FIELD MATERIAL CONTROL

PROCEDURE
LG/ OIEC/ IOEC Doc. No. : COM-07-3-PR-0002-0
CONSORTIUM Rev. No. : 0

FIELD MATERIAL CONTROL PROCEDURE

CONTRACT NO. : POGC-760-81-156

PROJECT : SOUTH PARS GAS FIELD DEVELOPMENT

(PHASES 9&10)

COMPANY : NATIONAL IRANIAN OIL COMPANY

SITE : ASSALUYEH, IRAN

0 16/04/2003 Issued for COMPANY Approval

REV. DATE DESCRIPTION PRPD CHKD APPD QA COMPANY

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TABLE OF CONTENTS

1. GENERAL

2. RECEIPT OF MATERIALS

3. STORING

4. MATERIALS ISSUING AND RETURN

5. FIELD MATERIAL CONTROL SYSTEM(COMSITE)

6. ATTACHMENT

a) Attachment # 1 : Material Receiving Report

b) Attachment # 2 : Material Receiving Status Report
c) Attachment # 3 : Overage, Shortage and Damage Report
d) Attachment # 4 : OS&D(Overage, Shortage and Damage) Status Report
e) Attachment # 5 : Material Withdrawal / Return Slip

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1 GENERAL

1.1 Scope

This procedure describes the overall system for receipt on SITE, identification and general
checking of CONTRACTOR ITEMS to be incorporated into WORK for South Pars Gas Field
Development Phases 9 & 10 Project (herein after called ”Project”) to be performed by
LG/OIEC/IOEC Consortium (herein after called “ Contractor”).

1.2 Purpose

The purpose of this document is to define the mechanism for the receipt and verification of
materials as well as storage, handling, issuing, control and preservation requirement that will
be used within this project.

2 RECEIPT OF MATERIALS

CONTRACTOR ITEMS to be incorporated into WORK, will be visually checked internally and
externally and verified on receipt at SITE and later at pre-fabrication facility. For materials
with full traceability requirements, CONTRACTOR will check in accordance with the relevant
project procedure, specifications and standards.

2.1 Unloading of material at SITE

On receipt of Shipping information, CONTRACTOR shall make arrangements for unloading

of material and lifting plan at the estimated time of its arrival at SITE, including provision of
any special unloading/handling equipment.

Materials shall be unloaded into an appropriate “Reception Area” for detailed checking. Any
heavy or oversized item will normally be moved direct to its permanent construction
foundation according to approved Heavy and Critical Lifts studies where full checking is
carried out.

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2.2 Material Overage, Shortage or Damage

Where overage, shortage, or damage of CONTRACTOR ITEMS is discovered at the Material

Receiving and/or Unpacking stage, CONTRACTOR shall prepare an Overage, Shortage and
Damage(OS&D) Report(Attachment #3) up to the level of indicating the quantities of overage,
shortage, and/or damaged items.

The OS&D Report shall be distributed to COMPANY and CONTRACTOR Head Office of
Design/Procurement Department for action.

2.3 Reporting

CONTRACTOR shall produce Material Receiving Report(Attachment #1) and Material

Receiving Status Report(Attachment #2) for CONTRACTOR ITEMS together with
OS&D(Overage, Shortage and Damage) Status Report(Attachment #4).

3 STORING

All CONTRACTOR ITEMS received at WORKSITE shall be stored separately from other
companies’ equipment and materials, in accordance with the suppliers’ recommendation in
the following areas and Material Storage Procedure of CONTRACT DOCUMENTS as
appropriate.

- Outdoor storage on suitably elevated wooden battens

- Covered areas
- Indoor warehouse
- Air conditioned temperature and humidity controlled warehouse

4 MATERIAL ISSUING AND RETURN

4.1 Issuing for CONTRACTOR ITEMS - HOLD

A computer system named "COMSITE (Field Material Control System)" will be used for
material control of the CONTRACTOR ITEMS as well as performed by CONTRACTOR;

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The functions of this system are:

- to issue materials corresponding to the isometric/shop drawings for which the works are
to be commenced,

- to check the availability or non-availability of construction materials for the respective

drawings for which the works are to be commenced,

- to confirm the balance of the stock quantity of materials.

4.2 Return of Issued Materials

Returning of issued Materials may be required, due to mistake in issuing, over-issuing,

cancellation of planned works, etc. In such cases, the form of Material Withdrawal/Return
Slip(Attachment #5) shall be used for returning of issued Materials.

Where previously issued Materials are to be returned to the Warehouse and/or Open Storage
Area(s), SUBCONTRACTOR shall submit the Material Withdrawal/Return Slip by describing
the returned items, and stamping it "Return", with a red stamp.

When Materials are returned, CONTRACTOR shall record the quantities on "Issued
Quantities" of Material Balance Report as negative(-) values.

4.3 Spare parts

Spares are identified by reference to the packing list. Upon detailed checking of a
consignment, spare parts are not only checked against the packing list and Spare Part List
but also completed Material Receiving Report(MRR)/OS&D Forms.

Spare parts are repacked in the VENDOR’S packaging where possible and the package
tagged with the following:

- PO Number
- Item Number

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- Equipment Tag Number where applicable

Spare Parts shall be stored separately in the Warehouse and at Laydown Area.

5 FIELD MATERIAL CONTROL SYSTEM(COMSITE) - HOLD

CONTRACTOR shall be responsible for and shall carry out and maintain throughout the
duration of the CONTRACT a suitable, comprehensive and Field Material Control
System(COMSITE) in accordance with the relevant specifications.

COMSITE is an integrated database system used for the management of direct supplied
materials from their inception through their final use in the field. The design of the system is
based on entering and validation the information at the source. Transfer features make data
available in the subsequent modules to improve consistency and productivity. The application
contains features for the generation of material control documents as well as having
checkpoints for exception reports.

Material management is a multi-disciplinary activity. Materials are identified and quantified in

the design and engineering disciplines (bills of materials and requisitions). The procurement
department purchases the materials (purchase orders) and expediters follow-up the delivery
and shipment. Before shipment, inspectors check the material against their specifications
(material release). Finally, construction receives and checks the material (receiving report)
and stores it in the warehouse or issues it (trial and actual withdrawals) for construction.
COMSITE modules cover all these activities, thereby integrating engineering, procurement
and construction system. This utilization of a common database eliminates redundancy
thereby improving productivity and accuracy.

COMSITE is a system with a module approach based on normal working practices: a

requisitioning module for engineering, a supplier information and purchasing module for the
buyers and a field material control and material allocation and planning module for
construction.

The system modules are fully integrated, thereby providing up-to-date information for fast
track decision making, but the system itself can be installed on stand-alone basis. Integration

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with other system such as the import of piping requisition quantities takes place via batch file
transfer. In addition to their modules there are standard table, not only at official level, but
more importantly at a project level. Consistency in (multi-office) execution is hereby ensured.
The ability offered by the material planning module to plan and allocate material resources
allow improvement of site labor productivity and refinement of construction schedules.

Data resides in an Oracle database, which is appropriate to execution of projects of all size
ranges and contract types. Subcontractors will be used their material management systems.

5.1 Scope of application

The application of COMSITE covers construction materials such as piping materials,

mechanical equipment and electrical & instrument material.

5.2 System Feature

5.2.1 Main Function

(a) Initialization

Project, Vendor, Specification, Isometric drawing preparation

Warehouse, Subcontractor assignment
Material Code file maintenance and display

(b) Supply Tracking

Requisition data import and display

Purchase order data import and display
Shipment data import and display
Packing list data import and display

(c) Warehousing

Reception recording
Material list and allocating
Material Shifting
OS & D generation

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(d) Stock Management

Stock issue
Stock adjustments
Stocktaking
Material balancing

5.3 Decision support

Alarming Material Shortage.

Subcontractor Workability Analysis.
Generate Statistics of Work Volume (Dia-in etc).
Break-down Material Consumption by Subcontractor … etc.

5.4 Material Handling Work Flow

Following figure shows overall Material handling work flow

Material Handling Work Flow

SLIP
RETURN
WELDING
Q/C
COST
SCHEDULE
:
REQ.
P/O
.. SPEC.
.
LINE,BILL
..
.
COMSITE

SITE ERECTION

INPUT OUTPUT

MRR SLIP
PRE-FAB
SPOOL
REQUEST ERECTION
SITE WAREHOUSE MATERIAL
MWS

RAW MATERIAL

MATERIAL SCHEDULE
ARRIVES AT SITE

PIPE SHOP

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Field Material Control System shall be capable of easily locating any piece of materials or
equipment from the receipt of materials up to incorporation the Plant, taking into account that
materials may be supplied from different locations.

6 ATTACHMENT

a) Attachment # 1 : Material Receiving Report

b) Attachment # 2 : Material Receiving Status Report
c) Attachment # 3 : Overage, Shortage and Damage Report
d) Attachment # 4 : OS&D(Overage, Shortage and Damage) Status Report
e) Attachment # 5 : Material Withdrawal / Return Slip

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 Attachment #1

MATERIAL RECEIVING REPORT

Project Name : MRR No. :

Project No. : Date Issued :
Receiving Status : □ Final □ Partial □ Completed Date Received:
P.O No. : Vendor : Shipper/Carrier :
QUANTITY AND PACKING TYPE
Bags Boxes Bundles Cartons Coils
Crate Drums Kegs Pallets Reels
Skids Loose Pcs Other
Ser. Q'ty
Item Description Remarks
No. Order P/L Receive

Total
□ Refer to OSD No. for overage, shortage and damage, if any.
□
Comments □
□
□

Checked by Approved by
Material Checker Lead Material Controller

Checked by
QC Manager
 Attachment #2

MATERIAL RECEIVING STATUS REPORT

Project No. :
Project Name
: Discipline :
CARGO SUPPLI
RECEIVIN WEIGHT PKG STORAGE
SER. NO RECEIVED MRR NO. PO NO. MATERIAL DESCRIPTION ER/VEN OSD NO. REMARKS
G STATUS (kg) NO. LOCATION
DATE DOR
 Attachment #3

OVERAGE, SHORTAGE AND DAMAGE REPORT

PROJECT NAME :
PROJECT NO. : OSD NO. : OSD-
P. O. NO. : DATE :
VENDOR : MRR NO. :
SHIPPER/CARRIER : MRR DATE :
B/L NO. : I/V NO. :
QUANTITY DESCRIPTION OF
L/I CODE/TAG No. REMARKS
Order’d Deliv’d Over. Short Dam’g Wrong MATERIAL

RECOMMENDED □ Repair in field □ Return to Vendor □ Replace

ACTION □ Advise Vendor □ Other :

CLAIM AGAINST □ VENDOR □ CARRIER □ Other : □ N/A

ATTACHED □ MRR REPORT □ PHOTOGRAPH □ NON-CONFORMANCE REPORT

REPLACEMENT / REPAIR / DELIVERY REQUIREMENT

URGENCY □ URGENT : Required by : □ NOT URGENT

SUPPLY SOURCE □ OFF-SHORE □ ON-SHORE

TRANSPORTATION □ AIR □ SEA □ HAND CARRY

METHOD □ COURIER SERVICE □ Other :

Prepared by :

Checked by :
Distribution : Approved by :
 Attachment #4

OS&D(Overage, Shortage and Damage) STATUS REPORT

STATUS
OS&D No. ITEM NAME REASON OF OS&D COMP. REMARKS
ACTION
DATE
 Attachment #5

MATERIAL WITHDRAWAL / RETURN SLIP

MWS No. : _____________________ REQUEST DATE : __________________

REQUESTE
R : _____________________ SUBCONTRACTOR NAME : ___________________

REQUES
CODE No.
ITEM NAME SIZE UNIT T REMARK
(TAG No.) Q'TY

PREPARED BY :_____________ REQUESTED BY : ________________

CONFIRMED BY : _____________ APPROVED BY : ________