New joint industry project could save millions of dollars for major projects

A group of 10 companies – BP, Total, Sonangol, Eni, Shell, Woodside, Engie, Saudi Aramco, Chevron and Statoil – kicked off a new joint industry project (JIP) for Standardization of Equipment Specifications for Procurement on 26 November.

Ian Cummins, head of upstream engineering for BP, newly-elected chair of JIP33’s Steering Committee says, “The industry continues to erode value by creating bespoke components in each of our projects and in doing so, misses the opportunity to leverage industry-level standardization. The vision for this JIP is to standardize the specification for procurement of bulk materials, packages, modules and potentially projects.  This will allow for a ‘win-win’ outcome for operators, engineering contractors and suppliers through improved cost, schedule, quality, safety and reliability.”

The JIP, facilitated by IOGP and supported by the World Economic Forum, will initially focus on three items to prove up the concept: ball valves, subsea trees and wellhead equipment and low voltage switchgear.

Mr. Cummins explains, “There are millions of dollars of potential savings to be gained per major project by not re-writing specifications and this is viewed as only the tip of the iceberg.  Standardized specifications on each project help us to significantly reduce unnecessary costs associated with preferential engineering.

“In procurement and fabrication, the removal of unnecessary requirements, inconsistency and alignment of similar requirements offers the opportunity for much greater standardization across end-users and improved supplier equipment quality.  This can lead to fewer fabrication defects, reduced risk, improved and predictable schedules and greater capital efficiency.

“In turn, improved quality helps projects start-up on time and stay up and typically leads to increased operations efficiency and operating cash.  Suppliers also see benefits such as the ability to deliver more efficiently, using simpler bid processes through to more standard production lines for fabrication
and testing.”

Pictured: Ian Cummins, BP

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