Prolonged project delays could be
detrimental to the project’s CAPEX, schedule and economic feasibility,
if it does not end up killing the project. The Case Study is a Midstream
EPC Gas Project jointly owned by a National Oil Company and multiple
International Oil Companies. The Project has been on the drawing board
for over a decade with successive CAPEX estimates prepared during the
project’s development phase. This Paper presents the estimating
processes that were adopted by the FEED contractor on behalf of the
owner in the preparation of the CAPEX estimates and the resultant steady
CAPEX growth over time. While the major contributing factors to the
CAPEX growth are identified principally as scope changes (internal) and
cost escalation (external), there were still many others. Appropriate
monitoring and quantification of these factors are required as the
project’s CAPEX evolves over time in order to provide a good basis for
informed decision by management. Keeping the project’s CAPEX growth at a
minimum enhances the realization of the project’s business objectives
and profitability.