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1.0 Project Charter Purpose
The Project Charter defines the scope, objectives, deliverables and overall approach for
the work to be completed. It is a critical element for initiating, planning, executing,
controlling, and monitoring the project. It is the absolute master document for the project and
as such it should be the single point of reference on the project for goals and objectives,
scope, organization, estimates, deliverables, and budget.
There are items within the Charter that are supported by additional project control
documents. In these instances the Charter will name the documents involved and describe
their purpose and use throughout the project life cycle. This serves to keep changes to the
master document to a required minimum while providing a mechanism to monitor and
control the key areas of the project on an ongoing basis.
The Project Charter also serves as a contract between the Project Team and the Project
Sponsors, stating at a minimum:
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1.1 Project Background
Integrated Control Sdn. Bhd. (hereafter called as ICSB) is an established company which
specialized in Instrumentation and Control system engineering for oil and gas and process
industries as Systems Integrator. The company provides total solution for the Automation,
Instrumentation and Control needs of the rapidly developing process industries of Malaysia and
the neighboring countries especially in the field of Oil, Gas and Petrochemicals. Following are
the services that Intergrated Control Sdn Bhd can provide as a minimum:
Automation, Control and Instrumentation projects Management
Engineering from feasibility study to detail design
Supply of Field and panel Instrumentation
Supply of Control system such as DCS, Fieldbus, ESD, HIPPS, Fire & Gas etc.
System Integration
Commissioning and Site services
After sales services
Training
Integrated Control is officially appointed as system integrator in Malaysia by some
reputed DCS and Safety system manufacturers such as Yokogawa Electric, Emerson Process
management, ABB, Siemens and Allen-Bradley. ICSB can provide the local content of the oil,
gas and Petrochemical projects the full scope of Control, ESD and F&G systems, Local
coordination, Engineering, Tests, Commissioning, and Training and after sales services with
compatible prices.
Within the relatively short time from its establishment, ICSB has won a contracts or
engineering and supply of control systems for a new offshore platforms project, Kumang Cluster
Development Project located in Offshore Sarawak by Petronas Carigali Sdn Bhd-Sarawak
Operation (hereafter is called as PCSB-SKO).
The size and cost of the projects is high to new established company, however, as the first
major project, ICSB need to perform very well to ensure the project successfully completed
without any bad records.
The cost is not to exceed $10,000,000. This includes the initial project planning,
design and engineering, installation and testing, and also commissioning and site services.
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The appointed project manager will be responsible for the implementation, and will hire
an experienced engineering staff to ensure the smoothness of the project implementation. The
VP Manufacturing is the Project Sponsor and must sign off on all major deliverables. The
various company departments will contribute experienced staff resources to the project team
for the duration of the project.
This project will takes one year to be completed. The project has seven phases to be
implemented; preliminary design planning and research, engineering, procurement, hardware
integration and assembly, factory acceptance test, site installation and testing, and
commissioning. All seven phases is described under work breakdown structure (WBS).
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1.2 Project Key Assumptions and Control
Project Assumptions:
Project Constraints:
Effective project management is about identifying and managing risks to the project. The
risks should address both people resources and other resource areas. The Project Charter
specifies the Risk Management Plan including; activities, roles and responsibilities –
samples are given below.
Individual risk items are tracked on the Project Risk Management Item Tracking
document. The Project Manager is responsible for maintaining this document.
In spite of having done the very best up-front planning and definition of project
requirements, inevitably someone will want to change the scope of the project. Scope
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“creep” impacts the project deliverables and has been the downfall of many a project.
The Project Scope Change Request form is divided into three sections to fully document
input from the requestor, reviewer, and decision maker. It supports a cost / benefit type of
impact analysis for every requested change. The use of this form is the only way to request
and obtain a change to the project scope.
The Project Scope Change Request Log form is maintained by the Project Manager and
provides an overview and status of each and every change requested. A history of all
changes is maintained on this form.
Regularly scheduled, frequent reviews of all open change requests are to be done to
ensure all requests are dealt with in an expeditious manner and to protect the integrity of
the project plan. These review meetings are to be included in the Project
Communications Plan.
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1.2.1 Risk Management Plan
Activity Descriptio Ownership
Identification n the project, the
At the beginning of Project Manager
major risks will be identified and Engineering Manager
documented for tracking purposes. A Finance manager
specific risk management meeting
will be held with the key project
management to establish the project \
risks.
This project is the first major project in oil and gas secured by Integrated Control
Sdn Bhd, in order to survive in this business and also towards establishment of the
company in the industry, this project need to be delivered without any bad records or
complaints.
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1.4 Project Scope of Work
1.4.1 Objectives:
The ultimate objectives of this project are:
To deliver all the project deliverables on time base on schedules without any delay.
Meet all requirement and specification give by client
Successfully install and commission the control system at site
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Table 3 Project Estimated Costs by Milestone:
Kumang Cluster
Offshore Development Project Study, System Design
Project Kick Off Planning & Research and
Engineering
Hardware
Factory integration & Procurement
Acceptance Test assembly
Site Installation
and Testing Commissioning
Commissioning
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1.5 Project Management Strategy and Resources Planning
The Project Resource Plan defines; the project organization chart, the staff resources
required by skill set to complete the various project activities, and the non-people resources
required to support the project team.
The following organization chart shows the proposed project team reporting structure.
Kumang Cluster
Offshore
Development Project
Planner
Technician Technician
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1.5.1.1 Project Manager Responsibility
The Project Manager is hereby authorized to interface with management as required,
negotiate for resources, delegate responsibilities within the framework of the project,
and to communicate with all contractors and management, as required, to ensure
successful and timely completion of the project. The Project Manager is responsible
for developing the project plan, monitoring the schedule, cost, and scope of the
project during implementation, and maintaining control over the project by
measuring performance and taking corrective action.
Duration of Estimated
Resource Type Quantity Job Status
involvement Cost
Project Manager 1 Jan-Dec Internal staff RM241,920
Project Engineer 1 Jan- July Internal staff RM120,960
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notices and team building. This plan sets out the timing and responsibilities of
essential items; for example, the Project Status Reports for the individual teams and
the overall project.
The Project Team Communications Plan document is used to define and
communicate the plan. The Project Manager is responsible for establishing and
maintaining the plan.
The following document templates are available to handle the key repetitive project tasks:
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1.7 Project Wrap-Up:
The Project Wrap-Up Report is prepared by the Project Manager at the conclusion
of the project. Prior to its preparation, an interview process is conducted with all of the
main project participants to complete the Project Lessons Learned document. All of
the major project activities are given a rating by the participants and an overall summary
of all the responses is prepared. The Project Lessons Learned summary document
becomes an important component of the project wrap-up. Also, a summary description
of the project highlights and lowlights is provided for the major activities.
The main purpose of this report is to learn those things that went well, those things
that could be done better, and apply that knowledge to subsequent projects.
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2.0 Work Breakdown Structure (WBS)
Kumang Cluster
Offshore Development
Project
Overview & Architecture Hardware and Integrate Hardware a Panel Full systems
Requirement Design Software hardware test (in house) installation, test with real
Research Purchasing /software base hook up and Process
on System wiring
architecture
Sub-Vendor design Tuning and
Customer Hardware
Panel power
Specification Design Services Logic testing
Software and up and Loop
Study
Assemble, Logic Test
installed and functionality
wiring works all Test
Project Planning Software & the hardware in System Platform
Logic Design System panel interfacing Process startup
with other
systems such
as Telecom and
sub-systems
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2.1 Preliminary Design Planning and Research
The scope covered under Process Monitoring Control Systems (PMCS) shall
include control and monitoring of Hart signals, Foundation Fieldbus signals and
serial Modbus communication.
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The PMCS shall be completed, tested and supplied in accordance with the
requirements given in the customer specification.
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2.1.3 Project Planning
This project takes duration of one year to be completed. It consists of 7 main tasks, from the preliminary design
planning and research until project handover to the client.
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2.2 System Engineering
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Figure 2 Kumang Cluster PMCS Architecture
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DCS SIS
Figure 3
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Figure 4 Control Process Flow
As a new company, for this project we have already chosen the DeltaV
control system that has been supplied by Emerson Process Management. This
product comes from US that provides and operates in many bigger chemical
plants including oil & gas platform for process control event in Middle East.
A part from that, the hardware design also covers the cabinet design as the
importance part in order to create the best place for the controller and I/O module.
For the cabinet design, the 1700x800mm measurement is preferred as the
requirement from our client. We will provide 22 cabinets to place the controller
which consist of half for system and another half for marshaling. For system
cabinets, the Main Processing Module, Communication Module and I/O card will
be slotted in vice versa for the marshaling cabinet and will be a location for
Terminal Block that provides jointing smart wiring method from Junction Box in
the field directly to the control system.
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System Cabinet Marshalling Cabinet
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2.2.3 Software & Logic Design
2.2.3.1 DCS Logic and Graphic Design
Software (logic) design is related to the logic that functional as the brain for
the automation process control systems. Our system engineer will design the logic
which is based on the field process flow and condition to send and get the data.
Logic for DCS consists of many types and one of them is called as Function
Block Diagram Design (as shown is Figure 6) that is used in huge chemical, oil
and gas control system field.
In DCS DeltaV software; configuration of the process logic and graphic
logic for process flow is depend on the Piping and Instrumentation Drawing
(P&ID). Like process logic design, the graphic logic design has their software
which is called as Human Machine Interface (HMI) that include in Emerson-
DeltaV program. The Figure 7 has shown the example of the HMI graphic design
from the previous project. This HMI graphic design indicate the alarm status,
level of temperature, level of pressure, level of tank and many more information
as per our client requirement.
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Figure 7 Example of the HMI Graphic design
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and valves will enter the safe position if energy instrument air is lost. This
complete design method for ESD logic will be built on De-energize to trip logic.
Fail Safe Logic-Energized to trip- Energized to trip systems can be
found when the system design should avoid false trips. This can be case as for
FGS systems. Within DeltaV SIS still a 1 indicates the healthy or No trip action
and a logical “0” indicates abnormal or Trip action. If the input signals are not
failsafe “in the field” or contact normally opened and closed to trip, inversion in
the input function block will be applied before using it in the logic. If output
signals are non-fail safe(Energize to Trip), then the logic will be implemented
using De-energize to trip action, but this output will be inverted in external device
called of “ Inverting Relay” before connecting to the element. This complete
based design FGS logic will be built on Energize to trip logic.
2.3 Procurement
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2.4.1 Hardware and Software integration Base on Design
It should be noted integration of the DCS and SIS does not imply a single
common system. Rather, the two systems are integrated for ease of use and
convenience. The configuration software may have different types of logic
function blocks, with some meant exclusively for use in safety functions and
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others used in normal control system functions. If the logic solvers need to
communicate with other logic solvers, then it has to be over a communication bus
that is robust enough to carry safety-critical data reliably. Thus, the integrated
system is not really totally integrated but is much more closely aligned than
earlier totally stand-alone systems. Figure 1 and Figure 8 has shown the big
picture of the integrated system in term of hardware and communication line
redundancy.
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controller, system power supplies, I/O card network equipment and terminal
blocks.
The Cabinet wiring is carried out in a neat workman like manner. The total
loading of the wiring or I/O cables in the ducts is not more that 80% in order to
fulfill the requirement of 20% spare in any cabinet as follow in the international
standard. All the wiring within the cabinet is passing through separate ducts of
different types based on the signal types.
The cables shall be neatly dresses tied with cable tags and adequate spare
space shall be provided in these ducts for future use. All field instruments cables
are not in our scope of supply.
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I/O Signal Wire Label Format-the text printed on the sleeve must represent
the termination point of the wire, first designator is the equipment it connects to
terminal strip I-JB-1007, then terminal designation, followed by a “/” and finally
the wiring source. The following diagram illustrates the I/O signal wire label
format:
The test results and data shall be recorded in the Test Result box with all
representatives' initials. The Problem Log shall be used for recording any
deviation from the design requirements. Corrective actions for certain Problem
Log items may be deferred to a later date, as usual before shipment or after
delivery to site. The Variation List shall be used for recording PCSB request for
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additional work, modifications and/or deletions that are not based on the approved
documents.
Upon successful completion of FAT, PCSB-SKO shall be requested to sign the
Certificate of Acceptance. This is to certify the Engineering Design Development for
Kumang Cluster Project has been tested successfully based on this FAT Procedure. The
topics to be covered during FAT are shown in Table 1. Details of the individual test are
described in the FAT procedure.
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provided to the PCSB-SKO for approval and the same document will be used as a
guideline for the testing to be carried out at site. A record of all component
failures and/or software changes is kept, and made available during the SAT.
The topics to be covered during SAT are shown in Table 2. Details of the
individual test are described in the SAT procedure.
Power Up Inspection DCS and SIS System Panels and Marshalling Panels
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3.0 Project Breakdown Structure (PBS) Software
Engineer
Kumang Cluster
Offshore
Development Project
Service
Project Manager Lead Hardware Lead Software Engineer
Design Design
Engineer Engineer
Technician
Project Engineer
Hardware
Engineer
Planner
Technician Technician
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3.1 Organization Breakdown Structure (OBS)
Client/End User:
Petronas Carigali Sdn.
Bhd.-Sarawak
Operation
Service &
Commissioning
Technical & Procurement Management
Engineering
Design Manager: Managers:
Planning
Manager: Nurul Azimah Norseha
Manager:
Faizal Abdullah Ext: 3341 Ext: 2333
Mohamad Fani
Ext: 4132 Anis
Ext: 3233
Ext:2334
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4.0 Schedule Planning
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4.2 Activity logic table for the plan's progresses are as show below:
DURATION Float
PREDECESSOR ES EF LS LF
(weeks) (weeks
ACTIVITY
1/1/2013 18/2/2013 1/1/2013 18/2/2013
A1 2 Start 1/1/2013 18/1/2013 1/1/2013 18/1/2013 0
A2 3 A1 21/1/2013 18/2/2013 21/1/2013 18/2/2013 0
19/2/2013 27/5/2013 19/2/2013 5/6/2013 0
A3 2 A2 19/2/2013 8/3/2013 19/2/2013 8/3/2013 0
A4 7 A3 11/3/2013 16/5/2013 29/3/2013 5/6/2013 2
A5 8 A3 11/3/2013 27/5/2013 11/3/2013 27/5/2013 0
17/5/2013 25/6/2013 28/5/2013 25/6/2013 0
A6 2 A4 17/5/2013 5/6/2013 6/6/2013 25/6/2013 2
A7 3 A5 28/5/2013 25/6/2013 28/5/2013 25/6/2013 0
26/6/2013 13/8/2013 26/6/2013 13/8/2013 0
A8 2 A6,A7 26/6/2013 15/7/2013 26/6/2013 15/7/2013 0
A9 3 A8 16/7/2013 13/8/2013 16/7/2013 13/8/2013 0
14/8/2013 11/9/2013 14/8/2013 11/9/2013 0
A10 3 A9 14/8/2013 11/9/2013 14/8/2013 11/9/2013 0
A11 3 A9 14/8/2013 11/9/2013 14/8/2013 11/9/2013 0
12/9/2013 30/10/2013 12/9/2013 30/10/2013 0
A12 2 A10,A11 12/9/2013 1/10/2013 12/9/2013 1/10/2013 0
A13 1 A12 2/10/2013 10/10/2013 2/10/2013 10/10/2013 0
A14 2 A13 11/10/2013 30/10/2013 11/10/2013 30/10/2013 0
31/10/2013 18/12/2013 31/10/2013 18/12/2013 0
A15 2 A14 31/10/2013 19/11/2013 31/10/2013 19/11/2013 0
A16 1 A15 20/11/2013 28/11/2013 20/11/2013 28/11/2013 0
A17 2 A16 29/11/2013 18/12/2013 29/11/2013 18/12/2013 0
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4.2 Gantt Chart and Network Diagram
Gantt chart and network diagram for this project are attached in the Appendix.
Loan payment:
Thus, the total amount that will be paid to the bank is RM 916,667 per month.
The expenses cost is for this project is repayment loan, manpower cost, service cost, part
and material cost. The repayment loan has been decided previously. The manpower and
service cost is calculated according to the current cost in the market. The part and
material cost consists of three main item; hardware, software and miscellaneous cost. The
utilities and other expenses are covered in the miscellaneous cost.
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5.1 Man Power Cost
There are two types of man power cost.
- A team of worker from Integrated Control Sdn. Bhd., which consists of Project
Manager, Project Engineer, Hardware and Software Design Engineer, Planner and
Technician.
- Service cost; manpower for site installation, testing & commissioning.
Title Cost Per Hour Cost Per Month Total Cost Duration
Project Manager RM100 RM20,160 RM241,920
Jan-Dec
Project Engineer RM50 RM10,080 RM120,960
Planner RM30 RM4,480 RM53,760 Jan-July
Lead hardware design
engineer RM80 RM17,920 RM71,680
Lead software design
engineer RM80 RM17,920 RM71,680
Hardware design Mac - Sept
engineer RM60 RM12,320 RM49,280
Software design
engineer RM60 RM12,320 RM49,280
Technician RM30 RM6,720 RM26,880
Table 9 Manpower Salary
Duration
Site Visit Number Cost per day Total cost
(days)
Engineer 2 2 RM2,000.00 RM8,000.00
Technician 1 2 RM1,200.00 RM2,400.00
1st Mob (Hotwork activities)
Project Engineers 3 2 RM2,000.00 RM12,000.00
Service Engineers 3 15 RM2,000.00 RM90,000.00
Technicians 3 15 RM1,200.00 RM54,000.00
2nd mob (Demolition &
Installation activities)
Project Engineers 3 2 RM2,000.00 RM12,000.00
Service Engineers 3 21 RM2,000.00 RM126,000.00
Technicians 3 21 RM1,200.00 RM75,600.00
Manpower for Site Testing and
Commissioning at site
Engineers 3 14 RM2,000.00 RM84,000.00
Total RM464,000.00
Table 10 Service Cost
5.2 Part and Material Cost
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Part and material cost for this project covers the hardware and software material required
for this project, spare parts for 2 years, the system networking, systems documentation
and miscellaneous cost. The detail explanation of the part and material cost are attach in
the appendix (refer BOM).
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6.1 Systems Documentation & Miscellaneous 800,000
7 PACKING, INSURANCE AND LOCAL TRANSPORTATION
7.1 Packing, Insurance and Transportation 27,000
Total 7,011,612
Table 11 Part and Material Cost Summary
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5.3 Financial Estimation
The table below shows the estimated cash-flow statement for Integrated Control Sdn. Bhd. project. The project is estimated to be
completed in one year. All cost currency is in Ringgit Malaysia (RM).
Description Months
(RM) JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Handover
Initial pay (30%) After approve drawing (20%) FAT (20%) SAT (20%)
(10%)
Income
Payment 1,200 1,200 1,200 600, 600, 60 60 1,2 1,2 1,2 1,2 1,20
from client ,000 ,000 ,000 000 000 0,000 0,000 00,000 00,000 00,000 00,000 0,000
Carry 10,000 10,218 10,437 10,622 10,173 8,9 7,7 6,5 5,8 5,2 4,4 3,60
forward ,000 ,613 ,227 ,240 ,653 27,215 14,376 01,537 93,179 84,820 44,461 4,103
11,200 11,418 11,637 11,222 10,773 9,5 8,3 7,7 7,0 6,4 5,6 4,80
Total
,000 ,613 ,227 ,240 ,653 27,215 14,376 01,537 93,179 84,820 44,461 4,103
Expenditure
Man power
34,720 34,720 68,320 101,920 68,320 34,720 34,720 30,240 30,240 30,240 30,240 30,240
cost
Material cost
(Hardware 30,000 30,000 30,000 30,000 861,452 861,452 861,452 861,452 861,452 861,452 861,452 861,452
& Software)
Service Cost 0 0 0 0 0 0 0 0 0 232,000 232,000 0
Loan
916,667 916,667 916,667 916,667 916,667 916,667 916,667 916,667 916,667 916,667 916,667 916,667
repayment
Total
981,387 981,387 1,014,987 1,048,587 1,846,439 1,812,839 1,812,839 1,808,359 1,808,359 2,040,359 2,040,359 1,808,359
expenditure
Total cash
10,218,613 10,437,227 10,622,240 10,173,653 8,927,215 7,714,376 6,501,537 5,893,179 5,284,820 4,444,461 3,604,103 2,995,744
position
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5.4 Financial Model
Since the 10% interest rate is proposed to the bank in order to make loan payment and the
total loan plus interest is estimated to be fully paid within a year, hence the payback
period, average monthly profit and return on investment are as shown below.
0 (11,000,000.00)
1 1,200,000 1,200,000
2 1,200,000 2,400,000
3 1,200,000 3,600,000
4 600,000 4,200,000
5 600,000 4,800,000
6 600,000 5,400,000
7 600,000 6,000,000
8 1,200,000 7,200,000
9 1,200,000 8,400,000
10 1,200,000 9,600,000
11 1,200,000 10,800,000
12 1,200,000 12,000,000
Payback period 12 month
Total gain (RM) 12,000,000
Table 13 Payback Period
The loan is estimated to be fully paid during the 12 month (1 year). There is no discounted
cash flow involves due to the 1 year full payment plan.
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Return of Investment (ROI)
The ROI shows that this project will have 0.76% return of investment with an average of
RM83,333.33 monthly profits.
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6.0 Discussion
Integrated Control Sdn. Bhd. is an established company which specialized in
Instrumentation and Control system engineering for oil and gas and process industries as
Systems Integrator. The Kumang Cluster Development Project is a project to supply of control
systems for a new offshore platforms project, by Petronas Carigali Sdn Bhd-Sarawak Operation.
This project will take one year from January 2013 until December 2013, to be
completed. The project has seven phases to be implemented; preliminary design planning and
research, engineering, procurement, hardware integration and assembly, factory acceptance
test, site installation and testing, and commissioning. All seven phases is described under work
breakdown structure (WBS).
Mostly, the activities are in critical path which they must be completed within the
schedule. However, there are two activities that are allowed to have two weeks of slack; the
hardware design and hardware purchasing activities. Both hardware design and software
will be started after the completion of project planning.
Hardware design is firmly based on the customer requirements while software design
is related to the logic that functional as the brain for the automation process control systems
thus making the software design more critical than the hardware design task. The critical
activities therefore need to be completed as in plan to prevent the waste of time and cost of
the project progress. Thus, engineers need to work hard to achieve the project objective.
Initially, the loan RM10,000,000 is proposed to the bank with 10% interest rate. In
order to observe the company profit, thus the cash-flow estimation table is built. The loan is
estimated to be fully paid in one year, thus no discounted factor involves in the calculation
made. The ROI shows that this project will have 0.76% return of investment which will
bring an average of RM83,333.33 monthly profits to the company.
The total client payment of RM12,000,000 will be received in five stages; 30% for
initial pay during the project commencing, 20% after drawing approval, 20% after factory
acceptance test (FAT), another 20% after site acceptance test (SAT) and the last 10% during
project handover at the end of the project. The cost is not to exceed RM12,000,000. This
includes the initial project planning, design and engineering, installation and testing, and
also commissioning and site services.
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7.0 Conclusion
This proposal shows the design and implementation processes of the Kumang Cluster
Development Project. It is a project to supply of control systems for a new offshore platforms
project, by Petronas Carigali Sdn Bhd-Sarawak Operation. This project will take one whole year
to be completed, from January 2013 until December 2013. The project has seven phases to be
implemented; preliminary design planning and research, engineering, procurement, hardware
integration and assembly, factory acceptance test, site installation and testing, and
commissioning. The loan is estimated to be fully paid in a year. The ROI shows that this project
will have 0.76% return of investment which will bring an average of RM83,333.33 monthly
profits to the company.
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APPENDIX
1. Bill of Material
2. Project Gantt Chart
3. Project Network Diagram
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