summary of
Project
Activity/Task Leader Leader Operatio Participation of
Sponsor Functions
(FPD) (PMT) ns Rep.
Proposed Integrated Staffing D
D R I All
Assignment
Project Charter (Initial) D R I FPD
PMOD, FPD. CSD, EPD,
Site Selection Assessment D R LPD, IS
Target Setting D R I PMOD, FPD
FPD, FAD., EPD, CP,
Business Case Assessment (Initial) D R LPD
Contracting Strategy (Initial) D R I P&SPD, Contracting
Construction Agency, ID,
Project Execution Plan (Initial) D R I I EPD, P&SPD, LPD
VIP Outcome Implementation Reports D R PMOD, CSD, P&SPD
Schedule Level I D R PMOD, FPD
Stakeholder Management Plan D R I Construction Agency
Business Case Brief and Presentation D R I PMOD, FPD, CP
Note: The IPT Leader is from FPD for FEL 1 & FEL2. The FPD Representative
changes roles at the end of FEL 2 DBSP and becomes the “Design Manager”
through FEL 3.
For each of the above activities and tasks where the Project Sponsor has to Decide,
Recommend, Input, etc., the below paragraphs explain each of them in terms of the
responsibility of the Project Sponsor.
Proposed Integrated Staffing Assignment
Per the RAPID®, the Project Sponsor Decides on this deliverable.
Page 22 of 56
The Project Sponsor decides the Proposed Integrated Staffing Assignment for the FEL 1
Business Case Phase and for Study Phase. The Project Sponsor reviews and approves:
 Job Descriptions
 Involvement (full-/part-time)
 Proposed Membership
The required staffing for the project can be initially estimated; however, appropriate
adjustments to the staffing are implemented as required during the planning (FEL) and
Execution (EPC) phases.
For this Phase (FEL 1 Business Case), the Project Sponsor is taking a high-level view of
the project staffing, but mostly verifying that the proposed staffing is adequate to perform
the required deliverables in this Phase.
The actual formation of the IPT is done early in FEL 2 (Study Phase).
In addition to the Project Sponsor and IPT Leader, the IPT includes additional process
design support, specific engineering disciplines as needed, and an operations
representative.
The timing for ramping up additional IPT members depends on the size of the project and
the input required for alternative selection. As alternative selection proceeds, other
supporting functions like maintenance, health, safety and environment, materials and
contracting, estimating, planning, and construction are added at the appropriate time. In
certain cases, some of these resources are not added in the FEL 2 Study Phase, but in the
FEL 2 DBSP Phase.
The IPT Leader has an important role in staffing the IPT because most of the resources
are supplied by the Saudi Aramco Engineering Services and Project Management
organizations. As new members are added to the IPT, the IPT Leader ensures they
understand and are aligned on the project’s objectives and the Project Charter. The Project
Sponsor verifies if the proposed staffing is timely and adequate to perform the required
deliverables in the next Phase.
Project Charter (Initial)
The Project Sponsor reviews the project’s charter developed by the IPT Leader. The
Project Charter work started during the early part of FEL1.
The Project Sponsor reviews the completed work and brings it to the level of detail
required for the end of the Business Case Phase.
The charter is a project document that evolves with the addition of more detail during
project definition. It is a detailed, holistic project description that serves as a reference
and communication tool for project decision-makers, IPT members and all stakeholders.
The Project Charter describes business and project objectives, provides context for the
reasons for doing the project, identifies project scope and strategy and lists the priorities,
assumptions, and risks that support the objectives and expected outcomes.
Page 23 of 56
Critically important, the Project Charter is the criterion to judge whether the proposed
scope and strategy are consistent with business requirements. It is also the reference for
holding all stakeholders to their agreements and commitments.
The project charter sections are shown in Figure 6 below. As noted, the Project Charter
has a business and project focus. The business focus describes why the project is needed
and how the business objectives satisfy that need. The project focus describes the project
scope and strategy needed to meet the business objectives.
The Project Sponsor is accountable for the quality of the Project Charter. A good Project
Charter is sufficiently detailed, its content is clear, and the business and project focus
areas are consistent. Although the Project Charter is developed jointly with the IPT
Leader, the Project Sponsor “owns” the content.
Project Charter (Content)
Business Focus Project Focus

• Context • Project Objectives
• Business Objectives • Project Scope
• Project Justification – In scope

– Out of scope
– Business drivers
(internal and external)
• Project Cost Estimate
– Alignment with business and Schedule
strategies
• Project Assumptions
• Business Risks
• Project Risks
• Constraints
• Business Benefits
(quantitative)
Figure 6 - Project Charter (Content)

Depending on the project type and complexity, the IPT Leader assigns IPT members the
responsibility for developing much of the material.
During working meetings, the Project Sponsor challenges the IPTs work on the Project
Charter’s content, in part, to anticipate questions the Decision Maker is likely to ask. This
activity not only improves the quality of the Project Charter, but also enables the Decision
Maker reviews to be more efficient and to focus on key decisions.
Site Selection Assessment
Page 24 of 56
The Project Sponsor watches over the Site Selection Assessment, and keeping in mind
that the approved Land Use Permit (LUP) should be included in the final DBSP (FEL 2).
The Project Sponsor has the IPT perform the appropriate analysis by completing a matrix
that compares the proposed site with several alternative sites/locations along 14 criteria.
Scores are developed (out of 100) to rate each site on each criteria, and then these sites
are ranked. The criteria for comparing the alternatives are:
 Geographic Criteria
o Land Availability
o Shape, Size, and Expandability
o Site Condition
o Soil/Geology
o Environmental Factors
 Management Criteria
o Manpower
o Risk
o Existing Support Facilities
o Construction Constraints
o Future Field Development
o Capital Cost
 Transportation Criteria
o Local Communities/Facilities
o Distance
o Nearest Facilities
In FEL 1, the Business Case Stage, the Project Sponsor verifies the proper analysis has
taken place in selecting the optimum location for the proposed site and ensures all issues
have been examined for the site selection.
The main task for the Project Sponsor is to confirm if the scope of the project can be
further developed based on the current site information.
Target Setting
The Project Sponsor establishes the Initial project targets. The Target Setting document
is developed across two phases: FEL 1 and FEL 2 and ensures the targets (which are
related to cost, schedule, operability, quality, etc.) are consistent with the project
objectives and scope. The Project Sponsor verifies the project is progressing with the
targets and also verifies that defined targets are consistent with the project’s scope.
Page 25 of 56
Business Case Assessment (Initial)

The Project Sponsor oversees the Initial Business Case Assessment. If the initial
assessment indicates that further analysis is warranted, the analysis is extended to include
a preliminary assessment of the project scope that is required to economically achieve the
stated business objective and a preliminary economic evaluation of the proposed project.
The main components of the deliverable include:
 Strategic Fit
 Business Evaluation
 Operating Environment
 Options Appraisal
 Preliminary Economic Evaluation
The Project Sponsor verifies the business opportunity has been supported by technical
and commercial feasibility assessments. The Project Sponsor also ensures that the
opportunity can be validated as the optimal solution in terms of alignment with company
strategic objectives, net benefits, total installed cost, lifecycle cost, return on capital
investments, etc.
Contracting Strategy (Initial)
The Project Sponsor oversees the Contracting Strategy (Initial) to ensure it identifies
major issues and opportunities for the project regarding the contractors market and/or
local content. The Project Sponsor should also ensures this strategy is consistent with
project objectives and priorities.
Project Execution Plan (Initial)
The Project Sponsor agrees on the Project Execution Plan (PEP) (Initial) for alignment
with outputs of the FEL 1 Business Case Phase. The Project Sponsor should also judge
how well the PEP has been prepared and offer improvements that bolster this important
document so that it helps guide subsequent Phases.
VIP Outcome Implementation Reports
The Project Sponsor oversees the VIP Outcome Implementation Reports to ensure VIPs
recommendations are implemented properly.
Project Schedule Level I
Page 26 of 56
The Project Sponsor starts the Project Schedule (Level I). The Project Sponsor ensures
that the schedule is articulated into several deliverables related to the Business Case FEL
1. The main task in FEL 1 is to verify that the milestones are properly identified and are
consistent with the project size/complexity.
Stakeholder Management Plan
The Project Sponsor oversees the Stakeholder Management Plan. The Project Sponsor
ensures that it identifies and details the interfaces with internal and external stakeholders.
The main task in FEL 1 is to ensure stakeholder have been identified and there is a plan
to manage them.
Business Case Brief and Presentation
The Project Sponsor heads the Development of the Business Case Brief and Presentation.
The Project Sponsor helps ensure that the brief summarizes the project’s progress and
status, including those topics, which are relevant for the gate.
The presentation is a PowerPoint document that expands the summary of the Brief into
contents, which are gate-specific and:
 Ensures the Gatekeeper has sufficient information to allow proper evaluation
of the project’s maturity level (in order to proceed with the Gate process)
 Ensures the Decision Maker has sufficient information to allow proper
preparation of the gate review process
The Project Sponsor, supported by the IPT Leader and other IPT members, presents the project’s
Business Case to the Decision Maker for approval to proceed to the next (FEL 2/Study) Phase.
The approval meetings have an established agenda and protocol, including pre-read material for
the Decision Maker’s. The meetings are interactive reviews, allowing the Decision Maker’s to
ask questions for clarification and challenge the decisions made by the Project Sponsor and their
team. The Project Sponsor must be thoroughly informed and ready to answer detailed questions.
At the conclusion of the approval process, the Decision Maker decides whether to approve or
cancel the project, place the project on hold, revise the objectives, modify the Project Charter
constraints or assumptions, or study more scope or strategy alternatives. The Project Sponsor and
their team proceed as directed.
New type A&B Projects proposed by operating organizations are thoroughly studied by FPD and
the business case is validated before its inclusion into the three years business plan. The business
plan development is concluded by MC endorsement and the Board approval. Thus covering gate-
1 requirement in engagement of decision maker, if no substantial change to the business case was
introduced post the project endorsement and approval. However, if the business case
encountered substantial change after its approval, then engaging MC at gate-1 may be necessary.
The following criteria should govern the decision for such engagement:
Page 27 of 56
 Significant change in (more or less than 50% in scope, capital expenditure, or schedule)
since last time the project was presented to MC as part of the Business Plan
 Significant change to the business case objectives.
In such case and after the completion of Value Assurance Review, the value assurance team
would make recommendation for engagement with MC as deemed required. If the
recommendation is endorsed by the Sponsor then the project will follow the existing MC
engagement procedure. In the event the MC engagement recommendation was not endorsed by
the Project Sponsor, then the Value Assurance findings and recommendations will be
distributed to MC members as “info” item.
FEL 2 Study Phase (Gate: Alternative Selection)

FEL 2 culminates with a completed Business Case based on finalized business objectives,
frozen project scope, and a comprehensive technical design. FEL 2 is divided into two
Phases, Study and DBSP Phase. The objective of the Study Phase is to complete
alternative selection before the technical design is complete and more detailed project
planning begins. Identifying the best scope of work or technical design is a complex task,
as there are typically many potential solutions for the business requirement.
Structured alternative selection is the best method for addressing this complexity. The
premise is that a logical, thorough, and objective process yields better solutions.
Importantly, alternative selection guards against the tendency to jump to a scope of work
or technical solution without thoroughly considering options. Saudi Aramco’s
engineering best practice SABP-A-042 identifies how alternative selection is conducted.
Although the IPT Leader and the IPT perform most of the alternative selection activities,
the Project Sponsor has a critical leadership role that includes making the final decision
on the alternative that best meets the project’s business objective. The RAPID® in Table
4 lists the Project Sponsor’s role and responsibilities for the FEL 2 Study Phase.
Table 2 - Project Sponsor Tasks for the FEL 2 Study Phase
IPT IPT Sr. Summary of Participation
Project of Functions
Activity/Task Leader Leader Operatio
Sponsor
(FPD) (PMT) ns Rep.
Project Charter (Update) D R FPD, Construction Agency
FPD, PMT, PMOD,
Business Case Assessment (Update) D R I I P&CSD, EPD, FAD, CP
D R FPD, PMT, PMOD,
Stakeholder Management Plan I Construction Agency
D R FPD, CSD, EPD, PMOD,
Site Selection (Final) LPD
Schedule Level I (Update) D R I FPD, PMT, PMOD
Page 28 of 56

Sponsor
(FPD) (PMT) ns Rep.
D R FPD, PMT, Contracting,
Contracting Strategy (Updated) I Construction Agency,
P&SPD
D R FPD, PMT, Construction
Project Execution Plan (Updated) I I Agency, PMOD, ID, EPD,
P&SPD
Study Brief and Presentation D R I FPD, Operations, CP
Proposed Integrated Staffing D R
A I All
Assignment
D R FPD, PMT, CSD, P&CSD,
VIP Outcome Implementation Report I I PMOD, ID, EPD, P&SPD,
Contracting, LPD
Note: The IPT Leader role changes from FPD to PMT after FEL 2.
Project Charter (Update)
The Project Sponsor reviews the updates of the Project Charter for alignment with
outcomes of this Phase.
Business Case Assessment (Update)
The Project Sponsor updates the Business Case Assessment for alignment with outcomes
of this Phase.
Site Selection (Final)
The Project Sponsor confirms the Land Use Permit is being pursued with no issues.
The Land Use Permit (LUP) is to be completed in two Phases. The LUP (Initial) is to be
started in the FEL 2 Study Phase, while the Land Use Permit (Approved) is in the in the
FEL 2 DBSP Phase when approval is expected to be complete.
The approved LUP should be obtained before issuing the draft DBSP for review. The
“approval possibility” of the LUP should be determined during the FEL 2 Study Phase to
confirm that there is no conflict or barriers regarding ownership and availability of the
selected site for the proposed facilities. The approved LUP should be included in the draft
DBSP for review, so that reviewers know that the land is available with no conflicts or
barriers. Then, the LUP should be included in the final DBSP that is issued for approval,
as it may have specific conditions that approvers need to understand.
Page 29 of 56
In summary, the Project Sponsor ensures that the Land Use Permit at the FEL 2 Study
gate is addressed to ensure the required steps are being taken for proper legal site selection
such as land ownership, government issues, location issues, etc.
Schedule Level I (Update)
The Project Sponsor concurs:
 The project’s progress as compared to the defined schedule and to analyze issues,
causes and recovery plans.
 The main milestones are properly identified and defined and are coherent with the
project size
Contracting Strategy (Updated)
The Project Sponsor oversees the Contracting Strategy (Initial) to ensure it identifies
major issues and opportunities for the project regarding the contractors market and/or
local content. The Project Sponsor should also ensures this strategy is consistent with
project objectives and priorities.
Project Execution Plan (Updated)
The Project Sponsor verifies PEP for alignment with outputs of the FEL 2 Study Phase.
The Project Sponsor should also judge how well the PEP has been followed and offer
improvements that bolster this important document so that it helps guide subsequent
Phases.
Study Brief and Presentation
The Project Sponsor oversees the preparation of the Study Brief and ensures that it is
clear and concise, that the Business Case remains, and that the selected alternative is
clearly articulated. The main components are:
Section Description
Introduction Brief project description, including the
following:
o Project objectives
o Summary of scope
o Expected benefits
Gate Meeting Topics Provides a list and brief summary of the
topics for the Gate meeting
Presentation Summary Summary description of the contents of the
presentation
Page 30 of 56
Section Description
Required Actions Description of the required actions from the
Decision Maker at the Gate
Definition of the urgency level for each
required action
Project Economics Key project economics (costs, NPV, etc.)
The Project Sponsor attends the Study Presentation for review/approval. This is a
PowerPoint presentation with appropriate pre-reads and the main components are:
Section Description
Overview Includes the project scope, objectives,
expected benefits, etc.
Key Results to Date Includes the progress over the Front end
Loading process and the key achieved results
Integrated Project Team Describes the IPT composition for the phase
Alternative Selection Describes the pros and cons of the identified
alternatives
Describes the selected alternative which has
been considered the optimal selection
Project Economics Provides key project economics information
(costs, NPV, etc.…)
Risk Analysis Includes major and updated risks identified
and the related impacts with mitigation
initiatives
Contracting Strategy Overview Includes a preliminary consideration for the
project contracting strategy (more focused on
market analysis and preliminary local content
maximization strategy)
Schedule Provides the Schedule Level I (Updated)
Execution Plan and Operational Readiness Highlights the main points of the Execution
Plan Plan and Operational Readiness Plan
Proposed Staffing Describes the proposed staffing for the next
Phase
The purpose of the Study Presentation at FEL 2 “Gate Alternative Selection” (GAS) is
for the Project Sponsor to:
 Ensure that all project alternatives were identified in terms of facilities,
physical interfaces among facilities, required technologies/capabilities, etc.
 Confirm whether the right alternative was chosen to proceed to the FEL 2
DBSP Phase considering compliance with the stated business objective,
capital investment, asset lifecycle costs, net benefits, etc.
 Verify if the selected alternative is the optimal solution.
Page 31 of 56

The Project Sponsor decides the Proposed Integrated Staffing Assignment for the
upcoming DBSP Phase.
VIP Outcome Implementation Report
General Guidance for Project Sponsor in this Phase
In this section, the guide provides the Project Sponsor with general guidance that
encompasses other, pertinent elements of this Phase of the project.
FEL 2 Study Phase Guidance (Alternative Selection)
Collaboration between the Project Sponsor and the IPT is critical to develop and select
the right alternative. No matter how clear the business objectives are at the start of the
FEL 2 Study Phase, constraints, risks, and various business and technical issues may
emerge as alternatives are investigated.
Many of the Study Phase engineering activities can be characterized as “discovery work.”
There are studies to evaluate the capabilities of various technologies and equipment. The
condition of existing facilities, including the capacity of utility systems, is evaluated.
Geotechnical studies are conducted to assess soil conditions. Updated fluid data including
volumes, production rates, and composition are received as appraisal drilling is advanced.
All this work is done to advance the engineering design and to support the alternative
selection process.
Discovery work produces information that may invalidate the assumptions (constraints
and limits) in the Business Case. For example, an evaluation of a facility’s existing
electrical system may show the system is at capacity. The finding invalidates the
assumption that the plant could be debottlenecked without any significant electrical
upgrade, and threatens the viability of the project because the extra cost might reduce the
expected return on investment below the hurdle rate. The IPT needs timely direction from
the Project Sponsor on what to do next. In some cases, the Project Sponsor seeks input
from the Decision Maker2 if the information affects the project’s business objectives.
Discoveries like these occur regularly. If the questions go unaddressed, progress during
the FEL 2 Study Phase may stall or the IPT may make choices that are misaligned with
the business requirement. It is the Project Sponsor’s responsibility to either answer these
questions directly or to delegate the responsibility to someone else.
FEL 2 Study Phase Guidance (Alternative Selection Decision)
The Project Sponsor needs to consider the full obligation of their responsibility. For
example, the Project Sponsor makes many decisions and when necessary, goes to the
2 Note: Engagements with the Decision Maker should be in line with the protocol defined in the VA process.
Page 32 of 56
Decision Maker for the final decision. The decision on which alternative should be
selected for a project falls into this responsibility. The Project Sponsor makes the
alternative selection decision at the conclusion of the FEL 2 Study Phase. The Project
Sponsor, of course, does not make the decision in isolation. The IPT Leader prepares a
recommendation that explains the strengths and weaknesses, supported by a detailed
financial analysis, of each alternative being considered. Other stakeholders are consulted.
The Project Sponsor may also seek input from the Decision Maker or other senior
management in the decision-making process. However, in the end, the alternative
selection decision is the responsibility of the Project Sponsor. The Project Sponsor makes
the decision based on the facts presented for each alternative and their in-depth
knowledge of the underlying business or operating unit. It is their judgment that
determines which alternative is the best method for satisfying the business requirement.
Then, their decision goes to the Decision Maker for the final decision.
A key word is “judgment” because the alternative selection decision is not made solely on
a quantitative basis. On a quantitative basis only, the best alternative has the highest Net
Present Value (NPV) on a discounted cash-flow basis. (For non-revenue generating
projects, the best alternative has the least negative NPV.)
The NPV is the product of the alternative’s net benefits, capital costs, schedule, and other
lifecycle costs. Choosing between alternatives cannot be solely based on NPV. The
decision also involves factors that cannot be easily quantified. For example, using the same
licensor as other plants within Saudi Aramco makes it easier to train operating personnel
and to transfer personnel from one plant to another. On the other hand, the functionality of
another licensor’s technology may be superior to the existing supplier. The benefit of
maintaining consistency with existing operations is hard to quantify.
The decision is further complicated because each alternative may have different levels of
uncertainty. Using the licensor selection example again, one licensor has a proven
technology for processes of the planned feedstock composition; another licensor’s
technology has to be modified for the planned feedstock composition, but if successful,
may offer superior yields. The expected NPV of the new technology alternative is higher
but has a greater chance of lower than expected NPV. The answer on which one is
superior depends on a number of factors including the Business Line’s risk tolerance.
Page 33 of 56
FEL 2 DBSP Phase (Gate 2: Freeze Project Scope)

The objective of the DBSP Phase is to complete the design basis while ensuring that the
project’s Business Case remains intact. Although the project must still go through the
Decision Maker for ERA at the end of the FEL 3 Project Proposal Phase, the end of FEL
2 DBSP gate is, in effect, the phase where it is truly believed that the project will certainly
achieve full funding and execution.
Unless there is a significant change in the market, the company’s strategic direction, or
the project’s cost and schedule estimates, projects should not be cancelled at the end of
FEL 3. Too much money is spent to complete the FEL 3 Project Proposal to cancel
projects, even on an infrequent basis. Sufficient project definition is finished by the end
of the FEL 2 Study Phase to serve as a reliable basis for the Decision Maker’s FEL 2
DBSP approval decision.
Although the Project Sponsor’s level of activity peaks during the FEL 2 DBSP Phase, the
Project Sponsor still actively provides input to the IPT, resolving disagreements,
removing barriers and finalizing/strengthening stakeholder alignment. The RAPID® in
Table 5 lists the Project Sponsor’s role and responsibilities for the FEL 2 DBSP Phase.
Table 3 - Project Sponsor Tasks for the FEL 2 DBSP Phase
Sponsor
(FPD) (PMT) ns Rep.
FPD, PMT, Construction
Project Charter (Updated) D R I Agency
FPD, PMT, CSD, P&CSD,
EPD, Contracting, ID,
Design Basis Scoping Paper (DBSP) D R I Construction Agency,
PMOD, LPD
Business Case Assessment FPD, P&CSD, FAD,
D R PMOD, EPD, CP, LPD
(Updated)
FPD, PMT, P&SPD,
Procurement strategy & material
D R I Contracting, Construction
procurement Agency
Target Setting D R A I FPD, PMT, PMOD
FPD, PMT, PMOD,
Stakeholder Management Plan D R I Construction Agency
FPD, PMT, Contracting,
Contracting Strategy (Updated)1 A I R Construction Agency,
P&CSD, P&SPD
Operational Readiness Plan (ORP)
D R I I FPD, PMT
Level I
Schedule Level II D R I FPD, PMT, PMOD
DBSP Brief and Presentation D R I FPD, PMT, CP
Proposed Integrated Staffing
D I R All
Assignment
Page 34 of 56

Sponsor
(FPD) (PMT) ns Rep.
FPD, PMT, CSD, P&CSD,
VIP Outcome Implementation
D R A I PMOD, ID, EPD, P&SPD,
Report Contracting, LPD
1
Construction Agency “Decides” on Contracting Strategy
Project Charter (Update)
The Project Sponsor updates the Project Charter for alignment with outputs of the FEL 2
DBSP Phase.
Design Basis Scoping Paper (DBSP)
The Project Sponsor ensures the highest level of quality since the Design Basis Scoping
Paper (DBSP) is one of the final design deliverables which impacts project scope, before
the project scope is frozen at the end of FEL 2 DBSP
(Gate 2). The main components of the document are:
 Site & Facilities
o Purpose of Facilities
o Present Situation
o Location Analysis
o Project Interfaces
 Studies
o Constructability and Logistical Assessment
o Environmental Impact
o Assessment of As-Built Drawings
o Value Engineering Study
o External Benchmark (Pacesetter)
 Design
o Design Objectives & General Basis
o Description of Proposed Facilities
o Scope Evaluations to Date
 Other
o Surplus and Excess Material
o Project Schedule
o Licensor Requirements
o Appendices
Page 35 of 56
The purpose of the Design Basis Scoping Paper (DBSP) at Gate 2 is to verify the
completion and freezing of the project scope needed to achieve the business objective in
an economic manner. Further, it is to ensure all facilities and equipment designs were
clearly and properly developed.
Business Case (Updated)
The Project Sponsor updates the Business Case Assessment to the final version for
alignment with outputs of the FEL 2 DBSP Phase.
Procurement strategy & material procurement
Project Sponsor concurs that the procurement strategy and material procurement plan
describes the potential strategies for the different procurement options available including
how the major equipment and materials for the project will be procured and identification
and evaluation of major surplus equipment and excess materials that are currently
available within Saudi Aramco’s inventory for potential use on the proposed project.
Target Setting (Final)
The Project Sponsor concurs the project targets to align with the outputs of the FEL 2
DBSP Phase.
Contracting Strategy (Updated)
Per the RAPID®, the Project Sponsor Agrees on this deliverable.
Project Sponsor to agree the contracting strategy for the ensuing phases is consistent with
project objectives and priorities and to ensure all risks have been identified and mitigation
plans put in place
Operational Readiness Plan (ORP) (Update)
The Project Sponsor ensures that the Operational Readiness Plan (ORP) is following the
strategy defined for the ORP in FEL 1 Business Case Phase and ensures alignment with
outputs of the FEL 2 DBSP Phase.
In the FEL 2 DBSP Phase, the ORP detail development will begin in continuous updates.
It will be used as a key guiding tool for the project to bridge across the stages of Front
Page 36 of 56
End Loading, Design/Construction and then Operations by ensuring seamless and

successful bridging. The main components of the ORP include:
 Operational Planning: Describe and integrate all the elements that will lead
to operations in terms of personnel, operations and maintenance procedures,
introduction of feedstock, quality assurance and control, etc. For example,
take a view of all elements of operations, and tie them back to all earlier stages
of the project and ask “What is needed and when in order to have a flawless
startup and fast ramp-up to full capacity operations?”
o Ensure that all elements of operational planning describe how operational-
related activities and deliverables are “monitored” from an operational
point of view; For example:
 What operations-related activities/deliverables will have an effect on
overall operations, (e.g. the Value Improving Practices or “VIPs”
Design to Capacity, Classes of Facility Quality, Process Reliability
Modeling, Waste Minimization, Technology Selection, etc.)? Since
excellent operations depend on the outcomes of these and other
activities/deliverables, the ORP must address what is expected from
them and others.
 What maintenance-related activities/deliverables will affect operations
(e.g. the VIP Design for Maintainability and Predictive Maintenance
workshops that are held in key Phases of the project)? Since excellent
operations depend on excellent maintenance practices, all elements of
maintenance must be designed into the facility.
o Ensure that all elements of operational planning are clear in project
estimates and budgets as well as project schedules
o Describe and plan for how major equipment planning, design/procurement
affect various operational aspects of the facility.
o Reference major, critical events and define how they contribute to
operational excellence, e.g., HAZOPs, Plot Plan arrangement decisions,
etc.
o Outline the systems, e.g., all process systems, information technology
systems (including communications, SCADA or DCS, etc.)
 Risk: Identification of risk that can affect any stage of the project, thus
affecting startup and operations as well as outlining mitigation actions
 Organization: Define the operating organization in terms of:
o What operations work force is required (to guide elements of the project
in the FEL or EPC stages, as well as operations)?
o When operations personnel will be mobilized to support what elements of
the project?
o How and when will operations personnel be trained for which duties?
Page 37 of 56
 Maintenance: Determine expected levels of maintainability and drive the

maintainability requirements into the designs with total installed cost and
lifecycle costs as key considerations tied to overall operability
 Pre-Commissioning, Commissioning and Startup:
o Describe how the operations organization will be involved in the Pre-
Commissioning activities and how Pre-Commissioning will transition into
Commissioning
o Define the Commissioning Plan and relate all the major commissioning
activities toward Startup
o Explain the strategy for Startup
 Tie this to the VIP Planning for Startup, e.g., when the workshops will
be done and what is expected from them as well as how the action
items stemming from the workshops will be managed to ensure a
flawless startup
 Support for Operations: Describe all facility support functions and their
integration with operations (HSE, plant engineering, utilities, energy
management, etc.)
The overriding element of the ORP is for the Project Sponsor to verify that a plan has
been defined to address and anticipate all operational readiness issues and associated risks
and how they are all addressed very early in the project and updated/managed along the
way.
In Summary, the Project Sponsor monitors the operations organization’s progress during
each Phase to ensure that everything relating to the “core” of operations is developed,
updated and completed as required.
Schedule Level II
The Project Sponsor concurs:
 The project’s progress as compared to the defined schedule and to analyze issues,
causes and recovery plans.
 A high-level networked CPM has been identified that defines the critical path
 The schedule includes all deliverables to achieve the scope of work and that it is
based on an appropriately-detailed networked CPM.
DBSP Brief and Presentation
The Project Sponsor concurs the DBSP Brief to align with the outputs of the FEL 2 DBSP
Phase. The main components are:
Page 38 of 56
Section Description
Introduction Brief project description, including the
following:
o Project objectives
o Summary of scope
o Expected benefits
Gate Meeting Topics Provides a list and brief summary of the
topics for the Gate meeting
Presentation Summary Summary description of the contents of the
presentation
Required Actions Description of the required actions from the
Decision Maker at the Gate
Definition of the urgency level for each
required action
Project Economics Key project economics (costs, NPV, etc.)
The Project Sponsor attends the DBSP Presentation for review/approval. This is a
PowerPoint presentation with appropriate pre-reads and the main components are:
Section Description
Overview Includes Project’s Objectives, Project’s scope
summary, Expected Benefits
Key Results to Date Includes the progress over the Front end
Loading process and the key achieved results
Integrated Project Team Describes the IPT composition for the phase
Project Scope Describes the frozen project scope
Project Economics Provides key project economics information
(costs, NPV, etc.…)
Risk Analysis Includes major and updated risks identified
and the related impacts with mitigation
initiatives
Contracting Strategy Describes the contracting packages and
related strategy
Schedule Provides the Schedule Level II
Execution Plan and Operational Readiness Highlights the main points of the
Plan Execution Plan and Operational
Readiness Plan
Proposed Staffing Describes the proposed staffing for the
next Phase
Page 39 of 56

The Project Sponsor decides the Proposed Integrated Staffing Assignment for the
upcoming DBSP Phase.
VIP Outcome Implementation Report
Special Guidance for Project Sponsor in this Phase
Each of the above deliverables was described for the Project Sponsor to understand their
specific role and responsibilities for those deliverables. In this section below, the guide
provides the Project Sponsor with general guidance that encompasses other, pertinent
elements of this Phase of the project.
FEL 2 Guidance for Project Sponsor (Facilitate the IPT Leader Transition)
The assignment of the proposed IPT Leader from PMT may have started during the FEL
2 DBSP Phase. The assignment is complete at the beginning of the FEL 3 Project Proposal
Phase. In either case, the transition of the IPT Leader position from FPD to Project
Management should be carefully facilitated by the Project Sponsor. As the transition
between these two personnel begins, the IPT Leader from PMT focuses on the
development of project planning activities, including the selection criteria for the Project
Proposal Phase.
From Initiation through the end of the DBSP Phase of FEL 2, the IPT Leader position is
held by a FPD representative. At the start of the Project Proposal Phase of FEL 3, the
position of the IPT Leader is transitioned to a representative from Project Management.
At this time, the FPD IPT Leader shifts their role to that of “Design Manager.” The
responsibility of the IPT Leader (PMT) is to manage all the project’s planning,
development and execution while the FPD Design Manager leads the scope development
and supports the IPT Leader.
During the transition, the Project Sponsor is responsible for ensuring that the IPT Leader
and Design Manager are firmly aligned and participate appropriately in all important IPT
issues and decisions.
Guidance for Project Sponsor (Preventing Major Late Design Changes)
Major late design changes are always detrimental to the success of a project. Once FEL
is complete and the project is funded, major late design changes disrupt the Execution
Phase as well as commissioning, startup and operations. Therefore, the Project Sponsor
is responsible for freezing the scope and for having a methodology in place that prevents
any future scope creep. Business objectives, project scope, the process design, and the
major project milestones are frozen at the end of FEL 2 DBSP. As such, stakeholder
Page 40 of 56
agreements to prevent anyone from altering these elements must be in place at the
conclusion of the Phase.
The Project Sponsor also needs to ensure that the project is using a challenging “project
scope control and change management” work process that is best suited for their project.
This work process should be a tool that the IPT chooses/uses to be able to recognize
possible scope changes and promptly act on them to prevent harm to the performance of
the project.
In conclusion, one significant aspect that drives major late design changes is the turnover
of key personnel. Therefore, the Project Sponsor should work with all levels of
stakeholder management to ensure that changes in key personnel are only made in the
case of poor performance.
FEL 3 Project Proposal Phase

(Not a Gate, But Project Proposal is Approved)
Note: The FEL 3 Project Proposal Phase includes a “checkpoint” (Project Proposal
Approval or “PPA”) that separates the FEL 3 Project Proposal Phase from the FEL 3
Finalize FEL activities and gate where FEL is finalized and ERA is requested. The goal
is to ensure that basic engineering and project planning are complete before the formal
ER Funding process is initiated.
The objective of the FEL 3 Project Proposal Phase is to further advance the planning,
definition of engineering and execution strategy to meet the ERA requirements (±10%
estimate) and then ensure there are no changes that can cause disruption to the project
execution Phase.
The Project Sponsor role shifts from very active involvement to only oversight and
corrective action to address deviations from the estimates established at the end of FEL 2
DBSP. The RAPID® in the Table below lists the Project Sponsor’s responsibilities for
the FEL 3 Project Proposal Phase.
Table 4 - Role and Responsibilities for the FEL 3 Project Proposal Phase
Project Operation Participation of
Activity/Task Leader Leader
Sponsor Rep. Functions
(FPD) (PMT)
Schedule Level III D I R PMOD, FPD
Construction
Contracting Strategy (Final) A I R Agency, P&CSD,
P&SPD, Contracting
Construction
Project Execution Plan (Final) D I R I Agency, PMOD, ID,
EPD, P&SPD/
Page 41 of 56

Project Operation Participation of
Activity/Task Leader Leader
Sponsor Rep. Functions
(FPD) (PMT)
Construction
Procurement strategy & material
D R Agency, CSD,
procurement P&SPD, Contacting
Operational Readiness Plan (ORP)
D I I R Construction Agency
Level II
PMOD, FPD, CSD,
VIP Outcome Implementation Report D I R I P&CSD, ID, EPD,
CD,LPD
Per the RAPID®, the Project Sponsor Decides on Schedule Level III, Project Execution
Plan (Final), Procurement strategy & material procurement, Operational Readiness Plan
(ORP) Level II, and VIP Outcome Implementation deliverables as well as agrees on
Contracting Strategy (Final) to be in alignment with outcomes of the FEL 3 Finalize FEL
Phase.
FEL 3 Finalize FEL Phase (Gate 3: Project Funding)

The objective of the FEL 3 Finalize FEL Phase is to ensure the integrity of the engineering
design to-date as well as the execution strategy and basically prepare the project for ER
Funding.
In the FEL 3 Finalize FEL Phase, the Project Sponsor role continues the shift from very
active involvement to only oversight and corrective action to address deviations from the
estimate established at the end of FEL 2 DBSP.
The RAPID® in Table 7 below lists the Project Sponsor’s responsibilities for the FEL 3
Finalize FEL Phase.
Table 5 - Project Sponsor Tasks for the FEL 3 Finalize FEL Phase
Sr. Summary of
Project IPT IPT Participation of
Operati
Activity/Task Sponso Leader Leader Functions
ons
r (FPD) (PMT)
Rep.
Construction
Project Charter (Final) D I R Agency, FPD
Target Setting D A R I FPD, PMOD
FPD, PMOD, EPD,
Business Case Assessment (Final) D I R CP, FAD, LPD
Proposed Integrated Staffing
D R All
Assignment
Finalize FEL (ER) Brief and
D I R FPD, CP
Presentation
Page 42 of 56
Per the RAPID®, the Project Sponsor Decides on Project Charter (Final), Target Setting,
Business Case Assessment (Final), Proposed Integrated Staffing Assignment, and
Finalize FEL (ER) Brief and Presentation deliverables.
Special Guidance for Project Sponsor in this Phase

Each of the above deliverables was described for the Project Sponsor to understand
his/her specific role and responsibilities for those deliverables. In this section below, the
guide provides the Project Sponsor with general guidance that encompasses other,
pertinent elements of this Phase of the project.
Guidance for Project Sponsor (General View of the FEL 3 Finalize FEL Phase)
In summary, this Phase answers the questions below to ensure that when the project goes
for ER Funding at Gate 3, the project is ready for funding and success:
 Is advanced engineering design properly developed?
 Is the updated economic value of project adequate and viable?
 Does cost estimation ensure accuracy of ±10%?
 Are the required studies properly developed (HSE, HAZOP, Environmental
Impact Assessment and others)?
 Have major risks been identified with mitigation plans?
 Are the contracting plan, procurement method, strategy and schedule for
procuring the Execution (EPC) contracts technically and commercially
adequate?
 Are defined execution KPIs coherent with project objectives?
 Is the PEP adequate in terms of organization, resources plan, quality plan,
etc.?
 Is Execution Phase staffing available and adequate?
Guidance for Project Sponsor (Approve Changes to Business Objectives)
As discussed earlier, business objectives are the specific, measurable statements about
what the business wants to accomplish with the project and how the project will
accomplish it. By the conclusion of the FEL 2 DBSP Phase, the business goal was
quantified, as was the facility functionality necessary to meet the business goal. Facility
functionality is defined by the project’s design basis that includes key parameters such as
production capacity, product composition, feedstock flow rates and composition,
availability and reliability factors, etc.
At the end of FEL 2 DBSP, the Decision Maker ratifies (or not, if the project is on hold,
cancelled or recycled) that a project’s business objectives are aligned with the company’s
Investment/Master Plans, and that there is a sufficient business requirement to justify the
project. In other words, the Decision Maker approves the Business Case. Subsequently,
Page 43 of 56
as the project progressed through FEL 3 Project Proposal, modifications to the business
objectives that change the Business Case originally approved by Decision Maker must
now be reexamined by the Decision Maker. That means, the Decision Maker, in effect,
must “reauthorize” the project (whether or not there were modifications to the business
objectives). For example, fundamental changes to business objectives such as a 25
percent capacity increase during Project Proposal forces the project to go back to the FEL
2 DBSP Phase to allow for an update to the process design and to re-estimate the cost and
schedule before the Business Case can be reexamined.
During all of FEL 3, the Project Sponsor continues to be briefed by the IPT Leader.
Should any type of scope growth be considered, the Project Sponsor must carefully weigh
the decision to pursue a request for changes to the business objectives. Late changes to
business objectives increase technical, schedule, and cost risk, and reduce the project’s
cost competitiveness and affect the rate of return.
The problem stems from the interdependent nature of engineering and project planning
work. For example, an increase in production capacity by 15 % during the FEL 3 Project
Proposal Phase means that engineering work already started, such as hydraulic
calculations, will have to be reworked. The updated hydraulic calculation may show that
it is necessary to increase certain piping diameters. This, in turn, adds to the total weight
in the pipe racks, requiring the pipe rack foundations to be made larger.
There are a myriad of these cumulative effects when major late design changes are made
during process plant design. The complication means that it is difficult to understand the
full effect of the changes. As a result, the change usually costs more and takes longer
than expected. It can also create technical problems that are not discovered until startup,
thus negatively impacting startup cost and the startup schedule. In summary, because the
adverse effects are normally underestimated, the net benefit of the scope change is
frequently overstated.
Unless there was a significant external event like a change in economic conditions, Saudi
Aramco corporate strategy, or government regulations, modifications to business
objectives are symptomatic of incomplete FEL 1 Business Case, FEL 2 Study, or FEL 2
DBSP work. For example, the business focus section of the Project Charter may not have
been complete or agreed by all stakeholders; or the project focus section of the Project
Charter was incomplete because the scope of work was not diligently frozen, resulting
from lack of stakeholder alignment; or ongoing engineering studies that were supposed
to be finished earlier yielded information that invalidated assumptions used to progress
the process design.
Some amount of late design changes is inevitable on projects. Market and operating
environments are dynamic and unpredictable, and changes modify important elements in
the project’s Business Case. However, a Project Sponsor can minimize major late design
changes by following strong project practices; e.g. clear objectives, full project team
integration, and excellent FEL.
Page 44 of 56
Execution, Commissioning, and Ramp-Up (And Handover to Operations)

This is not a formal gate, but a “checkpoint.”
The objective of the remaining project Phases is to complete detailed design, construct,
start up and commission the facility, and hand it over to Operations.
The Project Sponsor’s involvement drops significantly and has limited involvement in
project execution unless there are threats to successful completion of the project. As
before, the Project Sponsor is responsible for getting approval from the Decision Maker
on changes to the business objectives. However, changes to business objectives during
execution should be very infrequent. One area of continued Project Sponsor focus is with
Operations. Operations must meet its commitments to support the project during
execution and must be ready for commissioning, ramp-up and handover. The Project
Sponsor is heavily involved on grassroots projects that require the implementation of a
new operating organization. The RAPID® Table below lists the tasks and responsibilities
for Execution, Commissioning, and Ramp-up.
Table 6 - Project Sponsor Tasks for Execution, Commissioning, and Ramp-up
Project Participation
Activity/Task Leader Leader Operations
Sponsor of Functions
(FPD) (PM) Rep.
Operational Readiness Plan (Final) D R A Operations
Exception Items (Completed) D R A PM
Contract Closeout D R A PM, CD
Operational Readiness Plan (Final)

The Project Sponsor checks the progress of the ORP per the Execution Phase update and
verifies alignment with outcomes of this Phase.
Exception Items (Completed)
The Project Sponsor ensures that all exception items are completed.
Contract Closeout
The Project Sponsor ensures that the contract is closed out.
Page 45 of 56
Guidance for Project Sponsor (Effect of Design and/or Scope Changes)

Discussion of business objective, scope, and design changes are combined into a single
section to explain the differences between the categories.
Design changes are modifications to the scope, technical design, or execution plans that
are necessary to meet the business objectives specified at ER Funding. For example, the
discovery during detailed engineering that much more gas compression capacity is
needed to meet production targets is a design change. Design changes also include the
use of overtime to maintain schedule if the project falls behind. Controlling, managing,
and approving design changes are the responsibility of IPT Leader; they are accountable
for the effect of design changes on project outcomes.
A scope change is an addition of functionality or change in schedule to the project that
was not part of the original scope of work. A scope change may or may not be a change
to the business objectives. The example used earlier in the guide was a production
capacity increase. Increasing a plant’s capacity fundamentally changes the Business
Case, meaning that the additional revenue from increased capacity is sufficient to justify
the extra cost. Another example is schedule acceleration. Spending funds to finish sooner
(or later) is a change to the project’s business objective. These decisions must be
addressed and managed by the Project Sponsor.
The Project Sponsor has the authority to approve scope changes that result from
operations and maintenance requests to improve some aspect of the existing facility but
are not needed to meet the business objectives. Importantly, however, the baseline used
to measure the IPT Leader’s performance is modified to account for the effect of the
change. The Project Sponsor is accountable for justifying the scope change and its effect
on project outcomes.
Guidance for Project Sponsor (Oversees EPC Contractor Performance)
Managing the EPC contractor is the IPT Leader’s responsibility. If necessary, the IPT
Leader must take corrective action early enough to minimize the impact of execution
problems on project outcomes. During Execution (EPC), the IPT Leader keeps the Project
Sponsor informed on project status and brings to the Project Sponsor’s attention any
problems with the participation of the Sr. Operations Representative.
Page 46 of 56
Appendix B - Project Sponsor Selection

In addition to meeting the qualification requirements, the criteria for selecting a Project Sponsor
includes these factors:
 Business Line requesting the project
 Project justification category
Business Line Requests the Project Sponsor
The general rule is that the Project Sponsor is named by the Business Line conducting the project.
For example, Upstream names the Project Sponsor for Upstream projects; Downstream names
the Project Sponsor for Downstream projects.
An exception to the rule is with large projects that span two or more Business Lines.
Although the work may be done under multiple BI, there should be a single Project Sponsor for
the overall project to drive consistent business objectives, project priorities, and facility quality.
A single Project Sponsor also ensures that the timing of the individual projects and the interfaces
between projects are properly managed. Therefore, the Business Line Heads jointly name the
Project Sponsor for projects with multiple Business Line Proponents.
Another exception is with programs consisting of projects with common scope or a common
technology platform that are implemented at multiple sites. The installation of cogeneration
facilities at multiple Saudi Aramco sites is an example. The Project Sponsor drives consistency
across the projects within the program, and to capture learning curve benefits. Projects later in
the program should be more cost and schedule efficient by reusing engineering design, faster
mobilization of contractors and vendors, and the adoption of lessons learned from the early
projects of the program. Basically, an IPT learns how to do projects better with each iteration.
The selection of the Project Sponsor for programs is made by the MC or the Business Line Heads.
Page 47 of 56
Appendix C - IPT Organization

Overview of IPT Organization
The organization chart shown in the Figure 7 is a general representation of a Saudi Aramco IPT.
The specific structure will vary by project. There are basically no changes in the reporting lines
of the functions (e.g., Engineering Services Departments, etc.). The IPT members are appointed
by the functions and the roles and responsibilities between the IPT and the functions are defined
for each key project deliverable.
Integrated Project Team (IPT) and Project Sponsor

0
Business Project Finalize

Initiation BP G1 Study GAS DBSP G2 PPA G3 Execution HO Operations
Case Proposal FEL
In each Phase, the Sr. Ops. Rep. FPD leads Type A,B,C projects in FEL 1 and FEL 2. Project
and Project Leader always report
Management leads type A,B,C projects in FEL 3 and Execution.
directly to the Project Sponsor
Proponents lead Type C1 projects for FEL 3 and Execution.
FEL 1 BUSINESS CASE FEL 2 STUDY EXECUTION (DETAILED

FEL 3 PROJECT PROPOSAL DESIGN & PROCUREMENT)
EXECUTION
FEL 2 DBSP
(CONSTRUCTION)
Function
of origin:
FPD
PM
Ops.
ES
Other
Figure 7 - Integrated Project Team Organizations

During the Business Case, Study and DBSP Phases, the IPT Leader is an FPD representative. At
the start of the Project Proposal Phase, the IPT Leader role transitions to Project Management
and the FPD representative becomes the “Design Manager” and guides the IPT Leader and the
IPT through the final scoping of the project while the IPT Leader concentrates on the overall
project planning toward execution. Regardless of the type of project: A, B, or C projects, the
Project Sponsor is the overall head.
For Saudi Aramco, this organization of teams is a shift away from functionally-based project
teams to a structure referred to as “empowered IPTs.” An empowered IPT contains all the
stakeholders to make key project decisions. An empowered IPT includes a clear decision-making
Page 48 of 56
hierarchy. The premise is that an empowered team can make better decisions faster than a loosely
organized team of separate functions.
Most importantly, an empowered IPT can form into an integrated team with team members
aligned and committed to a set of shared objectives. Team integration is the foundation of project
excellence.
Another advantage of this type of team is that the project is not delayed if team members raise
objections to the project’s objectives, scope, design, or strategies. Team members can escalate
disagreements to their functional managers, where the issue is discussed with the Project Sponsor
and IPT leadership, but the project continues to move forward as the matter is resolved.
The Project Sponsor’s authority is derived from two sources. First, the Project Sponsor must be
consulted on the assignment and removal of key team members. Second, although team members
continue to report administratively to their functional Managers, the Project Sponsor provides
input to the team members’ annual performance reviews.
IPT Leader
From Initiation through the DBSP Phase, the IPT Leader position is an FPD representative. At
the start of the Project Proposal Phase, the position of the IPT Leader is transitioned to a
representative from PMT. At this time, the FPD IPT Leader shifts their role to that of “Design
Manager.” The responsibility of the PMT IPT Leader is to manage the projects planning,
development and execution while the FPD Design Manager leads the scope development and
reports to the IPT Leader.
The distribution of these responsibilities is based on the skills needed to develop the required
deliverables at the end of FEL 2. To ease the transition, the PMT representative is assigned prior
to the end of the Study stage to become familiar with the project and begin detailed project
planning, since an engineering contractor (PMC or GES+) will be engaged to develop the FEL 2
deliverables.
The Design Manager from FPD may leave the project after scope freezing at the end of FEL 2
since their primary responsibility is complete. However, the Design Manager is available for the
remainder of the project to be consulted in regard to scope or other project issues. The Design
Manager participates in design reviews and other major reviews of the project, as necessary.
The IPT Leader from PMT continues leading the project through Project Proposal and Execution.
The Project Sponsor ensures that both the FPD and PMT representatives understand the business
objectives and project decisions that shaped the project’s scope of work and strategy as outlined
in the Project Charter. The Project Sponsor must also ensure that the design work is complete
and that there are no open issues left to address that can affect the freezing of the scope at the end
of FEL 2. Project Sponsor continuity is necessary for the transition to be effective and for the
continuing alignment of business objectives with project objectives.
Senior Operations Representative
The Senior Operations Representative reports directly to the Project Sponsor rather than the IPT
Leader. The Senior Operations Representative’s primary role is to provide input on the scope of
work and to review the technical design to ensure that the facility will operate safely and in
Page 49 of 56
accordance with Saudi Aramco standards and specifications. The Senior Operations
Representative also coordinates interfaces with any existing facility, including turnaround
planning, construction permitting, site access and other issues that might become barriers for
project success. At the same time, the Senior Operations Representative plans, develops and
executes the ORP and is a key constituent of all operational elements of the project, e.g.
commissioning planning, startup planning, etc.
Operations reports separately to the Project Sponsor because they are from the same organization,
and it is the Project Sponsor’s duty to balance Operations’ requests for project scope and design
against the project’s business requirement and decide on the scope and the design parameters that
meet, but do not exceed, the project’s business objectives. Accordingly, the Project Sponsor
arbitrates between the IPT Leader and Operations to find the best combination of facility quality
and project cost.
The overall virtual organization consisting of the Project Sponsor and Integrated Project Team
are accountable toward achieving the objectives of the project to meet business needs.
Page 50 of 56
Appendix D - Translating Business Requirements Into Objectives

A capital project is developed and executed to meet business requirement(s) generated by a long-
term business strategy to produce a new product or to improve operating efficiency. The business
requirement may be the result of an opportunity created by rising product demand. The
requirement may stem from a business need to meet changes in government regulations or to
improve operating safety. Some examples of business requirements are:
 Meet growth in the Kingdom’s demand for transportation fuels
 Reduce the amount of oil used to produce power
 Maintain facility operation at current levels of reliability
Business requirement(s) are the basis for a project’s business objectives. Business objectives are
the specific, measurable statements about what the business wants to accomplish with the project
and how it will accomplish it. These objectives are progressively refined during the project
definition Phase. The translation of the business requirements listed above may result in the
following Business Objectives (using a made-up example):
 Meet 15 percent of the growth in demand for low-sulfur diesel fuel by 2020, by building a
new co-located diesel hydrotreater capable of producing 50 MMBBL / day at the
Ras Tanura Refinery
 Reduce annual In-Kingdom internal oil consumption by 3 million barrels by installing a 300-
MW cogen plant at three Saudi Aramco processing facilities
 Maintain the facility’s 95 percent up-time factor by replacing obsolete electrical switchgear
Detailed, clear business objectives are the foundation for project excellence. They enable the
IPT to align and integrate common goals. They mark a clear path for what work needs to be done
to complete project definition. They serve as a reference for enforcing the discipline necessary
to minimize out-of-sequence changes to the project scope and strategy. An integrated team,
thorough project definition, and discipline are all necessary to plan, develop and execute projects
that are economically robust, competitive, and completed with predictable results.
While the new CMS contains the steps necessary to achieve excellence, it is not sufficient to
ensure success. It requires leadership to navigate through the process, to gain the cooperation of
stakeholders, and to ensure the work is completed in substance, not just form. That leadership,
especially in the early stages as business objectives are being finalized, is provided by the Project
Sponsor.
Page 51 of 56
Appendix E - Project Sponsor Checks and Balances

The Project Sponsor has considerable decision-making authority. The Project Sponsor judges
which technical and strategy alternatives are the best match with the business requirement. The
Project Sponsor also has the final say on what scope of work is necessary to meet the business
objectives. Therefore, the Project Sponsor’s decisions and actions (or those of any IPT member)
must be subject to a robust set of checks and balances. The checks and balances already discussed
include (1) The MC review at the gates that control project progress and funding, (2) The ability
of IPT members to escalate concerns to their functional management regarding the Project
Sponsor or IPT Leader behaviors or decisions. Their functional management (for example, a
Manager under Engineering Services) can resolve the issue at the proper management level.
The Saudi Aramco system includes two additional forms of checks and balances under the CMS:
Target Setting and Value Assurance. Both these work processes were developed to create a
“checks and balances” approach.
E.1 Role of the Functional Organizations
The Functional Organizations represent the core of the capital project planning and
execution process. The involvement of the Functional Organizations / Departments in
the CMS process includes:
 Management of project portfolio
 Direct involvement in individual project activities and deliverables
 Development and management of guidelines, procedures, standards and know-how
 Management of the resources in the professional families
 Line of authority on capital expenditures
Management of Project Portfolio
While the Project Sponsor is responsible for the successful outcome of each project, the
Functional Organizations are responsible for the successful planning and execution of the
portfolio of projects.
Particularly, the role of Functional Organizations in managing the project portfolio
consists of:
 Defining the project in terms of scope, estimated cost and schedule (Proponent,
Corporate Planning, FPD, PMOD, MS, NBD and others)
 Performing the activities required by the PXP (Engineering Services/FPD, Project
Management/PMOD, Corporate Planning, Procurement & Supply Chain Management
and others) to:
o Estimate the resources (workforce, materials and services) required to execute the
capital projects
o Ensure the adequacy and availability of the same resources
Page 52 of 56
o Support ID&SSD in creating opportunities to develop the Kingdom’s economy

 Considering portfolio-level trade-offs when providing Input, Agreements,
Recommendations and Decisions on each capital project, as defined by the RAPID ®
Matrix
 Monitoring the overall performance on the portfolio, through:
o Project Reporting and Controls
o Lessons Learned
Direct involvement in individual project activities and deliverables
Functional Organizations are significantly involved throughout the planning and
execution process of each individual project.
In the early phases of the project, until DBSP, FPD closely interacts with:
 The IPT Leader, also from FPD
 The Project Sponsor, who has the primary project leadership and is in charge of the
decisions related to project’s business objectives, scope, schedule and cost
In the later phases of the project, from Project Proposal onward, the Execution Agency
takes the primary project leadership, closely interacting with:
 The IPT Leader, also from PMT
 The Project Sponsor, who is now focused only on removing barriers to success,
providing oversight and steering any corrective actions required to address deviations
from the estimates established at the end of DBSP
Throughout the lifecycle of the project, Functional Organizations leverage the technical
expertise of their resources in order to:
 Provide ‘Input’ and guidance to the IPT in the development of several project
deliverables
 Countersign (‘Agree’) selected deliverables that define the project business objectives,
scope, schedule and cost, i.e.:
o Project Charter
o Site Selection Assessment
o Business Case Assessment
o Schedule
o Cost Estimate
o Target Setting
o DBSP
Page 53 of 56
 Require specific compliance with health, safety, security and environmental standards.
For example, the Environmental Protection Department needs to ‘Agree’ on the Site
Selection Assessment.
 For Project Management only, ‘Decide’ on selected deliverables that concern project
execution, such as:
o PEP
o Contracting Strategy
o Material Procurement Strategy and Plan
The RAPID® Matrix defines the project deliverables and which the Functional
Organization (s) provide(s) the ‘Input’, ‘Agreement’ or ‘Decision’. The technical staff
remains within the Functional Organization and does not become part of the IPT. ‘Inputs’
can be provided by any technical staff involved in the project. Instead, ‘Agreements’ and
‘Decisions’ can only be provided by the “Head” – General Manager or Manager - of the
Functional Organization (s) involved according to the RAPID® Matrix, and require cold
eye reviews and/or peer reviews performed by the Functional Organization’s technical
staff.
In case one or more Functional Organizations do not provide the required ‘Agreement’
on a specific deliverable where the Project Sponsor has the ‘Decision’, this disagreement
is reported to the Decision Maker. Value Assurance reviews the positions of the Project
Sponsor and of the Functional Organization (s), and may:
 Provide a recommendation on how to resolve it and proceed to the Gate; or
 Recommend the Project Sponsor go back and hold further discussions and/or ask the
IPT to perform additional analysis, in order to resolve the disagreement
Based on VAR recommendations, the Project Sponsor and/or the Functional Organization
may decide, before the project is presented to the Decision Maker at the Gate, to modify
their positions in a way that allows resolution of the disagreement. Otherwise, the
disagreement is recorded by the Gatekeeper, and the Decision Maker at the Gate makes
the required decision(s) that allow resolution of the disagreement.
Functional Organizations are responsible for providing support to IPTs through services
and selected activities in cases where relevant IPT members have not been appointed.
Moreover, even when relevant IPT members are appointed, they may request specific
technical input from Functional Organizations to perform a detailed analysis and draft a
solid recommendation. While the Function is responsible of providing the relevant
support, this is not a shift of accountability, as the IPT remains fully responsible for the
project results.
Development and management of guidelines, procedures, standards and know-how
Functional Organizations are responsible to develop and maintain their guidelines,
procedures and standards. Each member of the IPT, under the supervision of the IPT
Page 54 of 56
Leader, should comply with such guidelines, procedures and standards. For example, in
a Construction Readiness Review:
 The Project Management Function is responsible to maintain a procedure for
performing the Construction Readiness Review before proceeding to construction
 The Senior Project Engineer is responsible to perform the Review and to develop
(‘Recommend’) the related deliverable prescribed by the Front End Loading process,
following the procedure defined by Project Management Function
 The IPT Leader validates (‘Decide’) the Construction Readiness Review deliverable
and is responsible to ensure that the Senior Project Engineer has applied the procedure.
Any meaningful deviation from the procedure is escalated to the Project Management
Functional Organization in charge of the project
Functional Organizations are responsible for continuously fostering the know-how
related to their own area of activity. Functional Organizations need to ensure their
practices are in line with international industry best practices, and that their knowledge
base is continuously strengthened by codifying lessons learned from projects. Functional
Organizations also need to ensure that their resources are well trained and equipped to
apply the developed know-how on the projects.
For example:
 Project Management develops and manages best practices on selecting, mobilizing and
monitoring contractors
 Engineering Services develops new technical solutions to lower life cycle costs while
increasing reliability, safety, security and quality
Management of professional capability development
Functional Organizations also manage the professional development, deployment and
performance measurement of their resources.
On professional development, Functional Organizations ensure the right training and
capability building programs to continuously keep their staff in line with best practices
and to provide them with all the tools required to apply and adhere to them when working
on projects.
On deployment, Functional Organizations recommend the optimal resourcing, both in
terms of quantity and quality, considering both project needs and individual career
development needs. Resources can be appointed either part-time or full-time to the IPTs,
depending on the size of the project and on the scope of work that they need to perform.
On performance measurement, Functional Organizations manage the annual evaluation
of their resources, maintaining appropriate systems to ensure that the resources’
performance as members of the IPT is reflected in the evaluation.
Line of authority on capital expenditures
Page 55 of 56
Functional Organizations retain their authority and roles on budgeting and funding of
capital projects.
The sources of project funding changes across project phases, as follows:
 Business Case and Study: NDEs managed by FPD
 DBSP: Preliminary Engineering Funds managed by Engineering Services
 Project Proposal: Preliminary Engineering Funds managed by Project Management
Page 56 of 56

P PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

P PDF

Uploaded by

Copyright:

Available Formats

Saudi Aramco Manual

Project Sponsor (PS) Guide

Previous Issue: 4 october 2015 Next Planned Update: TBD

Copyright©Saudi Aramco 2016. All rights reserved.

1 Introduction and Executive Summary

Project Type Project Sponsor

2 Project Sponsor Role Description

Figure 2 - Saudi Aramco Stage and Gate Work Process

The Project Sponsor is responsible for securing stakeholders agreements

 Nominate subject matter experts to be a member of the IPT

1 The RAPID Matrix (responsibility matrix) is explained in more details in section 0

2.5 Level of Project Sponsor Involvement

How Much Time Will the Project Sponsor

FEL 0 FEL 1 FEL 2 FEL 3

Business Project Finalize

Most Critical Decisions

Figure 3 - Project Sponsor involvement during different FEL Phases

Sponsor actively participates in these activities, which are driven by the

Figure 4 - Definition of Project Characterization

2.6 Project Sponsor Decision Matrix

 Recommend: There is only one Recommend. This is normally the

 Agree: Used only in selected decisions. They formally approve a

 Perform: Executes the decision result. There may be multiple

 ` Input: Provides factual input to the recommendation. There are

Appendix A: Role and Responsibilities in Stages and Gates

Figure 5 – Phase, Stage and Gate Process

FEL 1 Business Case (Gate 1)

Project Charter (Content)

Business Focus Project Focus

• Business Objectives • Project Scope

• Project Justification – In scope

Figure 6 - Project Charter (Content)

Business Case Assessment (Initial)

FEL 2 Study Phase (Gate: Alternative Selection)

IPT IPT Sr. Summary of Participation

Per the RAPID®, the Project Sponsor Decides on this deliverable.

FEL 2 DBSP Phase (Gate 2: Freeze Project Scope)

IPT IPT Sr. Summary of Participation

End Loading, Design/Construction and then Operations by ensuring seamless and

 Maintenance: Determine expected levels of maintainability and drive the

Proposed Integrated Staffing Assignment

FEL 3 Project Proposal Phase

IPT IPT Sr. Summary of

FEL 3 Finalize FEL Phase (Gate 3: Project Funding)

Special Guidance for Project Sponsor in this Phase

Execution, Commissioning, and Ramp-Up (And Handover to Operations)

Operational Readiness Plan (Final)

Guidance for Project Sponsor (Effect of Design and/or Scope Changes)

Appendix B - Project Sponsor Selection

Appendix C - IPT Organization

Integrated Project Team (IPT) and Project Sponsor

Business Project Finalize

FEL 1 BUSINESS CASE FEL 2 STUDY EXECUTION (DETAILED

Figure 7 - Integrated Project Team Organizations

Appendix D - Translating Business Requirements Into Objectives

Appendix E - Project Sponsor Checks and Balances

o Support ID&SSD in creating opportunities to develop the Kingdom’s economy

You might also like