Modularization Brings Benefits, Challenges to Project Logistics
BY PAUL SCOTT ABBOTT
In 1963, American filmmaker Stanley Kramer brought to the screen the epic comedy It’s a Mad, Mad, Mad, Mad World, about a wild quest for buried treasure. More than a half-century later, as big construction projects are increasingly prefabricated into modules prior to transport to jobsite, industry is adventurously rushing into what might be described as a “mod, mod, mod, mod world,” a global order in which financial benefits also await.
But, while cost savings and other gains can undoubtedly be achieved through modularization, the evolving concept brings challenges along with opportunities and is causing engineering, procurement and construction firms, or EPCs, to rethink – and even expand – their roles.
“Fabrication excellence is going to be a game-changer,” Cyril Joseph Varghese, United Arab Emirates-based global logistics director for strategy and commercial at Fluor, told Breakbulk. He added that the trend is causing major EPCs such as Fluor to look at themselves these days as EPFCs – that is engineering, procurement, fabrication and construction firms.
Varghese’s Fluor colleague Chris Vertanness, vice president and director of operations for COOEC-Fluor, joint venture operator of a 500-acre fabrication yard on the coast of the South China Sea, said modularization adds challenges but can yield significant advantages over more traditional on-site “stick-build” approaches.
“When a project is suited to modularization,” Vertanness said, “modularization can provide several benefits, including the cost and schedule certainty of assembling in a controlled environment. This is especially important as projects continue to become more complex. There can also be cost advantages to assembling modules in the Asia- Pacific, while maintaining the same high levels of quality and safety that are expected around the world. As projects continue to choose a modular execution strategy, the number of modules being transported will similarly increase.”
[Photos: Cyril Varghese, Fluor | Chris Vertanness, COOEC-Fluor
Caption for Bechtel photo: Bechtel Oil, Gas & Chemicals relies upon lift-on, lift-off export jetty modules in transport of project cargoes for many liquefied natural gas projects.
Andy Young, Bechtel Oil, Gas & Chemicals’ Houston-based logistics manager, concurred in the belief that modularization, while not always the preferred methodology, is finding increasing application in petrochemical and energy spheres and beyond, although its productive use may be limited by schedule considerations, as well as the capacity of vessels to accommodate super-large modules.
“Clearly,” Young said, “modularization has benefits, but it’s not necessarily the standard for all projects.
“When evaluating modular versus stick-build strategies, we take into consideration total installed costs – delivery of materials, fabrication, module transportation, construction costs and so forth,” he said. “But, in some cases, schedule may be more critical, reducing overall construction time, getting plants online quicker, allowing clients to generate product sooner. Depending on the priority of cost and schedule, there is still value in both strategies.”
Young added that larger prefabricated units that cannot fit into the hold of a typical heavy-lift multipurpose vessel, or MPV, must move on specialized open-deck module carriers or extra-wide barges. “The limited availability of these assets, when compared to the heavy-lift MPV global fleet, is a concern as megaprojects increase and with it modularization.”
In addition, Young said, shipment of modules requires innovative handling solutions, such as reconfigurable lifting frames to allow vertical lifts from multiple points at different positions and heights.
“Shipping modules is complex,” he said. “At Bechtel Logistics, we are evolving modularization through detailed transport engineering that results in the optimization of module transport, which then feeds back into module design. It’s a more holistic approach.”
EARLY PLANNING CRITICAL
Reducing module sizes to fit on MPVs that are more economical and readily available than specialized open-deck vessels may cut voyage-related costs, Young said, but sizing of modules goes both ways. “We are also looking at increasing module sizes and using larger vessels to reduce the number of tie-ins at site. Optimization – smaller or bigger – is the key.”
Because of potential limitations related not only to vessels but also infrastructure restrictions at (and getting to) jobsites, Young said, it becomes all the more crucial for module planning to be addressed in the earliest stages of a project, sometimes as soon as commencement of feasibility studies.
“Going forward,” he said, “modularization strategies will be more engineered, much earlier on. The cost-benefit calculations between module design, transportation and construction will be much more interlinked, with logistics being a valuable contributor.”
Bechtel already deploys software including a module transportation simulation tool to meld historical and current information with simulated data to help predict delivery outcomes and expenses, and to mitigate cost and schedule risks.
“Carriers, vessels and equipment are an integral part of any strategy development,” Young said. “The problems we face when basing a modularized strategy around limited assets is subsequently securing those assets when the project goes live.”
SHIPPING OPTIONS CUT
Leer, Germany-based global project carrier BBC Chartering, which boasts a fleet of 170 multipurpose and heavy-lift vessels, maintains a mission of meeting shipper demands while hoping EPC logisticians understand that, as the immensity of modules increases, the options for shipment do decrease.
“Surely, EPCs are aware that, with increasing size and weight characteristics of cargoes, they have lesser shipping options,” said Raymond Fisch, BBC’s senior vice president for strategic projects.
“Of course, as a carrier we appreciate simpler lifts, cargo operations and sea fastening methods,” Fisch said. “Whatever cargo design we receive, our main task as carrier is to perform according to the schedule requirements of our customers on the desired ports.
“How an EPC plans and prepares its modules and components may follow not only a transport logistical plan, but also an overall engineering and construction master plan,” he said. “Hence, we deliver shipping solutions based on what is asked for.”
Fluor’s Vertanness put it simply: “Modularization is creating more demand for larger vessels that can ship modules. It’s increasing the business for large vessels.”
[Photos: Andy Young, Bechtel Oil, Gas & Chemicals
LEFT: A prefabricated platform module leaves the COOEC-Fluor yard in Zhuhai, China, sailing for an oilfield development project about 105 miles southeast of Hong Kong in the Pearl River mouth basin of the South China Sea.
RIGHT: RIGHT: Modules for the Kuwait Integrated Petroleum Industries Co. Al-Zour project prepare to depart the expansive COOEC-Fluor fabrication yard in Zhuhai, China.
In the past, he said, most shipments for projects consisted of individual pieces of equipment or pipe, but nowadays large modules are being shipped in one piece, with pipe, equipment, instrumentation, electrical units and other items already assembled together. Furthermore, Fluor is fabricating pipe at the COOEC-Fluor yard in China and packing it in containers, the larger ones of which are shipped breakbulk, creating more activity in that sector.
With increased modularization, Fluor’s Varghese said, total volumes shipped for projects could “easily quadruple,” with materials and equipment being transported to the fabrication yard, from which finished modules are later shipped to the jobsite.
Varghese said Fluor sees significant opportunities to “marry” available deck space on preselected carriers with module design and dimensions, thereby increasing deck utilization and reducing per-tonne transport costs, while economies of scale may also be achieved by using sister vessels with similar grillage design.
MODULES GETTING LARGER
At the same time, module sizes are continuing to increase, with skidways at the COOEC-Fluor yard designed to accommodate modules weighing as much as 50,000 tonnes – a size that may be too large to ship in one piece, particularly to sites that are remote and/or have limited water access.
Vertanness said Fluor breaks virtually all projects into multiple modules, with the number and size of each determined on a project-by-project basis. Individually created execution plans pinpoint optimum module size and type based on logistics, costs and other constraints. For example, if the ultimate project site is landlocked, modules eventually will have to move via truck, therein facing over-the-road weight restrictions plus limits that may be presented by bridge strengths, utility lines and/or buildings.
Recognizing that “modular-driven execution,” as Vertanness termed it, is much more complex than abiding by traditional stick-build methods, the COOEC-Fluor yard is seen by him as a vital part of an overall integrated solutions approach.
“It’s critical for the fabricator to be engaged very early in the design so that they are collaboratively involved in how the modules are designed and shipped,” Vertanness said. “That is why Fluor’s integrated solutions approach has been so impactful.
“Our fabrication teams are engaged on Day One with our design and procurement teams,” he said. “This minimizes changes and delays as the project advances, helping control cost and schedule.
“At Fluor, we’re using manufacturing-style processes so that everything is designed around that module assembly in order to improve productivity.”
Riches may certainly be found in modularization, and EPCs – or EPFCs – along with their transport providers obviously must work collaboratively to navigate the figurative treasure map to reach and unearth the bountiful goal. BB
A professional journalist for nearly 50 years, U.S.-based Paul Scott Abbott has focused on transportation topics since the late 1980s.