Guia Gestion de Proyectos HATCH

Process Guide
FEL Overview
PLP-100-020-0006
Project Management Process Guide
FEL Overview
Process Guide
FEL Overview
PLP-100-020-0006
Approved
2013-03-26 0 N. Mason M. Miller S. Heiner J. Scobbie
for Use
DATE REV. STATUS PREPARED BY CHECKED BY APPROVED BY APPROVED BY

Discipline Functional
PLP Coordinator
Director Director
Project LifeCycle Process

Reference No. PLP-100-020-0006, Rev. 0 Ver: 02.07
© Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents.
FEL Overview
Table of Contents
1. Purpose ................................................................................................................................................. 1
1.1 Project LifeCycle Process ............................................................................................................. 1

1.1.1 Front End Loading - The Foundation of the PLP ............................................................. 2
1.1.2 Benefits ............................................................................................................................ 8
2. Scope ..................................................................................................................................................... 9
3. Definitions ............................................................................................................................................. 9
4. Project Process Description.............................................................................................................. 12
4.1 Study Purpose ............................................................................................................................ 12

4.1.1 Project Definition............................................................................................................ 12
4.1.2 Defining the Right Project .............................................................................................. 12
4.1.3 Defining the Right Project - FEL Phase Implications ..................................................... 15
4.1.4 Project Execution Planning ............................................................................................ 21
4.2 Phase Requirements .................................................................................................................. 23
4.2.1 Phase Deliverable Accuracy Requirements .................................................................. 23
4.2.2 Hatch Requirements - Determining the Work Required in the Phase ........................... 26
4.2.3 A Client View on Phase Deliverable Content ................................................................ 28
4.3 Gate Reviews .............................................................................................................................. 29
4.4 FEL Phase Management ............................................................................................................ 29
4.4.1 Prior Phase Work........................................................................................................... 29
4.4.2 Management .................................................................................................................. 31
4.4.3 Phase Work Planning .................................................................................................... 33
4.4.4 Final Phase Deliverables - Quality Assurance .............................................................. 34
5. Responsibilities and Cross-Functional Requirements ................................................................... 35
5.1 Roles and Responsibilities .......................................................................................................... 35

5.2 Client and Client-Appointed Third Parties .................................................................................. 35
5.3 Hatch-Appointed Third Parties .................................................................................................... 36
5.4 Cross-Functional Requirements within Hatch ............................................................................ 36
5.5 Study Workflows ......................................................................................................................... 36
6. Associated Documents ...................................................................................................................... 37
7. Reference Documents ........................................................................................................................ 37
List of Tables
Table 1-1: Project Team’s Goals and Gate Review Team’s Focus during FEL Phases .............................. 4
Table 4-1: FEL1 Concept Study .................................................................................................................. 15
Table 4-2: FEL2 Prefeasibility Study........................................................................................................... 17
Table 4-3: FEL3 Prefeasibility Study........................................................................................................... 18
Table 4-4: FEL4 Execution.......................................................................................................................... 20
Table 4-5: Stage PEP Completion through the PLP Phases ...................................................................... 23
Table 4-6: Study Reports – Sections .......................................................................................................... 26
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FEL Overview
Table 4-7: Phase-End Deliverable Structure and Subject Matter – Examples ........................................... 28
Table 6-1: Associated Documents .............................................................................................................. 37
Table 7-1: Reference Documents ............................................................................................................... 37
List of Figures
Figure 1-1: Increasing Investment and Definition with Decreasing Risk Over the PLP Phases ................... 2
Figure 1-2: PLP FEL Project Phases ............................................................................................................ 3
Figure 1-3: Typical FEL Activities ................................................................................................................. 6
Figure 4-1: FEL Phase Project Definition.................................................................................................... 12
Figure 4-2: Complete Project Scope Definition ........................................................................................... 13
Figure 4-3: WBS Definition.......................................................................................................................... 14
Figure 4-4: FEL1 Option Analysis ............................................................................................................... 16
Figure 4-7: FEL4 Execution ........................................................................................................................ 21
,,
Figure 4-8: Estimate Basis and Accuracy ................................................................................................ 24
Figure 4-9: Estimate Accuracy Definitions .................................................................................................. 25
Figure 4-10: Management Workflow ........................................................................................................... 31
Figure 4-11: Management Level of Effort per FEL Phase .......................................................................... 32
Figure 4-12: Typical iPas Tools Usage by FEL Phase ............................................................................... 33
Figure 4-13: Study Work Plan Processes ................................................................................................... 34
List of Appendices
Appendix A Study Table of Contents - Objectives and Requirements
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FEL Overview
1. Purpose
This Guide provides guidance to teams on the requirements of the Project LifeCycle Process
(PLP). The focus of this Guide is FEL1, FEL2 and FEL3 phase processes. A separate guide
outlines the requirements for FEL4.
This FEL Overview Process Guide should not be read in isolation. The Project Management
Discipline Guide (PLP-100-020-0002) should be read in conjunction with this Guide (refer to
Section 6). Successful delivery of any FEL1, FEL2 or FEL3 study requires the Study Manager
to effectively deliver sound project management practices.
1.1 Project LifeCycle Process

Hatch Ltd. (Hatch) requires continuous improvement in the preparation, management and
delivery of studies and projects for all its clients and, thereby, improves the reliability of the
results achieved. Consequently, the PLP has been established to provide a standardized,
generic methodology, based on best practices as applied to progressive project phases,
which are separated and controlled by a series of gate reviews. This methodology permits
Hatch to systematically strive towards consistency in helping our clients to achieve their
goals.
The purpose of the PLP is to provide a rigorous methodology to effectively manage projects
being implemented by Hatch, and to ensure that all projects, throughout their project lifecycle,
are completed with a consistent approach. This approach is based on definition of an agreed
scope, level of investigation, evaluation techniques and a set of deliverables; all executed by
Hatch within the framework of our clients’ minimum requirements for the definition and
execution of projects. This Guide provides direction to all those directly involved in the
development, evaluation and execution of capital-intensive engineering projects.
Supporting this Guide is a comprehensive set of procedures, templates and tools appropriate
to each project phase. This documentation is located in the Hatch Knowledge Centre (HKC).
A tab on the Inside Hatch homepage provides a link to the HKC. The Study Manager has the
responsibility to use PLP processes to develop detailed work packages, workflows and
methodologies required to complete the project phase being undertaken. For FEL1 to FEL3
project phases, a study work plan is required (see the study work plan template and the study
work plan guide referenced in Section 6).
A Project Execution Plan (PEP) is required to define the project to be executed by Hatch (see
the execution plan process guide referenced in Section 6). This plan begins development
during the FEL2 phase. The PEP is a deliverable of both FEL2 and FEL3 phase study
activities (PEP formation should be a defined study work package in both FEL2 and FEL3
study work plans). Beginning PEP formation in FEL2 defines the work to be completed in
FEL3 to ensure a solid project baseline is established within the PEP completed during FEL3.
The PEP is the fundamental baseline document to managing and controlling FEL4 work.
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FEL Overview
1.1.1 Front End Loading - The Foundation of the PLP

The early study, or Front End Loading (FEL), of project phases is key to the successful
implementation of the execution phase and project closeout. The “front end loading” term is
commonly used to illustrate the value and opportunity that is realized by doing upfront work in
the early study phases of a project’s lifecycle, when there is still the potential to influence the
successful outcome of the project.
FEL is the term used to describe the progressive and phased increase in investment in a
project, in line with progressively decreasing risk and increasing clarification and certainty
over time. Each incremental investment is made when the level of risk and certainty justifies
it, rather than committing large sums to an uncertain investment at the outset. This concept is
illustrated in Figure 1-1.
Figure 1-1: Increasing Investment and Definition with Decreasing Risk Over the PLP Phases
The objective of the PLP is to invest an appropriate amount of effort to identify, analyze and
evaluate the project to determine if there is a single project definition that will best meet the
client’s business requirements. The phased approach to project development (FEL1 through
FEL4) is a structured approach to addressing variables that influence project definition,
leading to the completion of FEL3 as a robust definition of the project to be built. For many
clients, FEL3 completion marks the point where execution funding is sought and approved.
Project definition made within the FEL3 phase also establishes realistic and credible baseline
data against which the FEL4 phase will be monitored and controlled.
PLP processes are applied across the four FEL phases to achieve the reduction of risk and
increasing certainty, in line with increasing investment as follows:
• FEL1: Conceptual Study, in which the broad business concept is tested, and a number of
options are generated to implement the requirements.
• FEL2: Prefeasibility Study, in which the options are evaluated, a preferred option
prioritized and selected, and the viability of the project is more rigorously tested.
Particular emphasis is needed on examining execution driver’s strategies.
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FEL Overview
• FEL3: Feasibility Study, in which the selected option is more fully defined and its viability
confirmed. The optimized project to deliver the solution is defined in terms of cost,
schedule, scope and other required definition elements required by the client. Particular
emphasis is placed on execution planning, and aligning the project schedule, estimates
and other baseline data to the execution plan.
• FEL4: Execution, in which the capital investment is made, final design is completed, and
the project is executed to deliver the defined outcomes, in line with the scope, schedule,
cost, quality and other defined parameters.
The rigorous sequential completion of each FEL phase is key to the success of the project
execution and finalization phases. Intensive focus on the FEL1 (conceptual), FEL2
(prefeasibility) and FEL3 (feasibility) phases improves the likelihood of success in the FEL4
(execution) phase. Many clients do not follow a clearly structured FEL sequence. Where
possible Hatch should highlight the value adopting the FEL processes and engaging the
client to either adopt a more structured approach, or to fully understand the risks and risk
mitigation elements that must be built into the project definition arising from a less structured
delivery approach.
1.1.1.1 FEL Phases Gate Review

The sequential development of projects is shown in Figure 1-2.
Front End Loading Phases

Business Planning
FEL1 FEL2 FEL3 Start-up

Gate Review 1
Gate Review 2
Gate Review 3
Gate Review4
FEL-4
&
Execution
Concept Pre-Feasibility
Feasibility Operations
Study –
Study – Define Study – Select
Develop
Project Most Viable
Project
Options Option
Definition
Potential for recycle

if requirements of Phase
are not met.
Figure 1-2: PLP FEL Project Phases
Table 1-1 sets out the typical goals that determine the project team’s activities and the focus
of the gate review team during the FEL phases.
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FEL Overview
Table 1-1: Project Team’s Goals and Gate Review Team’s Focus during FEL Phases
PLP Phase Project Team Goals Gate Review Team Focus

• Provide the client with the information • Support the client to validate the basis
to test the business concept against for assumptions underpinning the
the investment hurdle criteria for business concept
concepts • Confirm that optimized scope and
• Identify the business need and production, or throughput parameters,
establish the Client Requirements have been defined
Specification (CRS) • Confirm a thorough identification and
FEL1 – Conceptual Phase • Establish the key input, process and evaluation of alternative technology,
output production, or throughput costing and implementation
parameters approaches has been undertaken
• Establish a number of alternative • Check for areas of opportunity and
approaches to meet the defined risk to be investigated in later FEL
project objectives phases, to enhance value
• Develop a workable plan and cost for • Check the integrity of the FEL2 phase
taking the concept through the FEL2 planning and costing
phase
• Ensure the best project size, scope, • Support the client to validate the basis
technical and production solution has for assumptions underpinning the
been selected and is a viable business concept, as above
business concept aligned to the • Check for a thorough evaluation of all
business strategy alternative technology and
• Confirm the CRS implementation options for the chosen
• Demonstrate that all the discarded project size and scope, regulatory
project options have been studied, are requirements as well as project costs
clearly inferior and have no probability and benefits
of re-emerging as viable options, • Check for a thorough evaluation of
unless prescribed trigger events occur opportunity and risk to the business
• Test the selected project option case
FEL2 – Prefeasibility
Phase against the investment hurdle criteria • Determine the realism of targets set
• Set targets for further value for further value enhancement and
enhancement and risk reduction risk reduction
through application of Project Value • Validation of execution strategy
Analysis (PVA), Value Engineering development work.
(VE) and risk management processes • Check for integrity of the FEL3 phase
• Define execution drivers and planning and costing
demonstrate an understanding of
viable execution strategies
complementing the business case.
• Develop a workable plan and cost for
taking the concept through to the
FEL3 phase
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FEL Overview
PLP Phase Project Team Goals Gate Review Team Focus

• Optimize the project to refine project • Support the client to validate the basis
definition to a level sufficient to for assumptions underpinning the
support controlled execution business concept
• Establish the CRS shaping FEL3 • Check for the thoroughness of design
project definition development and planning to achieve
• Support the assessment of the the required levels of detail and
business proposition to a level of accuracy, as well as project costs and
detail and accuracy appropriate for a benefits
decision on implementation funding • Check for the thoroughness of
• Demonstrate benchmark performance evaluation of opportunity and risk to
and achievable success criteria, the business case
following a review of opportunities and • Check for the realism of benchmarks
threats used to establish best-in-class
FEL3 – Feasibility Phase • Investigate an acceptable risk profile achievable success criteria
and corresponding risk management • Check for the integrity of the FEL4
plan implementation planning and in
• Produce a detailed plan (PEP Parts A particular ensure the PEP is specific
and B (Note: some projects will fully to the project under study and is
complete Part C, however it is usual driven from a detailed understanding
for Part C to be completed as part of of the procurement, logistics,
early set up activities in FEL4)) for contracting, construction, social and
taking the project through to FEL4 environmental environments in which
implementation and operational the project will be built
readiness steps
• Produce a detailed cost estimate,
schedule and PEP for the FEL4
project execution phase
• Deliver the defined project outputs in • Typically, a Gate Review 4 is done
accordance with the CRS, facilities when:
description, PEP, budgets and  Engineering is ~70% complete
timescales  Procurement is well advanced,
• Satisfy the client’s requirements i.e. most equipment and material
• Satisfy stakeholders requirements, as supply purchase orders are
best as can be achieved awarded
 Some field contracts have been
• Execute the project
awarded and others are being
• Manage the budget within defined assessed post bid
FEL4 – Project Execution parameters
Phase • Validate the capital cost estimate and
• Manage the schedule within defined schedule to provide a firm view of final
parameters forecasts for project outcomes – cost
• Manage stakeholder expectations and schedule
• Manage changes required
• Manage risk resources, contractors,
consultants, communications,
procurement, engineering,
construction, industrial relations,
community and environmental
activities
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FEL Overview
1.1.1.2 Typical FEL Activities

The activities typically undertaken in each FEL phase are shown in Figure 1-3.
FEL 1 FEL 2 FEL 3 FEL 4
Work the Plan - deliver

Identify business need Confirm CRS the PEP
Establish CRS
and CRS
Generate
specifications
Prioritise options Develop Project Basic
Generate options Procurement
Engineering
Execute preliminary Detailed Design
Execute concept design Generate Project cost
designs and business case Gate 4 Review
Evaluate costs and
business case Construction
Evaluate costs and Generate detailled PEP
business case Parts A, B and C
Generate preliminary Test and Commission
PEP (Part A)
Generate FEL 1 phase Produce FEL3 phase Archive
report Generate FEL2 phase Report
report Acceptance
Gate 1 review Gate 3 Review Project closure

Gate 2 review
Post Project Review
Viable Concepts Single option approved Project option
approved to proceed to move forward wth sufficiently defined Generate Close out
to FEL2 FEL3 ready for execution report
Figure 1-3: Typical FEL Activities
1.1.1.3 Client Requirements Specification

A capital project usually starts its life as a client’s idea to address a market need, strategic
imperative or other requirement. This idea or concept is generated through the cyclic strategic
planning process within a particular client’s business process. These plans are typically
reviewed and updated over time. As the project passes from one phase to another, it is
essential to confirm validity of the incoming CRS. The outcomes of a prior FEL phase might
drive substantial changes to the content of the CRS for succeeding phases.
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FEL Overview
Consequently, the CRS needs to be reconfirmed at the beginning of each project phase. See
Section 6 for references to the CRS guide, template and checklist.
The initial business case will drive the basis for developing the FEL1 phase, progressing
through gate reviews to the FEL2 and FEL3 phases, with continuous alignment to the
strategic business plan to validate and define the overall project.
The scope, schedule and cost for each phase are largely dependent on the CRS for each
phase. The CRS defines the client’s project requirements. The CRS is the vehicle for the
client to provide the project team with information relevant to the project that only the client
might know, due to their intimate knowledge of their business.
The CRS should be a complete, clear and unambiguous statement of the client’s
requirements in measurable terms, and a key source document in setting the project context
and the required commercial outcomes. A well-prepared CRS will greatly reduce the
possibility of the project team making incorrect assumptions that deliver an unsatisfactory
result to the client.
The decision to proceed with any FEL phase is made on:
• The expected benefit of the end result of the project after completing the full FEL process
for that phase
• An evaluation of the cost of the FEL phase
• The level of risk or uncertainty associated with the study and the outcome.
If the decision is taken to proceed to a particular FEL phase, a project team is assembled to
execute the FEL study within the scope, time, cost and quality constraints defined in the CRS.
The study team, in consultation with the Gate Review Leader or team, also defines the gate
review criteria it will use to assess the quality of its deliverables against the CRS.
1.1.1.4 Gate Reviews

The gate reviews, during as well as at the end of each FEL phase, assess compliance with
the client’s requirements in the CRS for the particular FEL phase. Gate reviews are an
essential means of:
• Reviewing the project outcomes to date
• Confirming their alignment with the project objectives
• Reviewing the viability of the project
• Granting the necessary authorization for the project to be assessed for the next phase.
All large projects need to be reviewed for viability at regular, predetermined intervals before
being permitted to continue, to ensure that they are still worthy of the investment of further
time and capital.
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FEL Overview
1.1.1.5 FEL Sequences

Typically, the deliverables produced in a project phase include the expected costs, schedule
and plan to execute the subsequent FEL phase. The complete FEL phase project
deliverables that pass the gate review are handed back to the client to assess the viability of
the project, and to decide whether or not to proceed to the next FEL phase. As with the
previous phase decision, the decision to proceed to the next FEL phase is typically based on
the expected costs of the FEL phase, the residual risks and uncertainty as well as the
expected viability of the final project deliverable.
The process repeats through the FEL1 to FEL3 phases, until the start of FEL4. Before
starting FEL4, the major capital investment decision needs to be made. This decision is made
only if the level of risk and certainty of the outcome are in line with the client’s level of
investment and business investment criteria.
When the FEL4 phase and project execution is completed, the fully developed asset is
handed over to the client. Shortly after project completion and commencement of operations,
the actual benefits of the project need to be assessed and compared to those in the business
case against which the project was founded in the first place. Typically, this assessment is a
year after start up, but at least after the asset-related business is running consistently at full
capacity. This process closes the loop on the investment cycle back to the clients’ strategy
and business processes.
1.1.2 Benefits
Some of the many benefits for Hatch’s clients of following a methodical and consistent
approach throughout the PLP are:
• Improved capital investment effectiveness. Delivery of the required assets (performing as

specified), at the right time and the right cost.
• Consistent approach to capital project execution across client organizations.
• Standardization and common understanding of terminology.
• Alignment of the client’s project and the operations teams’ strategic planning functions.
• Rigorous gate review process with defined deliverables to ensure a comprehensive,

consistent phased approach to all projects.
• Better defined cost and schedule estimate levels, with less variability between clients/
various projects.
• Project schedule planning and project controls standards established for project
development.
• Active management of project risk as, in each phase, risk reduction needs to be
demonstrated when compared to the risk profile at the phase start.
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FEL Overview
2. Scope
This FEL Overview Process Guide provides an overview of the FEL1, FEL2 and FEL3 phase
work undertaken by Hatch.
3. Definitions
ARD:
Acid Rock Drainage
Capital Expenditure (CAPEX):
The expenditure on goods and services that will increase the fixed assets of a company.
Client Requirements Specification (CRS):
A document defining the complete customer’s requirements on a project in clear and
measurable terms. It is used as the basis for developing the scope of facilities and scope of
services.
Construction Work Package (CWP):
An executable construction deliverable that defines in detail a specific scope of work and
should include a budget and schedule that can be compared with actual performance. The
scope of work is such that it does not overlap another CWP.
DCF:
Discounted Cash Flow
Estimate at Completion (EAS):
The expected total cost of an activity, a group, a group of activities, or the project when the
defined scope of work has been completed and recognizing all anticipated variances from the
current budget.
EPC:
Engineering, Procurement, Construction
Engineering, Procurement and Construction Management (EPCM):
A project delivery mode in which the seller designs, manages the procurement of the
necessary goods and services from other sellers on behalf of the buyer, manages the
construction of the installation on behalf of the buyer, and manages the overall project on
behalf of the buyer.
ES&CI:
Environment, Sustainability and Community Interface
ESIA:
Environmental and Social Impact Assessment
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FEL Overview
Facility Breakdown Structure (FBS):

A breakdown of the project deliverables as physical assets based on function (process flow
sheets). It includes all of the permanent plant facilities that will be provided by the project and
is included in the work breakdown structure.
FEP:
Functional Execution Plan
Front End Loading (FEL):
The process for conceptual development of projects in processing industries.
Hatch Knowledge Centre (HKC):
The HKC is a centralized service for the business to collaborate, share and manage
information not stored in other Hatch systems.
HSEC:
Health, Safety, Environment and Community
Off Project Review:
Off project reviews are led and conducted by teams not actively engaged with the
development of the project. The team is selected to provide an experienced and independent
perspective to project reviews. Typically, off project reviews during FEL development work
take the form of a gate review.
Operational Expenditure (OPEX):
The OPEX includes variable costs (utility purchases, catalysts and chemicals consumed, etc)
and fixed costs (labor, maintenance, contract payments, sundries, local head office costs,
service company costs, but excluding depreciation) that are endured by the continuing
operational function.
Package Breakdown Structure (PBS):
Specific form of a work breakdown structure in which the project deliverables are organized
for project delivery. In this breakdown, the project elements are organized into prepurchased
equipment packages and construction contracts for detailed engineering, procurement and
construction.
Project Execution Plan (PEP):
A formal, approved document or collection of documents used to manage the execution
phase of a project (i.e. FEL4 phase). It includes a description of the project management
strategy, scope statement, the Work Breakdown Structure (WBS), cost estimates, project
schedule, project control baselines, major milestones, resource requirements, and subsidiary
management plans as required (e.g. scope, schedule, cost, communications, health and
safety, quality, risk, engineering, procurement, construction and commissioning).
Project LifeCycle Process (PLP):
PLP is Hatch's project delivery methodology. It embodies our complete approach and tools to
deliver projects throughout their life cycle, from concept to installation and operation, in a
structured, phased methodology.
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FEL Overview
Project Management Body of Knowledge (PMBOK):

A book published by the Project Management Institute (PMI) that represents a set of standard
terminology and guidelines for project management.
PVA:
Project Value Analysis
Quality Assurance (QA):
Part of quality management focused on providing confidence that quality requirements will be
fulfilled.
Quality Control (QC):
Part of quality management focused on fulfilling quality requirements.
TOC:
Table of Contents
Value Engineering (VE):
A function based problem solving technique that uses team interaction to maximize the value
of each project. Value is the ratio of functionality to cost as perceived by the customer,
function is the specific task required to satisfy a customer need, and cost is the resource
consumed in achieving the function.
Value Improvement Practice (VIP):
Practice from previous experience which will add significant value to the current project or
business and lead to an improvement in safety, cost, schedule, maintainability and operability
outcomes. VIPs are commonly used to improve cost, schedule and the reliability of capital
investment projects.
Work Breakdown Structure (WBS):
A deliverable oriented grouping of project elements that organizes and defines the total work
scope of the project, including both permanent plant facilities (organized according to the
facilities breakdown structure) and temporary facilities and services required to construct the
permanent plant facilities. Each descending level represents an increasingly detailed
definition of the project work.
For additional definitions refer to the Hatch Knowledge Centre Glossary.
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FEL Overview
4. Project Process Description

4.1 Study Purpose
4.1.1 Project Definition
The objective of the FEL1, FEL2 and FEL3 phases is to define a project that will meet the
objectives and requirements of our clients. FEL4 phase is devoted to executing the project
using baselines defined in FEL3 to control and manage project execution.
Project definition involves doing work in a structured framework to answer:
• Have we defined the right project that meets the client’s expectations?
• Have we done the right FEL phase work for the right project?
These questions are further broken down in Figure 4-1. The requirements and implications of
these questions are explored in the following sections. The final element of this Guide
addresses the project management elements associated with undertaking FEL phase work
(see Section 4.4).
Have we defined the right Have we done the right FEL

project phase work for the right
project
• Has the scope been fully
defined? • Does the work done in the
phase align with the
• Has the project
expected accuracy
configuration been defined,
outcomes?
studied and optimized?
• Does the work of the phase
• Have the execution
cover all elements required
requirements for the project
to define the complete
been defined?
project?
• Have the business objectives
been met?
FEL Phase
Project
Definition
Figure 4-1: FEL Phase Project Definition
4.1.2 Defining the Right Project
4.1.2.1 Scope Definition

Definition of the complete project scope is a fundamental requirement in determining that we
are studying the “right project.” A complex project might contain multiple elements over
multiple locations. Robust project scope definition requires that all project elements required
for the project to operate and produce a saleable product at the point at which revenue from
the project is realized are uniquely identified and included within the scope of the study, (refer
to Figure 4-2). Doing so ensures the complete project is evaluated during the phase.
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FEL Overview
Project
Location 1- On-site infrastructure, Battery Limit
indirect groups and wrap around

systems – On Plot
Product
On Plot - Mine
On Plot -
Process Plant
Battery Limit
Location 2 – On-site infrastructure,
indirect groups and wrap around
systems – On Plot
On Plot - Mine
On Plot -
Battery Limit
Process Plant
Off site – Infrastructure, indirect groups and

wrap around systems – Off Plot
Figure 4-2: Complete Project Scope Definition
To assist in rigorously defining the physical asset, allocating costs and preparing schedules in
a meaningful manner, it is usual to break the total project down into subsections: areas,
facilities, sub-facilities and systems. The WBS defines this breakdown. The level of definition
required by a phase is shown in Figure 4-3.
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FEL Overview
Figure 4-3: WBS Definition
WBS development should consider the complete project scope, i.e. the on-plot scope and off-
plot scope, to an agreed set of battery limits defined within the CRS, see Figure 4-2.
Note: Indirect groups reflect temporary work required to support the construction of the
project, e.g. camps, warehouses and construction power.
The WBS should be defined at the beginning of a phase, as the WBS drives:
• Estimate presentation
• Schedule development
• Equipment tagging
• Line numbering
• Drawing numbering.
The WBS should contain all elements of the project, as shown in Figure 4-2, for example:
• On site elements, including:
 Processing facilities
 Infrastructure
 Wrap-arounds
 Indirect elements, including temporary facilities and construction facilities.
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FEL Overview
• Off-site elements, including:
 Infrastructure
 Wrap-arounds
 Indirect elements, including temporary facilities and construction facilities.
4.1.2.2 Defining the Right Project - Have All Options Been Exhaustively Identified?
Efficient progression of a project from FEL1 to FEL3 and then into construction requires that
the right project is defined. In the previous section, the project was disaggregated into
discrete components to ensure complete definition. Now, we question if we have defined the
right project. Questions that influence this decision might include:
• Have the most appropriate (globally available) technologies been applied?
• Has the optimal and sustainable capacity been defined?
• What products and to what specification and quantity are to be produced?
• Are optimal sites selected for project development?
• Is the project configuration optimal?
• Is the construction methodology designed to meet the project’s need?
• What are the costs of constructing the proposed project?
• Are there environmental, social and community sensitivities that will shape the project?
• Other questions specific to the project.
For any project there are many answers for these questions, which are often integrated in a
web of complex interactions.
The objectives and processes within each of the FEL phases are summarized below.
4.1.3 Defining the Right Project - FEL Phase Implications
4.1.3.1 FEL1- Concept Study

Table 4-1: FEL1 Concept Study
FEL Phase Objective

FEL1 – Concept Study Define the range of potential project options for definition and
development that meet the business needs of the client. In other
words, what are the viable options for development of this project?
The work of this phase may be termed “Optioneering.”
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FEL Overview
4.1.3.1.1 Evaluate Options and Select the Base Case

Typically, some options might fail a prescreen hurdle assessment, a fatal-flaw analysis and,
with further work, a business-case hurdle test. The work of this phase is to establish
frameworks to constantly evaluate options through the phase, eliminate options with cause,
and then develop those options that meet the business case. Typically during FEL1, one
option of many surviving the business case hurdle is designated as the base case for
comparison purposes.
A possible scenario for option identification and analysis through FEL1 is shown in Figure
4-4.
4.1.3.1.2 Documenting Analyses

As many major projects span many years and might often experience staff turnover on both
the client and Hatch teams, it is critical during this phase to document analyses and rationale
for eliminating options. It is also prudent to document those conditions, if any, under which
rejected options become viable. In this way, costly revisiting of discarded options during
future project phases may be avoided.
4.1.3.1.3 Continuous Option Screening during the Phase

Tools and methodologies applicable to the FEL1 phase rely on qualitative decision-making
methods as described in the FEL1 Process Guide (refer to Section 6). Early elimination of
options, with good reason, allows budget allocations, with client consent, to be applied to the
remaining options to develop improved option definition, rather than continuing to apply a
uniform effort to all options through to the end of the study.
Pre Screen Fatal Flaw Business Case

Hurdle Hurdle Hurdle
Option 1 Option Study
Option 2 Option Study Base Case
Study
Option 3
Work
Option 5 Study Work
Option definition stopped upon failure to pass the hurdle. Work to this point
is documented in the final Study deliverable with the rationale for failing the hurdle
Figure 4-4: FEL1 Option Analysis
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FEL Overview
4.1.3.2 FEL2 - Prefeasibility Study

Table 4-2: FEL2 Prefeasibility Study
FEL Phase Objective

FEL2 – Prefeasibility Study During FEL2, the objective is to define the single preferred option
that meets the business needs of the client and will be studied in
detail in FEL3, by:
• Evaluating the options arising from FEL1
• Improving the level of understanding of the project and its
implementation
• As in FEL1, where possible, progressively eliminating options
that, upon further investigation, contain a fatal flaw, or fail to
meet the business case requirements.
This phase focuses on option ranking and elimination.
4.1.3.2.1 Evaluate and Eliminate Options - Recommend a Single Option for FEL3
As with FEL1, options should be eliminated with cause. The remaining FEL2 work should be
biased towards reducing the risk profile of the remaining options and improving project
definition for those options, with client consent. This may involve test work or third party
information to be sought to bolster assessments to allow identification of a single
recommended project option for FEL3 investigation.
4.1.3.2.2 Documenting Analyses

Eliminated options should be reported within phase-end deliverables to evidence a rigorous
and transparent process leading to the recommendation of a single option to be carried
forward into FEL3.
4.1.3.2.3 Continuous Option Screening During the Phase

Decision-making frameworks at this stage should become more objective with data collected
from field investigations, test work and other newly collected project data underpinning
analyses and recommendations. Data and models from FEL1 should be used to trend option
performance as new and better information develops through the phase. Like the FEL1
phase, options that can be eliminated early, with cause, allow the remainder of the FEL2
phase to focus on improving definition for the remaining options. Use of financial models to
assess the viability of the business case should begin in FEL2.
A possible scenario for option identification and analysis through FEL2 is shown Figure 4-5.
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FEL Overview
Fatal Flaw Business Case

FEL 1 Inputs
Hurdle Hurdle
Option 1
Base Case
Option 2 From FEL 1
FEL 2 Option Study Option for FEL 3
Option 3
FEL 1
Option 4 Result
Option Study
Option 5
FEL 1
Option 6 Result
FEL 2 Option Study
4.1.3.3 FEL3 - Feasibility Study

Table 4-3: FEL3 Prefeasibility Study
FEL Phase Objective

FEL3 –Feasibility Study Project definition to a level to enable a business decision to be
made to build the project and provide:
• Robust project definition
• Execution planning
• Control baselines for:
 Cost estimates
 Schedules
 Scope.
To enable the project to be built according to the definition
contained within the FEL3 phase end deliverable, i.e. the study
report. In short – define the project to be built and how it will be
built.
The phase focuses solely on project definition to:
• Make an investment decision to build the project
• Provide a robust baseline to manage and monitor project
execution performance through the FEL4 phase.
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FEL Overview
4.1.3.3.1 Planning for Project Execution

Unlike FEL1 and FEL2, FEL3 is aimed at project planning from an execution perspective to:
• Generate sufficient information to allow a decision on execution to be made (including

finance)
• Define the baselines against which the project will be managed and controlled during
FEL4.
As such, it is expected that at the start of FEL3:
• All field data collection and test work is substantially complete
• A single definition exists for the project for:
 Scope
 Execution method
 Schedule
 Financial objective.
4.1.3.3.2 Single Project Definition and Optimization

As expected, FEL3 as shown in Figure 4-6 reflects an absence of option evaluation, and
focuses on a single project definition for the phase. Inherent and necessary FEL3 work
includes analyses to refine such things as equipment selections, packaging strategies and
construction methodologies, which are necessary to optimize the project and provide
information necessary for baseline definition.
The FEL3 phase is notably different from the previous project phases. All major defining
decisions about the project and its implementation have been studied and rationalized during
FEL1 and FEL2. FEL3 work is focused on optimizing the single project definition
recommended from FEL2, and then extending that definition to meet the accuracy
requirements of the phase (see Section 4.2.1).
4.1.3.3.3 Continuous Project Assessment during the Phase

During the FEL3 phase work, a constant review of the business case should be maintained to
incorporate new data when it becomes available. Consequently, the financial model
framework for FEL3 is refined from FEL1 and FEL2, and the model populated with FEL2 data
and then updated as new data emerges.
If adverse trends in the expected business case are determined, such trends should be
discussed with the client and, if required, alternative strategies developed, if possible, to
mitigate the adverse trend. Such changes require strict application of change control
protocols before implementation.
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FEL Overview
Fatal Flaw Business Case

FEL 2 Inputs
Hurdle Hurdle
Option 1
Base Case
Option 2 From FEL 2
FEL 3 Project Planning Project for FEL 4
Option 3
Option 4
Option 5
Option 6
4.1.3.4 FEL4 - Execution

Table 4-4: FEL4 Execution
FEL Phase Objective

FEL4 – Execution Build the project to the definition and baselines defined in FEL3
Work in FEL4 entails executing the project as defined in FEL3 (see Figure 4-7.). It is
expected that in FEL4, the task of the project team is to manage the delivery of the project
according to the strategies and plans recorded in the PEP developed in FEL3. The team will
monitor progress and change against the project baseline data developed in FEL3. Refer to
the FEL4 process guide in Section 6.
The deliverables and mode of project delivery are defined in the PEP. The focus for Gate
Reviews in FEL4 moves from a definition focus as in FEL1 through FEL3 to a focus on
validation that the setup task is complete and that the scope cost, schedule and other project
metrics are being tracked, trended and managed to provide our clients with a reliable
perspective on final project outcomes.
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FEL Overview
Whilst the focus for the phase is “aggressively resist change,” change can and will occur
during the project as new information and circumstances present themselves. In all cases it is
expected that the Project Manager and the project team define change as and when it
occurs, and resist the temptation to act unilaterally and initiate change before the full impacts
are well defined and approved by the client. Hatch stands behind being honest and open with
our clients, and strive to develop strong client relationships.
Short-term acquiescence to address client demands will initially bring favor. However, this
favor soon evaporates, and client relationships are destroyed when the full impact of
implemented change becomes apparent, usually long after the decision to implement the
change has passed. The focus for the team and their managers is to proactively assess and
seek alignment on change with our clients, affording them the chance to buy into impacts,
rather than being presented with sticker shock later in the project.
Business Case
FEL 3 Inputs
Hurdle
Option 1
Execute against Baselines defined in FEL3 – Strive to

Option 2 Definition from FEL3
improve the Business Case through Execution
Option 3
Option 4
Option 5
Option 6
Figure 4-7: FEL4 Execution
4.1.4 Project Execution Planning

Within PLP processes, the study work plan should not be confused with the PEP, as:
• The PEP defines the strategies, plans and baselines associated with construction of the
project, i.e. the PEP defines the FEL4 project execution phase.
• The study work plan defines the work to be completed in a project phase, specifically
FEL1 to FEL3. Within the study work plan, one activity should be the development of the
PEP, according to Table 4-5.
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FEL Overview
4.1.4.1 Project Execution Planning and Costs

Amongst many variables, project execution planning is a significant driver of project cost,
both direct and indirect. With indirect costs ranging up to 50% of the Estimate at Completion
(EAS), and Engineering, Procurement and Construction Management (EPCM) costs typically
ranging between 10% and 20% of the EAS, the services management element of a project
often contains the largest single-line cost items for the project.
Choice of execution method drives:
• The capital cost of the project. Consider, for example, the costs of multiple, large module
yards in multiple countries with seaborne shipment of modules weighing 5000 tonnes or
more, compared to conventional in-country stick-built approaches.
• The split of cost between client and the management organization. clients often do not
carry the full cost to the company of their client team members. Other client-related costs
are sometimes not visible to the EPCM team, as these are sometimes buried in corporate
overheads. This issue often causes much discussion with clients, as prima facie the
Hatch unit cost is much higher than that of the client. After inclusion of indirect costs on a
comparable basis, client and Hatch costs come into alignment. Nevertheless, it is often a
lower cost for client team members that will be seen in the final estimate, depending on
the accounting policies of the client.
• Split of work responsibility between the client, Hatch, vendors and contractors might
include the following:
 Some clients prefer to manage the complete procurement process themselves, with
Hatch managing the remainder of the EPCM mandate
 Use of specialist Engineering, Procurement, Construction (EPC) providers results in

increased direct costs and a reduction in EPCM costs and alters the level of EPCM
team effort required to manage the project
 Use of general contractors might result in Hatch providing a management and control
service to the project.
Our experience provides strong evidence that uncontrolled change in execution approach
from one phase to the next drives significant adverse cost and schedule trends into the final
project cost.
4.1.4.2 Staged Project Execution Plan

Within the PLP, early definition of PEP is considered essential, and capital costs should be
aligned to the content of the PEP. The staged development of the PEP is shown in Table 4-5.
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FEL Overview
Table 4-5: Stage PEP Completion through the PLP Phases
FEL1 FEL2 FEL3 FEL4
• In use from
PEP Part A – FEL3
• Developed
Project • Complete • Plan reviewed,
Definition and • Major
• Not started confirmed and
Execution execution • Ready for
any changes
Strategy strategies execution
approved and
Development defined
incorporated
into the PEP
• In use from
FEL3
• Complete
Part B – • Plan is
Project Execution Plan
Functional • All (FEP) are

• Not started • Not started reviewed,
Execution aligned with
confirmed and
Plans (FEP) Part A and
any changes
ready for
approved and
execution
incorporated
into the PEP
• Substantially
complete
• Baseline data • In use from
from FEL3 FEL3
• Preliminary collated. Full
• Baseline data
allocation of
Part C – • Data extracted from FEL3 is
costs to
Control • Not started from the capital collated and
packages,
Baselines cost estimate fully ported
contracts and
and project into the project
Construction
schedule systems as
Work
control
Packages
baselines
(CWP) might
be held over to
FEL4.
4.2 Phase Requirements

4.2.1 Phase Deliverable Accuracy Requirements
4.2.1.1 Drivers and Definition

The Study Manager for a given phase is tasked with understanding the major drivers of
estimate accuracy and to define a balance between meeting client requirements for phase-
end accuracy requirements, the work to be done in the phase and, therefore, the cost of our
services as seen by the client.
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FEL Overview
4.2.1.2 Estimate Requirements

Figure 4-8 shows the relationship between the expected outcome and the requirements for
the definition of inputs to the estimate in order to achieve the required estimate accuracy
levels. Many clients refer to studies achieving a certain accuracy requirement only, and leave
it to the study team to do the work necessary to achieve that level of accuracy. For
experienced project developers, the linkage between the level of effort within a study phase
and the expected accuracy outcomes is well understood. For less experienced project
developers, this linkage is poorly understood. During development of the scope of work for a
project phase, it is essential to clarify and reach a mutual understanding of the level of effort
required to deliver the expected estimate outcome.
Within each of the FEL process guides (FEL1 to FEL3, see Section 6) guidance is provided
by discipline on the requirements for generating the quantity and unit cost drivers for
preparing the estimate.
Figure 4-8 summarizes this information.
Cost Basis
Awarded
Contracts/Purchase
Orders – actual costs
FEL 4
(accuracy 10 to 0%)
Firm Bids – materials

and equipment.
Contractor pricing for
construction.
FEL 3
(accuracy 15 to 5%)
Budget Quotes,
previous project data
FEL 2
(accuracy -10 to +30%)
Capacity factored
using judgment, prior
project data and
stochastic models
FEL 1
(accuracy -50 to +100%)
Factored Quantities Preliminary Quantities Determined – near Approved for Quantity Basis
from previous – Major Equipment Approved for Construction,
projects or parametric defined, preliminary Construction, all Awarded or
estimating tools assessment of major disciplines Constructed
commodity elements. Quantities
1, 2, 3
Figure 4-8: Estimate Basis and Accuracy
1
The +/- level value represents a typical percentage variation of actual costs from the cost estimate, after applying contingency
(typical at a level of 50% level of confidence, i.e. P50) for a given scope.
2
Refer to PLP-620-020-0001 – Project Capital Cost Estimate Discipline Guide
3
The accuracy ranges shown on the Figure 4-8 are included as a guide and describe a target accuracy only. In practice there is a
range around the maximum and minimum expected estimate accuracy ranges as well.
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FEL Overview
4.2.1.3 Estimate Accuracy

Accuracy assessments are increasingly driven by analysis rather than an arbitrary
assessment. For FEL3 and FEL4 phases, and some complex FEL2 studies, quantitative risk
assessments are undertaken, and an objective measure of estimate accuracy is defined.
Figure 4-9 shows how estimate accuracy can be demonstrated objectively. It is usual that
accuracy in this context is quoted against a confidence range, i.e. over a range of 10% to
90% (the range provides an 80% chance of the project neither under running or overrunning)
the accuracy is assessed as –y%, +x% around an expected (P50) value of Z. The choice of
contingency level will vary from client to client and according to their appetite for accepting
cost risk. The figure shows one position for defining contingency, there are many and the
definition of an appropriate contingency level requires negotiation and agreement with the
client.
The challenge in completing the phase of work is to focus on work elements defined within
the gate review checklist that have significant leverage in influencing the estimate and
accuracy targets for the estimate. The study work planning process should reflect an
assessment of the major drivers for the capital cost (hence where the project definition effort
should be spent) and the work required to achieve the levels of estimate accuracy required of
the phase.
Completion of all items within the gate review checklist to the required levels of completion
defined in the gate review checklist might result in effort being applied to work fronts with
marginal impact on overall project viability.
Capital Cost Estimate – Cumulative Probability Distribution
Accuracy (-%) Accuracy (+%)

Probability of under running estimate %
P50 or Median – 50/50 chance

P10 – 10% chance
P90 – 90% chance

Base Estimate
of under run
of Under run
of under run
Contingency Risk Funds
Capital Estimate
Figure 4-9: Estimate Accuracy Definitions
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FEL Overview
4.2.1.4 Gate Review Checklist

The gate review checklist (refer to Section 6) provides, per phase, a definition of:
• The typical suite of work, by discipline, required to demonstrate the levels of investigation
and analysis required of each project phase
• The level of completion required of analysis and definition activities within each of the
suites of work.
Completing all items within the gate review checklist is expected to strongly influence the
achievement of the required level of accuracy required of the phase. Upon consideration of
the influence of all items within the checklists, not all items contribute to the estimate
accuracy equally.
4.2.2 Hatch Requirements - Determining the Work Required in the Phase
4.2.2.1 Study Scope and Content

The major subject areas to be considered for study work during a phase is defined within the
study report template contained within the HKC (refer to Section 6). The Table of Contents
(TOC) for the study report spans subject areas that our clients expect. Section 4.2.3 outlines
examples of subject matters for phase-end reports expected from some of our major clients.
The subject areas within the report template, which are general requirements for study work
in each phase, are shown in Table 4-6. Appendix A provides an executive summary of the
objectives of each section of the study report, and the level of completion required of the
phase. Review checklists provide detailed guidance on the types of deliverables and their
level of completion required for a given FEL phase. Consistently, the message to FEL phase
leaders and managers is to use the guidelines to understand what can and should be done in
a FEL phase. The impact a single element has on the overall target phase accuracy and
definition requires assessment and justification by the FEL phase team when preparing the
FEL phase work plans (study work plans and PEP) and, subsequently, related gate reviews.
Table 4-6: Study Reports – Sections
Report Report
Section Title Section Title
Section Section
1 Executive Summary 14 Human Resources
2 Project History 15 Operating Cost Estimate
3 Geology 16 Market Analysis
4 Mineral Resources 17 Legal and Fiscal
5 Mining 18 Health, Safety, Environment and
Community
6 Process Definition 19 Sustainable Development
7 Engineering Development 20 Financial Analysis and Evaluation
8 Project Layout 21 Project Risks and Opportunities
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FEL Overview
Report Report
Section Title Section Title
Section Section
9 Process Plant 22 Execution Plan
10 Site Development and 23 Operations Assurance
Infrastructure
11 Business Systems
12 Project Schedule
13 Capital Cost Estimate
The development of the final TOC and the specific requirements for each TOC section for the
current phase requires:
• Alignment with the client
• Execution at the beginning of the phase
• Documentation within the CRS.
In general, the objectives and requirements of each subject area within the TOC are outlined
in Appendix A. Appendix A provides an insight into the objective subject matter to be
considered in each phase of the project and the required completion status. Appendix A may
be thought of as an executive summary to the gate review checklist (refer to Section 6). The
study TOC is intended to provide:
• A refresher for experienced personnel
• A guide for people new to senior roles and undertaking gate reviews
• A guide for new Hatch personnel on the requirements for completing FEL1, FEL2 and
FEL3 work.
4.2.2.2 Gate Review Activities and Risk Management

The gate review checklist provides:
• The detail to evidence that the correct level of work has been undertaken in completing
the phase
• An objective basis on which to assess project risk and consequent contingency, and risk
provisions, to be included within the project definition to achieve phase completion.
Note that completion of all gate review checklist items to the requirement of the gate review
checklist is not often achieved on the first pass through a phase. The gate review checklist
provides a prompt to start the discussion on risk mitigation. The closure of the discussion and
demonstration of how risk mitigation measures have been included within the final phase
deliverables is an essential obligation of the Study Manager.
Section 4.3 provides guidance on the implementation of the gate review process as a
necessary part of any work leading to completion of a FEL phase.
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FEL Overview
4.2.3 A Client View on Phase Deliverable Content

The subjects to be considered within a FEL study, independent of the scope option, are well
defined. Clients have their own specific needs and reporting formats, as shown in Table 4-7.
The development of the phase-end TOC is required when developing the study work plan for
the current phase. The study work plan defines responsibilities for completing each element
of the final deliverable, and should be defined along with responsibilities for reviewing and
updating processes for inputs generated from others. Whilst there are specific requirements
of some clients for the order in which materials are presented, on the whole, the subject
matter to be covered during a phase evaluation is common to all of our major clients.
The Hatch Study Template (refer to Section 6) has been developed to cover each of the
major topics our clients require.
Table 4-7: Phase-End Deliverable Structure and Subject Matter – Examples
Section Client 1 Client 2 Client 3 Client 4

1 Summary and Executive Summary General Executive Summary
Recommendations and
Recommendations
2 Business Strategy Development Strategy Strategy
Approach
3 Marketing Risk Market Analysis Market Analysis
4 Country and Health and Safety Risk Management Risk Management
Regional Settings
5 Security Environment Geology and Mineral Geology
Resources
6 Stakeholders and External Relations Mining Mining
Communication
7 Government and Geology and Mineral Metallurgical Metallurgical
Communities Resources Processing Processing
8 Human Resources Mining and Ore Infrastructure Mineral Resources
and Industrial Reserves and Reserves
Relations
9 Tax, Legal and Mineral Processing Engineering Infrastructure
Commercial Development
10 Permits and Waste Management Human Resources Engineering
Approvals Development
11 Health and Safety Infrastructure and Project Execution Operations
Services Management
12 Environment Logistics Operations Human Resources
Management
13 Geology Human Resources Information Information
Management Management
14 Geotechnical Technology and Health, Safety, HSEC and
Information Systems Environment and Sustainable
Community Development
15 Hydrology and Project Execution External Relations External Relations
Hydrogeology
16 Mining Operations Capital Cost Capital Cost
Estimate Estimate
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FEL Overview
Section Client 1 Client 2 Client 3 Client 4

17 Process Closure and Operating Cost Operating Cost
Rehabilitation Estimate Estimate
18 Process Plant Capital Costs Ownership, legal and Investment
Contractual Evaluation
19 Infrastructure and Operating Costs Investment Ownership, Legal
Services Evaluation and Contractual
20 Project Execution Marketing Project Status and Project Execution
Planning Reviews
21 Construction Ownership, legal and Work Plan Work Plan
Management approvals
22 Operations Financial Analysis Project Status and
Readiness Reviews
23 Capital Cost Estimate Funding
24 Operating Cost Status of Studies
Estimate
25 Risk Management Work Plan- Future
26 Business Analysis
27 Next Stage Execution
Planning
4.3 Gate Reviews

The last element of the PLP process for a phase is the review to define the degree to which
all elements of the work described in the study work plan have been completed, and to
provide a quantified assessment of the risk remaining with project definition.
The gate review process guide (see Section 6) provides direction on the objectives of the
gate reviews, the determination of which projects require review and the process of the
review.
A formal review session provides the organization with an off-project status review and
provides recommendations for the Study Manager to improve the work completed to date.
Regardless, the Study Manager is encouraged to regularly refer to the gate review checklist
to ensure all elements likely to have an impact on the accuracy requirements of the phase, or
on the quality of deliverables, is appropriately addressed. If a gap is found in work in
progress, work to close the gap should be prioritized to those elements with the greatest
leverage on overall phase-end deliverable accuracy.
4.4 FEL Phase Management

4.4.1 Prior Phase Work
4.4.1.1 Level of Completion of the Previous Phase Work

The integrity of the PLP process rests on the completion of a structured program of work
before progressing to the next phase. The linear progression from one FEL phase to the next
leading, ultimately, to Hatch’s execution of the project is our preferred development approach.
However, Hatch often undertakes discrete FEL phase projects, and furthers the work of
others.
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FEL Overview
It is necessary at the beginning of a new FEL phase to develop a good understanding of the
level of completion of the previous phase before starting the current phase of work.
Incomplete work elements from a previous phase might result in:
• New options entering the project, driving unplanned work, cost and schedule impacts
• New information based on exploration, field investigation or test work programs,

contradicting assumed or preliminary data and requiring major scope upgrade, or revision
to the business-case outcome
• Rework and delay from many areas.
4.4.1.2 Previous Phase Gate Review

When starting a new phase, it is required that the Study Manager reviews the outcomes of
the previous phase gate review. When Hatch undertakes FEL phase work from third parties,
it is prudent to:
• Review the work of the previous phase using gate review protocols
• Define gaps, or outstanding items, requiring completion from the previous phase of work
(this analysis is usually done by the Hatch team undertaking the new phase of work).
4.4.1.3 Outstanding Items

Regardless if a previous phase was completed by Hatch or a third party, it is necessary to
confirm outstanding items have been:
• Completed and outcomes are available for the start of the current phase; or conversely
completion gaps are defined
• Defined – the work required to address outstanding work issues has been defined, and
agreement made with the client:
 For the outstanding work to be completed as part of the current phase
 That the work will not be done, in which case, records of this decision need to be kept
and appropriate entries made in risk registers to ensure risk associated with these
items is captured during risk reviews, and appropriate allowances are made.
4.4.1.4 Gate Review Checklist and Benchmarks

Completion of all elements within the gate review checklist provides strong guidance on
whether or not the requirements of a FEL study have been delivered. The checklists should
be used as a guide for completing the phase. A balanced view should always be maintained
to ensure focus is applied to those elements with the greatest leverage on defining project
definition, and the accuracy of that definition. The benchmarks for contributing to the
successful completion of a FEL phase include:
• Achievement of the objectives of the phase in terms of scope definition and project option
analysis
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FEL Overview
• Alternatively, substantial completion of the appropriate elements of the work defined

within the gate review checklist, but with appropriate adjustments and allowances to cost
and schedule to allow for work that is not complete
• Achievement of the levels of accuracy for estimates produced for:
 FEL1 and FEL2, which is evidenced by completion of the checklist
 FEL3 and complex FEL2 projects, by a quantitative risk assessment.
See Figure 4-8 and Figure 4-9.
If all work elements contained within the gate review checklist are completed to the
prescribed standard, and yet the phase fails to meet the objectives of the phase, a
determination needs to be done as to whether or not the phase has been effectively
completed, for example either the project has:
• Incomplete or insufficient option identification or ranking
• Not met estimate accuracy requirements.
4.4.2 Management
4.4.2.1 Management Workflow

The work processes, hence the work of management, to be applied to any FEL phase is
similar and follows the model shown in Figure 4-10. Within the HKC are detailed workflows
describing Hatch’s methodology for developing projects. These workflows have been aligned
to the major process groups shown within Figure 4-10, and are not repeated within this guide.
The management processes required to be implemented by a Study Manager of FEL phase
work is outlined in detail within the project management discipline guide (see Section 6).
The critical elements of each process step shown in Figure 4-10 are contained within each of
the respective FEL1 FEL2 and FEL3 Process Guides.
The following outlines specific topics to be considered by project leaders in developing FEL
phase work.
Execute
Context Setup Evaluate Close Out
Control
Figure 4-10: Management Workflow
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FEL Overview
4.4.2.2 Level of Effort and Management Controls

The level of effort to be applied to each of these management activities for each FEL phase is
represented in Figure 4-11. The specific responsibilities of the Study Manager for a FEL
phase are detailed within the study manager role description (see Section 6).
Context,
Setup,
Execute,
Level of Effort
Control,
Evaluate,
Closeout
FEL 1 FEL 2 FEL 3 FEL 4
Figure 4-11: Management Level of Effort per FEL Phase
In establishing the management framework for a phase, a balance has to be made in the
effort and systems applied to doing the phase work, and the work of managing a phase and
delivering an outcome within the managed expectations of the client.
Completion of high-quality technical work without appropriate management controls, resulting

in overruns and delays, has the potential to:
• Sour the outcome of the current phase
• Prejudice the client against awarding further work to Hatch.
4.4.2.3 iPas Suite of Tools - Tools, Systems and Processes

A typical roll out of Hatch systems (iPas tools) for each FEL phase is shown in Figure 4-12.
Unless noted to the contrary full systems application is expected for all FEL phases.
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FEL Overview
Figure 4-12: Typical iPas Tools Usage by FEL Phase
Systems requirements for the phase need to flow directly from the study work plan. The study
work plan defines the disaggregation of phase work into work packages, and how the work of
those packages is managed and delivered. The iPas suite of tools have been designed to be
scalable and applicable to projects ranging from large EPCM projects launched across
several countries down to small studies. The study work plan provides the direction on the
level of application of the tools.
The Study Manager is accountable for defining an appropriate management system using
appropriate tools, systems and processes to provide the client with a controlled, transparent
and predictable phase delivery.
4.4.3 Phase Work Planning
4.4.3.1 Study Work Plan

The requirements for PEP development through the PLP are defined in Section 4.1.4, and
distinctions drawn between the PEP and the study work plan. The study work plan
requirements are defined within the Study Work Plan Process Guide, see Section 6. The
study work plan process guide details the processes to be undertaken to prepare a robust
plan to complete the FEL phase, and these processes are shown in Figure 4-13.
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FEL Overview
Define Define Define

Work Plan
Package Package Setup Implement
Scope Integration
Structure Work Plans
Figure 4-13: Study Work Plan Processes
The processes to form a study work plan are the same for all FEL phases. The effort and
detail required to develop a work plan that provides a sound baseline on which to manage the
work of the phase follows the level of effort required to manage the phase, refer to Figure
4-11.
4.4.3.2 Package Work Plans

For FEL1, FEL2 and FEL3 studies, emphasis needs to be placed on developing the individual
work plans for each package, and defining the basis on which work will start and be
progressed:
• Relative to other interrelated work packages
• For packages where there is concurrent or parallel work in developing the information
required as inputs to other work packages, for example:
 How to progress process design when sample collection, sample testing and process
testing has not been completed or started?
 How to progress process design related to a mine whose mine design, production
schedules and expected run-of-mine feed specification is being defined as part of the
current phase?
For parallel work, work normally proceeds on the basis of assumptions or data developed
from the previous phase. It is prudent within the package work plan to define hold and check
points to confirm that data developed during the phase supports the incoming assumptions.
Where there are variances, a change process needs to be triggered. The package work plan
and manner of work plan integration contained in the study work plan provides the baseline
against which variations can be identified and assessed.
4.4.4 Final Phase Deliverables - Quality Assurance

The content and requirements to be demonstrated in the deliverable, normally a report or
input to a report, are shown in Appendix A.
The final deliverable is the one deliverable that encapsulates months, and possibly years, of
high-quality work from within Hatch. The report is expected to:
• Transparently evidence the work, analyses and conclusions formed during completion of
the current phase
• Demonstrate to a third party that the objectives of the phase (see Appendix A) have been
met
• Be a standalone document.
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FEL Overview
Typically, the report will be disaggregated and distributed widely within the client organization
and third parties (contract allowing) for review and acceptance. Report preparation is one of
the last opportunities to present a quality product by Hatch for the current phase. Therefore, it
is important to consider that:
• The report is written as if by one person and is written to present objectively and
impartially the work and findings of the study.
• The quality of writing and presentation matches the quality of the technical and other
inputs. Consideration should be given to appointing a technical writer and editor to review
and polish the report before presentation to the client.
• The report format and content is agreed early in the phase with the client to ensure their
expectations are fully reflected in the final deliverable.
Report writing is often left as the last, undesirable work activity on a project. Managers are
encouraged to start report preparation early, and to progressively assemble the report in both
hardcopy and electronically to allow progressive release to the client. Early definition of
protocols for report preparation and definition of protocols for assembly of the report within
iPas DM is encouraged, and should form part of the study work plan. The assembly and
status of report elements should become a routine subject for management progress review
during the phase.
5. Responsibilities and Cross-Functional Requirements

5.1 Roles and Responsibilities
The Study Manager and Project Sponsor represent the two most important roles to be
performed during the study. A detailed role description for each person is referenced in
Section 6.
5.2 Client and Client-Appointed Third Parties

The responsibilities of the client and any client-appointed third parties should be defined
within the CRS, and further defined within the study work plan. The CRS should be specific in
defining:
• Review and approval cycles to be provided by the client for Hatch materials.
• Detailed schedules for delivery of client and client third-party deliverables to Hatch, to
enable Hatch to complete its work. The definition of deliverables should contain a precise
definition of the level of completion required by Hatch for the study schedule to be
maintained.
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FEL Overview
5.3 Hatch-Appointed Third Parties

The roles and responsibilities of Hatch-appointed third parties are defined in the
specifications and scopes of work provided to the third parties prior to engagement by Hatch.
In nearly all cases, Hatch-appointed third parties should be working to the same level of
definition and schedule applicable to Hatch. Our contracts normally require that Hatch will
maintain liability and responsibility for any work undertaken by third parties contracted to
Hatch. The Study Manager has a responsibility to ensure the work undertaken by third parties
meets the deliverable requirements of the current study phase.
5.4 Cross-Functional Requirements within Hatch

In developing the study work plan, based on the CRS, the Study Manager will define the
functional support required by Hatch that is necessary to complete the study. The Study
Manager is accountable for negotiating access to required functional personnel, and
assigning work to meet the requirements for completing the study.
5.5 Study Workflows

Workflows for FEL3 and FEL4 can be found within the HKC. Workflows for FEL1 and FEL2
are under development.
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FEL Overview
6. Associated Documents
Table 6-1: Associated Documents
Document Identification Document Title

PLP-103-008-0004 Client Requirement Specification Checklist
PLP-103-020-0006 Client Requirement Specification Guide
PLP-103-086-0010 Client Requirement Specification Template
PLP-100-020-0007 FEL1 Process Guide
PLP-100-008-0001 Gate Review Checklist
PLP-100-020-0001 Gate Review Process Guide
PLP-620-020-0001 Project Capital Cost Estimate Discipline Guide
PLP-100-020-0002 Project Management Discipline Guide
PLP-104-074-0002 Project Sponsor
PLP-104-074-0006 Study Manager
PLP-103-086-0011 Study Report Template
PLP-100-020-0004 Study Work Plan Process Guide
PLP-100-086-0005 Study Work Plan Template
PLP-103-020-0003 Value Improvement Practices Process Guide
7. Reference Documents
Table 7-1: Reference Documents
Document Identification Document Title

PLP-100-014-0003 Typical Owners Project Capital Development Program
PLP-100-014-0002 Project Delivery Processes and Deliverables
PLP-100-014-0001 Project Lifecycle Overview Diagram – Facility Scope Definition
and Delivery
PLP-302-014-0001 Project Lifecycle Overview Diagram – Material Management
PLP-603-014-0001 Project Lifecycle Overview Diagram – Change Management
PLP-600-080-0001 Standard Project Coding Structures
PMBOK Project Management Body of Knowledge
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FEL Overview
Appendix A
Study Table of Contents - Objectives and
Requirements

FEL Overview
Study Section Study Section Scope FEL1 FEL2 FEL3

1. Project History Define the: Gather preliminary data Obtain preliminary site- Complete detailed site-
• Project objectives, benchmarks and key performance derived from the public specific data, including field specific information and
indicators domain, specific to the investigations work. test work, and complete
project location. outstanding field
• High level scope of facilities to be provided by the project – Complete site location investigations required to
defining any interdependencies with off project work and Define the location for the studies, and develop a firm meet accuracy
clearly defining the battery limits for the project. project facilities, i.e. the view of the project site and requirements for this
• Location, regional and country factors impacting the project project site is often site ownership for the phase, and incorporated
• Climatic data assumed. project. into the project definition.
• Project, land, resource and technology ownership
Conceptually understand Define a sound business Understand the land,
• Intended execution approach from the previous phase the preliminary views of the case to support FEL3 resource and technology
• Project development history business drivers that will investigations. ownership, and include
• Business environment support a project of this Complete reviews from strategies for acquisition in
type. FEL1, and incorporate the project definition.
• Strategic case for the project
outstanding work items into
• Incoming business case, i.e. markets, revenue, industry Define known project the FEL2 work plans. Define a firm business case
structures and financial performance required of the project constraints. on which to support an
• Summary of any reviews completed to date and actions investment decision to
arising implement the project.
• Constraints and dependencies
Make clear statements of
outstanding FEL phase
work at the phase end, and
define specific express risk
mitigations required in
FEL4 to cover the scope
definition, cost estimates,
schedule and execution
plan.
2. Exploration Define the: Assemble initial information Provide advanced Provide detailed
Results and • Geological context for the orebody, including the type of that, by the end of a FEL1 information that, by the end information that, by the end
Geological deposit study, would support at of a FEL2 study, would of a FEL3 study, would
Context and least a NI43-101, JORC, or support a NI43-101, JORC, support a NI43-101, JORC,
• Topography and survey, including the overall site grid(s)
Background SAMREC Inferred mineral or SAMREC mineral or SAMREC mineral
• Exploration work undertaken to date resource classification inventory, at least at an resources and mineral
• Drilling programs undertaken and their results, including in- suitable for a preliminary Indicated resource level. reserves, at least at
progress or planned work economic assessment, (or Measured resource and
• Core data, drilling method, recovery and sampling techniques similar), report. Complete advanced Probable reserve levels.
geology, topography,
• Data collected, including: Complete outline regional hydrology, exploration and Complete detailed
♦ drilling spatial and survey data geology, topography and interpretation work, topography, hydrology,

FEL Overview

♦ such data as geological, lithological, structural, exploration work, (including (including QA/QC). Provide geology, structures
mineralogical and chemical of the mineralized zones and QA/QC). Provide a clear a clear advanced features, geomechanical
host rock mass preliminary understanding understanding of the assessment, exploration
♦ hydrogeological of the topography, geology, topography, hydrology, and interpretation work,
♦ geophysical mineralogy and geology, mineralogy, and (including QA/QC). Provide
♦ geotechnical (for surface facilities) mineralization continuity on mineralization continuity a clear detailed
♦ geomechanical (for underground or open-pit mining a deposit-domain scale. with identification of understanding of the
facilities) deleterious components. topography, hydrology,
♦ deleterious component distribution(s) Identify key technical Develop and apply the geology, mineralogy and
♦ overall bulk density issues requiring additional initial structural mineralization continuity
♦ quality of waste rock for use as aggregates for concrete subsequent studies, interpretations and with assessment of
production in construction including sampling for geomechanical domaining. deletrious components.
• Assay and test work methods and data metallurgical
characterization and Provide an advanced block Provide an finalized block
• Core data and assay quality control measures applied testing, site geomechanical model. model.
• Data verification protocols applied in preparation of the data collection and Acid
geological block model Rock Drainage (ARD). Identify technical issues Limit technical issues
• Deposit geology. requiring follow-up study in requiring follow up in
subsequent studies, subsequent work to those
Create the geological block model and supporting data, including including additional that do not materially
spatial distribution of the mineral inventory by volume, tonnes and sampling for metallurgical impact the understanding of
grade that extend beyond the expected mining volume into host characterization and the deposit.
rock, along with known or interpreted structural features. testing, additional site
geomechanical data
See National Instrument (NI) 43-101 and/or Joint Ore Reserves collection and ARD.
Committee (JORC) and/or South African Code for Reporting of
Exploration Results (SAMREC) for additional guidance for the
respective level of study.
Data assessment should be to a level to allow:

• Preparation of flow sheets
• Assessment of environmental impacts of mineralized material
and waste
• Definition of overall variability of the deposit parameters that
would affect the economic, environmental, health and safety,
or site closure on a project wide basis.

FEL Overview

3. Mineral Resources Resource and reserve reporting is usually governed by Aim to have at least an Aim to have at least an Aim to have mainly mineral
and Mineral internationally recognized codes and standards, e.g. JORC, NI43- Inferred resource quality indicated resource quality reserves, with some
Reserves 101, SAMREC and others. Publicly listed companies are required inventory by the end of inventory by the end of mineral resource inventory
to report against one or more of these codes. Data prepared FEL1. FEL2. by the end of FEL3.
should be of a level that would allow its use for public disclosure,
even if this is not planned. Conduct a preliminary Resources – assess the Reserves– assess the
assessment of the overall majority of the deposit as majority of the deposit as
The premise underlying all codes is as follows: deposit content and Indicated, possibly with proven and probable
continuity to build an initial some Measured. reserves, with some
• Resources – a reasonable prospect for economic extraction of block model, which measured or indicated
mineral deposit, considering that the location, quantity, grade, includes deposit grade Reserves – if defined resources.
geological characteristics and continuity of a mineral resource tonnage curves and clear should reflect the majority
are known, estimated or interpreted from specific geological identification of any cut-off of the reserve quantities Reserves – use care when
evidence and knowledge. grade issues. being categorized as reporting reserves –
probable or higher. Use depending on the reporting
• Reserve – the economically mineable part of a measured or care when reporting authority requirements, the
indicated mineral resource demonstrated by at least a reserves – depending on reserve estimation might
prefeasibility study, including adequate information on mining, the reporting authority require completing a full
processing, metallurgical, economic and other relevant requirements, the reserve feasibility study (FEL3).
factors. These factors demonstrate, at the time of reporting, estimation might require
that economic extraction can be justified, and includes diluting completing a full feasibility The prevailing reporting
materials and allowances for losses that might occur when the study (FEL3), or at least a code, defines the specific
material is mined. full prefeasibility study requirements for classifying
(FEL2). materials for estimating
• Preparation of resource and reserve statements requires input purposes.
and statement approval by “competent persons” defined by Define, in the prevailing
the codes and standards. Hatch requires senior management reporting code, the specific
input before accepting assignments to act as a qualified requirements for classifying
person. materials.
Preparing a resource and reserve estimate is governed by the

prevailing code or standard.
The key to this work of preparing resource and reserve estimates
is that metallurgical and extraction work required to form a
saleable product is an output of the project.
An integral part of resource and reserve definition activities are:
• Preliminary mine design
• Process test work
• Process definition
• Marketing
• Other project studies.

FEL Overview

4. Mining Define the: Identify viable options to be Define the mine design Define the mine design
• Mine design criteria investigated at the next based on: based on:
stage of study related to: • Preliminary mining • Refined mine access
• Mine access and arrangement – ramp or shaft (if a shaft is
required, a preliminary size and configuration, hoisting • Mine access layouts for either open • Mining methods
system, and headframe need definition) • Mining methods pits or underground
• Production rates
• Final mining method(s) • Production rates • Vendor catalogues
• Ore and waste handling
• Sequence of development and production, accounting for key • Ore and waste handling • Available regional data
• Mine ventilation
deleterious elements • Mine ventilation • Benchmark mining (including cooling)
• Mining capacity and rate (including cooling) productivity
• Backfill
assessments
• Cut-off grade(s) • Backfill • Other key site-specific
• Preliminary layouts
• Preliminary mining losses and dilution values, which must be • Other key site-specific systems or aspects,
showing all WBS
identified and finalized for declaration of reserves systems or aspects, such as:
elements and sub-
• Run-of-mine tonnage and head grade(s) over the duration of such as: ♦ dewatering
facilities.
the project broken down into periods suitable for process plant ♦ dewatering ♦ water treatment
definition ♦ water treatment Primarily base mining costs ♦ mine power
• Development and operating requirements, including a ♦ mine power on project specific cost ♦ components of the
preliminary mobile fleet and maintenance approach ♦ major components estimates, as opposed to mining fleet
of the mining fleet costing from similar ♦ maintenance
• Preliminary main ventilation and cooling network and ♦ maintenance approach and
deposits.
associated major installations approach facilities
• Preliminary ground-support methods ♦ metallurgical Provide cost estimates, ♦ metallurgical
• Preliminary backfill plant and underground network dewatering process based on benchmark data process
preliminary configuration and capabilities considerations. and preliminary vendor considerations.
• Preliminary power distribution network Provide an initial estimation information.
of mine production rates, Provide:
• Ore and waste handling networks to the processing plant, Provide a clearly defined
the mineable resource • Refined mine
including sizing and in-line storage bases of design for all
(using simple economic production rates
• Mining support infrastructure and services for underground parameters or systems and activities.
• Mining extraction using
and surface, e.g. magazines, refuge stations, shops and assumptions), and mining economic parameters
communications and dispatch sequence at a block or Provide preliminary life-of-
mine annual schedules for • Mining sequence at a
• Waste disposal method and storage location shell level.
development, and stope grouping or
• Ore treatment, if prior to processing plant development bench level.
Provide potential mine, production should be based
• Project capital and ongoing sustaining capital costs typical layout-sketch on typical project mining
• Mine closure cost estimate configurations, and high- activities established using Provide refined mine
3D design. layouts, and a life-of-mine
• Mine operating cost estimate, including preliminary labor level life-of-mine schedules
schedule by year for
counts. for development and
Provide sketches of mine development and
production.
services backbone production.
networks.

FEL Overview

Outline staffing and Provide a refined staffing
approach philosophies for approach and counts for
the project, including the project, including
operations and mine- operations and mine-
closure periods, and define closure periods using pre-
the boundaries between defined boundaries
them. between them.
Provide mine costing and Provide mine costing and

performance, based on performance, based on
similar operations. site-specific parameters at
the activity level (broken
down into labor, materials
and equipment) with a
project-specific breakdown
for key items, such as
power and diesel.
5. Process Definition Define the: Conduct preliminary bench- Complete a robust program Complete pilot-scale test
• Test work programs to be undertaken in the phase to scale test work, which of test work to support thework programs, and use
generate sufficient information to uniquely characterize the underpins development of definition of the process data to develop a frozen
processing route of the preferred processing option. Test work the process design, mass design criteria, flow sheetprocess definition for the
should be based on representative samples of materials to be and energy balance. and mass and energy project, including for:
produced from the mine, when mined according to the Typically, complete test balance. • Mass and energy
methods and schedule contained in this phase report. work on preliminary balance
samples. Define operating and
• Plant capacity after consideration of availability and reliability design flows, and size • Process flow diagrams,
analyses. Develop draft process process equipment for each with full definition of
• Process design criteria, based on the results of test work design criteria, based on option to suit. nominal, design duties
programs undertaken. experience. and minimum flow
Complete Level 2 Hazard duties.
• Process flow diagrams.
Complete Level 1 Hazard studies.
• Piping and instrumentation diagrams. Define and quantify all
studies.
• Mass and energy balances. Provide a final draft of process streams
• Water balances. Complete technology trade- process flow diagrams and
off studies, and select attendant data tables for Freeze mass and energy
technology routes for the the selected option, ready balances for execution
project. for confirmation in FEL3.
Freeze P&ID drawings,
Develop Block Diagrams Develop P&ID drawings, ready for detail design.
and mass balances for and define major lines and
Complete Level 3 Hazard
each option. control functionality.
studies.

FEL Overview
Develop preliminary Freeze process equipment

process flow diagrams for list and equipment sizing.
the base case.
Ensure the process
Complete preliminary description is detailed and
capacity studies. complete, to provide a
baseline for completing the
Define product streams and detailed engineering design
specifications. in FEL4.
P&ID development is not
required for FEL1.
6. Engineering Define the: Develop the design criteria Provide draft or preliminary Develop detailed design
Development • Engineering criteria to be applied to the scope development from standard industry design criteria and criteria for all disciplines
practices, internal Hatch standards. contributing to the project,
• Outcomes of the project value analyses.
documents and criteria and ensure design criteria
used for similar projects in Define the value are reflected in calculations
Implement value improving practices that are demonstrably
similar environments. engineering opportunities and engineering definition
applied to the project scope.
(Criteria have not been for FEL3. (The output of for the project completed
customized to suit the value improving practices is for this phase. (Design
project at this stage.) evident in the development criteria from this phase
of the project scope and form the baseline design
Define the: delivery tools.) criteria for FEL4. Little
• Scope of value further development of
improving practices to design criteria is expected
be applied to the project in FEL4.)
Complete value improving
• Potential for these
practices (VIPs), and reflect
practices to improve the
outcomes in the final
business case in
definition. (Ongoing
subsequent FEL phases
implementation of VIPs is
evident in the PEP, e.g. use
• Value engineering
of design tools).
opportunities for
examination in FEL2.

FEL Overview

7. Project Layout Develop project layouts to reflect the placement of major Develop the conceptual Develop the preliminary Freeze the site selection,
equipment and for all WBS elements. Work definition should align layouts for each option, engineering and layouts for plot plan and project layout.
with the development of frozen arrangements for the complete relying on benchmark and each project option.
project scope. public domain data. Define the WBS to a
(Typically, arrangements Freeze the project location system level and, for
Develop the WBS for the complete project, including the: will show facility blocks to and plot plan. complex projects, to a
• Mine enable overall site layout, subsystem level.
roads and utility corridors to Define the major equipment
• Process plant and all WBS element Place all equipment
be defined.)
• On-plot site development and infrastructure locations. according to reasonably
• Off-plot site development and infrastructure. Use the conceptual project expected equipment sizes,
locations to define the Define the WBS to a facility and ensure the
Define the: project scope. level. configuration is supported
• Topography and survey, including the overall site grid(s) by vendor data.
Define the WBS to an area Provide preliminary
• Battery limits for the project under study level. facilities descriptions. Freeze the general
• Interface conditions for any material flow, service, utility and arrangements for
such crossing the battery limits Start a facilities description. Define the functionality equipment layout and
• Responsibility for providing the services, materials and other required of the WBS facility, and get approval
items crossing the battery limits. Complete the conceptual elements, the major from the client. Ensure
battery limit locations and equipment and the layout considers all
Prepare the conceptual design or specification of each project quantification. expected operating mode. elements of the PEP for
option and inputs, including the conceptual site plans, general example modularization.
arrangements and layouts. Form a preliminary view of Define and quantify
tie-in requirements and services, utilities and other Ensure the mechanical
plant shutdown things crossing the battery equipment list is
requirements. limits. Define preliminary approaching frozen,
locations for all ingoing and pending the receipt of
outgoing connections. vendor information from
Identify major tie-ins, and FEL4.
strategies for
implementation. Uniquely define all tie-ins
and cross battery-limit
services, process and
utilities, and freeze their
scope. Get client approval
for an execution plan for
tie-in work.

FEL Overview

8. Process Plant Undertake engineering to define the physical implementation of Complete project definition Complete project definition Complete project definition
the process plant, including: to a conceptual level, with to a preliminary status, with to a final status, ensure it is
• Align the engineering design with proposed execution strategy detailed requirements to detailed requirements to ready for detailed design
support the study defined in support the study defined in and it fully defines the plant
• Select and specify equipment
the gate review checklist. the gate review checklist. to be built. Provide the
• Select and specify materials detailed requirements to
• Define material and equipment supply sources support the study, which
• Select and specify a control system are defined in the gate
review checklist.
• Prepare process plant arrangements
• Quantify materials and equipment requirements
• Prepare a facilities description.
9. Site Development Undertake engineering to define the physical elements of site Complete the project Complete the Complete the project
and Infrastructure development and the on and off plot infrastructure within the definition to a conceptual documentation to a definition to a final status,
project battery limits. level, with detailed preliminary status, with ensure it is ready for
Definition of construction infrastructure is required for the requirements to support the detailed requirements to detailed design and it fully
construction phase of the project which allows. study defined in the Gate support the study defined in defines the facilities to be
Review Checklist. the Gate Review Checklist. built. Provide the detailed
• Alignment the engineering design with the proposed PEP
requirements to support the
• Selection and specification of equipment study, which are defined in
• Selection and specification of materials the Gate Review Checklist.
• Definition of material and equipment supply sources
• Selection and specification of a control system
• Preparation of infrastructure arrangements
• Quantification of materials and equipment requirements
• Preparation of a facilities description
10. Business Define and quantify: Provide a preliminary Provide a definition of Provide a detailed
4
Systems • The business systems required for project operation, e.g. assessment of business- business-system business-systems plan,
office systems, document management, accounting, finance, system requirements; in requirements. specifying the type of
maintenance, procurement and communications particular, unique systems, interfaces,
requirements. Develop a preliminary training and maintenance
• The software, hardware, firmware and work systems required business-systems plan, needs.
for project operation and integration into the client’s business addressing technical-
• How the project systems will interface with those of the client system requirements and
organization business processes.
• The work to set up and initialize the business systems
4
Systems to control the mining, process plant and attendant infrastructure should be defined as part of the definition of the scope of their associated WBS element. This item refers to
systems essential for integrating the project within the client’s business, or to provide systems for the client to manage a business based on this project.

FEL Overview

11. Project Define a schedule to reflect the: Provide a Level 1 project Develop a Level 2 project Develop a Level 3 project
Schedule • Preliminary bid packaging aligned to the PEP, including schedule, which shows for schedule for the FEL4 schedule for the FEL4
construction contracts each option: Execution Phase for each Phase, that:
• The established option. • Is resource loaded
• Long-lead equipment and material procurement durations that
have been derived from budget quotes and are reflected in the milestones and goals based on the FEL3
for the project Develop a Level 3 schedule Capital estimate
schedule for FEL3 Phase 6.
• The duration of the manpower
• Lead times on other packages derived from quotes or industry
major phases of the requirements
benchmark Prepare a basis of
project, which are schedule to document the • Is aligned with
• Construction durations derived from benchmark data for
logically connected data and assumptions packaging and
similar work adjusted to cater for macro labor productivity and
together and sequenced underpinning the schedule contracting structures
regional conditions
into: development. • Is able to be produced
• Breakdown of work into disciplines driving and feeding from ♦ FEL2 to match the WBS
the procurement and construction contracts ♦ FEL3 • Represents all project
• Key milestones for items such as: ♦ FEL4, including: disciplines
♦ Approval milestones and project finance, and review  area-based • Reflects completion of
external approval milestones that drive project progress summary CWPs.
♦ Completion of any outstanding field investigations and  engineering
test-work programs Prepare the basis of
 procurement schedule to document the
♦ Work and services to be completed by others to enable
project completion  construction data and assumptions
♦ Other milestones that might impede project progress  ramp-up. underpinning the schedule
♦ Project review and approval. development.
Prepare a Level 2 5
• Preliminary commissioning durations for the process plant, schedule for the FEL2
mine, on-plot infrastructure and off-plot infrastructure. phase.
Identify progress reviews, and allow time for feedback on any
conceptual alternative and its impact on the cost and schedule. Prepare the basis of
schedule to document the
data and assumptions
underpinning the schedule
development.
5
Refer to PLP-610-020-0001 – Project Planning and Scheduling Discipline Guide
6
Refer to PLP-610-020-0001 – Project Planning and Scheduling Discipline Guide

FEL Overview

12. Capital Cost Define the: Provide a Hatch Level 1 or Provide a Hatch Level 2 or Provide a Hatch Level 3 or
7 8
Estimate , • Material and equipment quantities required for construction of AACE Class 4 or 5 cost AACE Class 3 capital cost AACE Class 2 capital cost
the project for: estimate, supported by a estimate for each option, estimate, supported by a
detailed basis of estimate supported by a detailed detailed basis of estimate
♦ On plot – mine
document and attendant basis of estimate document document and attendant
♦ On plot – process plant
back up materials and attendant back up backup materials
♦ On plot – site development and infrastructure
supporting the estimate. materials supporting the supporting the estimate.
♦ Off plot – site development and infrastructure.
(The estimate is usually estimate. The estimate is
• Where options are carried to phase completion estimates based on historical and underpinned by:
should be provided for all surviving options at the completion benchmark data factored to
of the phase with clear definition of which option is the base • Substantial engineering
suit, project location, scope
case. definition for the project,
and time frame.)
up to 40% of the total
• Budget prices for major equipment supply sourced from engineering effort
multiple vendors
• Quantity take-offs
• Project indirect costs for:
• Vendor quotes
♦ Client’s cost
♦ EPCM services cost • Realistic assessment of
♦ Escalation – if it is in scope expected construction
♦ Risk provisions unit cost and
♦ Contingency. productivity
• A robust PEP defining
the contracting,
packaging and
management strategies
for the project.
13. Human Define the: Develop a preliminary Develop a human Develop a human
Resources • Human resources (HR) and operational strategy (e.g. degree human resources strategy resources strategic plan, resources plan as part of
of local expertise and training) for all project phases, based on specific the PEP, based on fully
considering the country’s requirements of the project understood project
• Staffing requirements for the project during execution and
labor laws, and including and on an evaluation of requirements, resources,
when operational (which is an input to OPEX), including:
high-level organization local conditions and the and risks and issues.
♦ Organization chart charts, preliminary impact on the project and
♦ Head count, employment, training and a operations. Develop a detailed
♦ Work rosters. recruitment strategy. organizational model for
Develop an organization execution, start-up and
• Staff recruitment strategy
model or charts for the operations.
• Remuneration scheme (which is an input to OPEX) feasibility study, execution,
start-up and operations.
7
Refer to PLP-620-020-0001 – Project Capital Cost Estimate Discipline Guide
8
When estimates for mine developments are prepared, agreement should be reached with the client on how to define project capital (i.e. the capital required typically for funding or
finance) versus sustaining capital. The sum of these two items is usually the life-of-mine capital cost. Accuracy provisions for the study phase should apply to the project capital only.

FEL Overview

• Employee relations, including: Develop employment, Develop a detailed plan
strategy recruitment, training and and policies for
requirements engagement strategies, employment, recruiting and
considering local, national training, including full
• Requirements for local hiring and engagement of local
and expatriate resources. workforce composition,
personnel
sources of labor,
• Legislative and regulatory context for the workforce compensation and benefits.
• Training requirements for operations and maintenance staff,
including:
♦ Development of operating, maintenance and safety
procedures and systems
♦ Staff training program costs.
14. Operating Define the: Develop an operating cost Develop an operating cost Develop an operating cost
Cost Estimate • Basis for the estimate estimate for options estimate for options estimate, broken down
considered for a typical considered, broken down monthly, for a designated
• Composition of the annual operating cost estimate, i.e. what is
year at steady state. annually to match the period to match the
contained within the operating cost estimate
production schedule and production schedule and
• Sources of quantity data Factor the preliminary any step changes in inputs any anticipated changes in
• Sources of cost data including, where appropriate, budget operating costs, based on to the operating cost inputs to the operating cost
supply quotes parametric models, estimate (e.g. if the power estimate.
allowances, benchmarked price changes after the first
• Project facility scope to ensure back-to-back alignment for the
data and preliminary five years of operation). Provide detailed fixed and
supply of reagents and materials and the scope of facilities
assessments of reagent variable operating costs,
contained within the capital cost estimate, e.g. if a reagent is Ensure the fixed and
and utility consumption. based on operating
supplied in a tanker truck, ensure facilities are provided for off- variable operating costs are parameters defined in the
loading based on operating
Ensure the expected study, vendor data, firm
• Data date. accuracy of the operating parameters defined in the quotes, estimated
cost estimate is in the range study, vendor data, budget consumptions and unit
of: quotes and benchmarked rates.
• Low: -15% to -30% data. (Operating costs are
un-escalated, and a Use the detailed basis of
• High: +20% to +50% contingency might be estimate outlining the base
included.) for the quantity drivers, unit
costs, exchange rates,
Use the basis of estimate growth provisions,
outlining the base for the escalation and other
quantity drivers and costs to variables, to define the
define the operating cost. operating cost.
Identify a summary of risks Conduct a quantitative risk
and opportunities, and analysis on operating costs
report mitigation activities in to determine the
the risk register.

FEL Overview

contingency. Identify the
Ensure the expected risks and opportunities, and
accuracy range of the report mitigation activities
operating cost estimate is in the risk register.
the range of:
• Low: -10% to -20% Ensure the expected
• High: +10% to +30% accuracy range of the
operating cost estimate is in
the range of:
• Low: -5% to -15%
• High: +5% to +15%
15. Market Define the: Identify primary product(s). Provide a preliminary Provide a customized
Analysis • Market conditions underpinning the demand for the final analysis defining markets, analysis defining markets,
Assess potential markets, supply and demand and the industry outlook,
product from the project, or the downstream product produced
distribution and potential off-takers and/or downstream and end-user
by the client from the project production, including the:
transportation. customers for product(s). customers for products with
♦ Demand forecast
specific characteristics
♦ Supply forecast Define potential economic Develop an indicative price (product type, quality and
♦ Competitor analysis, including an assessment of their options for product volume, forecast, based on a supply other specifications). Define
responses to this project specification and prices. and demand analysis for the detailed marketing and
♦ Marketing strategy product(s).
Possibly identify potential sales strategy.
♦ Pricing strategy
• Contractual obligations that might arise as a consequence of partners, off-takers and/or Develop a price forecast,
Identify potential
project development, e.g. agency agreements and off-take customers. distribution channels, based on a supply and
agreements shipping methods and demand analysis for
Develop an indicative price
• Specific downstream treatment and upgrading requirements costs. product(s).
forecast, based on
• Product packaging and shipping requirements, including any consensus projections and Identify negotiated and
warehousing or stockpiling required to support the market and publicly available data. documented off-take and
the transport logistics for delivery to the final customer agency agreements.
• Revenue stream (versus time) from the project’s product(s) Define a preliminary
assessment of markets for Define distribution
• Level of detailed analysis required in the early phases, which potential co-products. channels, a shipping
will depend on the level of commoditization of the products method, route and costs.
Note that a customized value-in-use analysis might be required
for unique product(s) (such as uniquely/high/low grades,
impurities, size and hardness).

FEL Overview

16. Legal and Define the : Assess the political, Evaluate the country and Conduct a detailed
Commercial • Legal and commercial elements impacting the project regulatory and socio- regional economies and evaluation of the country
economic environment of impacts. and regional economies
• Permits, licenses, agreements and contracts (other than
the country and region. and impacts.
procurement and construction) required to enable the project Conduct initial applications
to be developed Understand the process for and negotiations for Finalize legal agreements
• Contractual relationships created by way of completion of the exploration, appropriate permitting and approvals. on rights and land access,
study, e.g. a piece of equipment might be supplied on an EPC land access and mineral and complete applications
basis that is subject to a firm bid with a defined expiry period. rights granted, permitting Investigate the tax and duty for all major permits and
This section should highlight such agreements and the expiry and approval. regime, and conduct initial construction licenses.
of the offer. negotiations on royalty and Determine if approvals from
• Status and content of the legal register definition that should Conduct a preliminary tax stabilization governing bodies are
be reported assessment of the tax agreements. required before the next
regime, royalty and duty, stage gate review, or for
• Technology agreements, licensing requirements and such Conduct initial negotiations
based on comparable board approval.
like, required for project development and operation of ownership and
operations (country,
• Land and resource ownership and acquisition cost and industry or product). participation agreements, Complete an assessment
process, which are particularly relevant where “native title” and develop an approach of tax, fiduciary and duty
might exist Identify potential ownership for mitigating risks. implications, and final
• Taxation regime of the host country structures, considering royalty and tax stabilization
business, ore-deposit rights Investigate typical terms agreements.
• Foreign exchange controls of fund repatriation constraints that
and royalties, land and contract structures,
are applicable to the project
ownership, intellectual based on industry best Complete ownership and
• Intellectual property ownership and access processes, if property, joint venture and practices. participation agreements.
required. government interests.
Finalize major contracts,
Make assumptions on including those for major
commercial contract terms, inputs, detailed off-take
based on comparable agreements and contracts
operations and local to market product.
conditions, if known.

FEL Overview

17. Health, Define the: Prepare a desktop study of Start and progress the Finalize the ESIA and
Safety, • Data and analyses outcomes to enable preparation of an potential environmental environmental and submit it for approval to the
Environment, Environmental and Social Impact Assessment (ESIA) impacts to identify process community impact field- governing authority to grant
Sustainability and fatal flaws per option. data collection processes. the environmental project
• ESIA statement
and certificate.
Community • Health, safety environmental and community (HSEC) and
sustainability policy for the project Set the project objectives, Define the standards and
Interface
which include HSEC and criteria to be adopted for Secure permits on the
• Key performance indicators and design criteria for sustainability key project development. register, and make timely
Environmental Sustainability and Community Interface performance indicators. applications.
(ES&CI) outcomes and performance.
Define all waste streams
• Status of the permitting process and outcomes that drive
Establish a high-level and discharges, and align Define a high-level
project definition
HSEC policy and them with the process environmental
• ES&CI risks and opportunities included in the risks and sustainability policy for the definition. management plan.
opportunities register project.
• Procedures, management and monitoring plans that pertain to Clearly define stakeholder Continue public
HSEC to be adopted in construction and operation of the Map stakeholders. impacts of project participation, and finalize
project, including the: implementation, and begin the influx management
♦ HSEC monitoring plan public consultation. plan.
♦ Project closure plan Start collecting baseline
♦ Stakeholder mapping and planned engagement environmental data.
♦ Appropriate signed understandings and benefit Firm up permitting Have in place benefit
agreements with communities. processes, requirements agreements with
and timelines. communities.
Define in a draft the health

and safety regulations and
requirements.
Draft a local labor analysis

and influx management
plan.
Negotiate a memorandum
of understanding with the
communities.

FEL Overview

18. Sustainable HOLD HOLD HOLD HOLD
Development
19. Financial This section demonstrates the financial viability of the project and Conduct a discounted cash Conduct a DCF analysis to Use the DCF analysis to
Analysis and provides the framework for evaluating options from a financial flow (DCF) analysis evaluate alternatives and demonstrate the viability of
Evaluation perspective. Within this section the basis for the model should be (recommended) to support the potential viability of the the project.
defined, including all assumptions used to develop the model and the business case to selected option.
the accounting principles to be used in assessing taxation and proceed. Model the selected FEL3
depreciation. project configuration, based
Model the selected project
Conduct an analysis of configuration options, on detailed assumptions
Supply the client team with necessary project details required to multiple project based on preliminary that include:
prepare the business case, or prepare the business case on configuration options, assumptions that include: • FEL3-level capital cost
behalf of the client. based on the following • FEL2-level capital cost and schedule
parametric inputs: and schedule • FEL3-level production
• FEL1 level capital cost • FEL2-level production rates and operating
and schedule rates and operating costs
• FEL1 level production costs • Product price
rates and operating • Product pricing from projections from the
costs secondary sources from FEL3 market analysis
• Indicative product a FEL2-level market • Detailed taxes and
pricing from FEL1 level analysis royalties with support of
market analysis • Project-level discount tax experts
• Simplified taxes and rate, based on high- • Project-level discount
royalties, or pre-tax level financing rate, supported by the
assessment assumptions client’s financing plan,
• Project-level discount • Simplified taxes and project risk assessment
rate (benchmarked). royalties. and project’s weighted
average cost of capital.
Provide a report on Conduct a sensitivity Develop a scenario
methodology, assumptions analysis on major variables analysis to support decision
and the results of the (price, CAPEX, OPEX and making.
analysis. exchange rates).
Conduct a sensitivity
analysis on major variables,
Report on methodology, and specific drivers of the
assumptions and the project (e.g. price, CAPEX,
results of the analysis. OPEX key consumables
prices and labor rates).
Report on methodology,
assumptions and the
results of the analysis.

FEL Overview

20. Project Risks Define the: Complete a hazard Complete a hazard Complete the preliminary
Management • Overall plan used for managing risks during the phase, Study 1. Study 2. Hazard Study 3.
(Risks and including the:
Opportunities) Complete a conceptual Complete a preliminary Start the quantitative
♦ Impact and likelihood rating scales, impact and likelihood hazardous area
hazardous area technical risk studies.
matrix and levels of threat and opportunity classification classification.
♦ Major activities completed (qualitative project and Start the process functional
technical risk workshops, and threat mitigation and Start a technical risk Update the technical risk
register. safety life-cycle studies for:
opportunity enhancement activities) register.
♦ Overall risk management processes used • Control system Hazard
Complete a conceptual Complete a prefeasibility and operability studies
• Threats identified and mitigation actions taken during the qualitative project-risk qualitative project risk
phase to reduce the impact, likelihood or both, of risks • Layer of protection
workshop. workshop, considering analysis
• Opportunities identified and enhancement actions taken project risks covering:
during the phase to increase the impact, likelihood or both, of Start a project risk register. • Safety-integrity level
• Safety determination
risks
• Environment • Alarm management
• Metrics used during the phase to assess the effectiveness of
• Technical review
threat mitigation and opportunity enhancement actions
• Scope
• Risk management processes and strategies to be rolled out Complete a preliminary
during subsequent phases of the project for any residual risks • Procurement
Hazard Study 4
remaining at the end of this project phase • Construction (construction Hazard
• Project improvement opportunities (FEL3 excluded) for further • Schedule study).
project development work • Cost
Complete the preliminary
Update the project risk Hazard Study 5
register. (commissioning Hazard
study).
Complete a quantitative
project risk workshop for: Finalize the Hazardous
• Capital cost area classification.
• Schedule
Update the technical risk
• Event or Project Risk register.
Complete a model of the
Complete the feasibility
project capital cost and
project-risk workshop,
schedule, and establish the
considering project risks
estimate contingency and
covering:
schedule float.
• Safety
Start the program for • Environment
monitoring and controlling • Technical
threats and opportunities. • Scope

FEL Overview

• Procurement
• Construction
• Schedule
• Cost
Update the project risk

register.
Complete a quantitative
project-risk workshop for:
• Capital cost
• Schedule
• Event or Project Risk
Complete the model of the

project capital cost and
schedule, and establish the
estimate contingency and
schedule float.
Fully put in place the

program for monitoring and
controlling threats and
opportunities.
21. Execution The PEP: PEP not started. PEP Part A – Decide on the Fully develop and detail
9
Plan • Defines the strategies and work plans to be implemented project definition, execution PEP Part A, B and C, and
during FEL4 execution phase strategy and approach. Set get approval from the client.
the WBS (area and sub-
• Provides the baselines against which progress against the Review completeness of
area).
defined strategies and work plans is assessed PEP Part A.
Agree on the contracting
The PEP is expected to be the baseline document that defines
and packaging approach Approvals from the client
the project in sufficient detail for project control in FEL4. The PEP
for major contracts and for Part B (the FEPs) and
has the following elements:
equipment. If it is critical to ensure the FEPs are ready
• Part A – Project Definition and Execution Strategies the overall execution for use.
This section provides the project executive summary and the approach that is relevant to
manner of its implementation. It provides specific direction on Part B, map out those Finalize baseline data in
the project execution methodology, and includes: sections of Part B critical to Part C, but baselines are
the project not extracted,
♦ project overview
9
Refer to PLP- 103-020-0004 – Process Guide – Project Execution Plan

FEL Overview

♦ project context e.g. environmental i.e.:
♦ location permitting. • WBSs are defined
♦ scope of services to be provided to manage the project
♦ scope of facilities – detailed sufficiently to manage scope PEP Part B – The outline is • Project schedule is
generally not started. mapped to the WBS
change in FEL4
However, develop a • Capital cost estimate is
♦ battery limits
♦ authorities and delegations for both the client and the function of discipline that finalized?
has the ability to present a
EPCM • Procurement and
major cost impact, or fatal
♦ project objectives contracting plan is
♦ project delivery strategies. flaw to the project.
finalized?
PEP Part C (control • Project organization is
These strategies define precisely, at a management level, the final.
baselines) – Populate it
methodologies to be applied to the project execution, having
with summary data
regard to scope, location, client objectives, project objectives,
produced from this study.
risks and schedule. These strategies define the work scope for
the project functions, which will deliver the project and,
ultimately, the scope of work, work plans, cost estimate and
schedule for the project functions (refer to the functional
execution plans below).
• Part B – Functional Execution Plans
These sections are used to develop the execution strategies
for the project functions and disciplines, and develop their
resource plans, service cost estimates, schedule, work plans
and deliverables to align with the overall project execution
strategies that are defined in Part A. A separate plan is
required for each function and discipline. Following are the
separate functional execution plans (FEPs) – B1 to B15 –
along with the required summary content for all FEPs.
Functional Execution Plan Content for Each FEP
(FEP) Summary
B1 –Health and Safety • Functional execution

Management strategies cascaded
B2 – Environment, down from the project
Sustainability and Community strategies in Part A
Interface Management • Deviations from the
Project LifeCycle Plan
B3 – Quality Management
(PLP) processes and
B4 – Risk Management practices
B5 – Engineering Management • Schedule – Level 3
B6 – Procurement and and Level 4 for each
function or discipline

FEL Overview

Materials Management • Organization design for
B7 – Construction Management the function or
B8 – Commissioning discipline
Management • Resource
B9 – Project Controls requirements, including:
Management resource plan – people
B10 – Project Services (personnel plan)
Management resource plan –
equipment and
B11 – Prime Contract
materials for this
Management
function to do their
B12 – Document Management work
B13 – Project Systems training plan
Management • Systems and tools
B14 – Project Human requirements
Resources Management • Functional quality
B15 – Project Facilities management plan
Management • Functional procedure
requirements (note this
is not the actual
procedures, which
reside in a separate
project procedures
manual developed
during setup)
• Function setup
requirements
• Part C – Control Baselines
Data developed within the function execution plans is to be
rolled up to provide project-level baselines, against which the
project will be controlled during execution.
The elements of Part C are:
Scope, including:
♦ Facilities description
♦ Organization charts
♦ Procurement plan, contracting plan and package
dictionaries
♦ Project WBS
Schedule, including:

FEL Overview

• Project milestones
• Project schedule, including:
♦ Level 1, 2, 3 and 4 mapped to the Facility Breakdown
Structure (FBS) and Package Breakdown Structure (PBS)
♦ Critical path schedules – Levels 1, 2, 3 and 4
♦ Construction personnel histogram
♦ Hatch services personnel histogram
♦ Baseline project progress curves
♦ Cost – project budget.
22. Operations TBA
Assurance


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Process Guide

DATE REV. STATUS PREPARED BY CHECKED BY APPROVED BY APPROVED BY

Project LifeCycle Process

1.1 Project LifeCycle Process ............................................................................................................. 1

4. Project Process Description.............................................................................................................. 12

4.1 Study Purpose ............................................................................................................................ 12

5. Responsibilities and Cross-Functional Requirements ................................................................... 35

5.1 Roles and Responsibilities .......................................................................................................... 35

7. Reference Documents ........................................................................................................................ 37

1.1 Project LifeCycle Process

1.1.1 Front End Loading - The Foundation of the PLP

1.1.1.1 FEL Phases Gate Review

Front End Loading Phases

FEL1 FEL2 FEL3 Start-up

Potential for recycle

Figure 1-2: PLP FEL Project Phases

PLP Phase Project Team Goals Gate Review Team Focus

PLP Phase Project Team Goals Gate Review Team Focus

1.1.1.2 Typical FEL Activities

FEL 1 FEL 2 FEL 3 FEL 4

Work the Plan - deliver

Gate 1 review Gate 3 Review Project closure

Figure 1-3: Typical FEL Activities

1.1.1.3 Client Requirements Specification

The decision to proceed with any FEL phase is made on:

• An evaluation of the cost of the FEL phase

1.1.1.4 Gate Reviews

• Reviewing the project outcomes to date

• Confirming their alignment with the project objectives

• Reviewing the viability of the project

1.1.1.5 FEL Sequences

• Improved capital investment effectiveness. Delivery of the required assets (performing as

• Consistent approach to capital project execution across client organizations.

• Standardization and common understanding of terminology.

• Rigorous gate review process with defined deliverables to ensure a comprehensive,

Facility Breakdown Structure (FBS):

Project Management Body of Knowledge (PMBOK):

For additional definitions refer to the Hatch Knowledge Centre Glossary.

4. Project Process Description

Have we defined the right Have we done the right FEL

Figure 4-1: FEL Phase Project Definition

4.1.2 Defining the Right Project

4.1.2.1 Scope Definition

indirect groups and wrap around

Off site – Infrastructure, indirect groups and

Figure 4-2: Complete Project Scope Definition

Figure 4-3: WBS Definition

• On site elements, including:

 Indirect elements, including temporary facilities and construction facilities.

• Off-site elements, including:

 Indirect elements, including temporary facilities and construction facilities.

• Have the most appropriate (globally available) technologies been applied?

• Has the optimal and sustainable capacity been defined?

• What products and to what specification and quantity are to be produced?

• Are optimal sites selected for project development?

• Is the project configuration optimal?

• Is the construction methodology designed to meet the project’s need?

• What are the costs of constructing the proposed project?

• Other questions specific to the project.

4.1.3 Defining the Right Project - FEL Phase Implications

4.1.3.1 FEL1- Concept Study

FEL Phase Objective

4.1.3.1.1 Evaluate Options and Select the Base Case