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EPC Project Management

EPC project management is the way to manage different form of EPC contracts. Such EPC contracts are complex and require a thorough understanding before carrying them out. EPC is an abbreviation for Engineering, Procurement and Construction. This term is usually utilised in the manufacturing and construction industry.

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EPC Project Management- An Overview

EPC is an abbreviation for Engineering, procurement and construction. It deals with the procedure and process related to managing projects from the inception stage to the completion stage. This is more of a legal contractual arrangement where an individual or a company known as an EPC contractor would streamline the process related to a particular project or construction from its inception phase to the completion phase.

The EPC contractor would be responsible for carrying out all the activities from the initial design, production, processing and completion of the project. Once the project is completed, it would be handed over to the end user. The end user or owner would take the project only when it is completed.

EPC project management hence would be considered as the entire process which is dealt by the EPC contractor. Engineering the contract, would consider all the requirements of the contract. This would include the time taken to consider the form of contract, materials required, individuals responsible for carrying out the activities and the sanction plan or blue print of the construction. Procurement would include the purview of securing all the capital goods and raw materials required for carrying out the project.

Under procurement, the contracts which are entered into for securing raw materials would also be carried out. Construction would include the implementation phase of the entire project. Here the main criteria would be the resources utilized in carrying out the construction. Apart from this, the time aspect would be the main criterion for this.

Hence EPC project management would be the entire process of managing the project from the inception phase to the completion phase. It is crucial to secure proper EPC project management consulting services in order to finalize a project.

Benefits of EPC Project Management

There are different forms of benefits of EPC project management. Some of the benefits are as follows:

Benefits of EPC Project Management
  • Ease of Burden

    By using EPC project management, the company can have fewer burdens as the work would be completed under the purview by the same company or individual. This company is known as an EPC contractor.

  • Professional Services

    EPC project management is usually conducted by professional companies and individuals. Hence there are no issues related to completion of such projects. These projects can be completed within a stipulated time frame.

  • All Services under one Company

    All the services related to engineering, procurement and construction are carried out by one company. Hence the individual giving the contract would not have the burden to assign the procurement and construction aspect of the project to another company. All the services would be carried out by one company.

  • Trustworthy

    As the services provided by an EPC contractor would be carried out with diligence and integrity. Hence a company can trust the EPC contractor without any burden.

Who are the parties under EPC Project Management?

The following are the parties under EPC project management:

Who are the parties under EPC Project Management
  • EPC Project Manager

    An EPC project manager would usually be a company or an individual involved in carrying out the entire work related to EPC project management. This would be right from the beginning of the engineering till the completion of the project all the responsibilities would be carried out by the EPC project manager. Usually the EPC project manager would be a company or engineering group which carries out different forms of EPC projects.

  • End User Owner

    The End User or the owner is the party which provides the contract to the EPC project manager. Hence the end user would be a company or individual that provides the whole EPC project to the EPC Company. A fixed budget would be considered by the End User. Budgetary requirement would be carried out as per the requirements of the end user. Based on the objectives and needs of the end user, the EPC company works.

  • Third Parties

    Third parties would be other forms of individuals and companies involved in the supply chain of EPC project management. This would be individuals such as third party suppliers of raw materials and capital goods for the completion of the project.

Role of an EPC contractor under EPC Project Management

EPC project management is quite complex. The following roles are carried out by an EPC contractor:

  • EPC Project Management Company

    When the contract is given to a company that carries out the duties of an EPC contractor, then the company must employ diverse and technical staff to carry out the requirements of the project. Such services must be provided as per the requirements of the end user requirements.

  • Development of Concept

    The development of the concept would depend on the requirements of the end user. Hence the EPC project management company should focus on the objectives and the priorities of the end user. All these objectives must be streamlined as per the requirements of the end user.

  • Carry out Feasibility Studies

    In the next step, the EPC project manager would carry out a feasibility study. This is also known as a cost and budget analysis, to understand the requirements of the end user based on the cost and budget planned. Such feasibility analysis must be documented and discussed with the end user or owner. Through this, the requirements of the end user would be understood. Apart from this, a feasibility is carried out to understand the amount of budget required for carrying out the EPC.

  • FEED Analysis and development

    FEED is an abbreviation of Front End Engineering and Design. This would be one of the main steps of carrying out the EPC contract. The design and resources utilized in this step would be carried out. Process flow diagrams and other particulars would also be discussed under this step. One more critical requirement is to carry out Hazard Analysis (PHA). This has to be documented. Such documentations would help in achieving the process related to implementation of the EPC contract. FEED analysis is a resourceful tool which is utilized in project budgeting. Such tools are useful in budgeting analysis.

  • EPC Implementation

    After carrying out all the above, EPC implementation would be carried out. Engineering would include all the requirements for the company to carry out the project. Procurement would include the required raw materials for implementing the project. Other issues here would include demand and supply of capital goods and other form of raw materials. Construction would be main stage of implementing the project.

  • Commissioning EPC

    This is the critical step in EPC. Without this step, the whole process of EPC would not be carried out by the company. Commissioning would include the requirement of labor to carry out the work for the EPC contract.

  • Quality Standards

    In all EPC contracts, project management quality should be maintained. Such quality must be of high standards, in accordance with the requirements of the End User.

What is the difference between EPC project management and Turnkey Project?

The above terms EPC project management and Turnkey Project are not the same. EPC is an abbreviation for Engineering, Procurement and Construction. EPC would include some form of engineering contract with a basic set of controls and procedures. As long as the above controls and procedures are followed, the contract would be completed within a stipulated period of time.

Hence in an EPC project there would be a standard framework to be followed by the EPC contractor in carrying out the requirements of the end user. As long as these standards are achieved, the EPC project would be completed.

Turnkey Project is not similar to EPC project. Turnkey project would be a construction contract which is suited to meet the specific criteria or the requirements of the end user. There are more rules related to technical procedures which are followed in a Turnkey Project. In a turnkey project the contractor would design the needs based on the criteria which come with the project.

In an EPC project, there would usually include third parties which are involved in the process of carrying out the requirements. However, in a Turnkey project the designer would handle all the requirements of the project.

For example take the construction of an airport or a port. If this project is considered on a Turnkey basis, then the contractor would have to carry out all the design, engineering, procurement and construction on a specific basis. Individual projects for the airport would not be allowed to carry out. However, in an EPC project individual projects would be allowed to be subcontracted to other project architects and engineers.

What do I need to provide to hire an EPC contractor under EPC project management?

In order to hire a professional EPC contractor under EPC project management the following would be required:

  • Scope of the Project

    This would include the main objectives and goals which can be attained by carrying out such a project.

  • Project Details

    This would include the blue print of the project and other details which is required by the EPC project manager.

  • Budget

    This is crucial for carrying out the project. Such budget would be critical in implementing the project. Budgeting analysis has to be carried out by the EPC project manager.

  • Legal Documents

    All the legal documents, for carrying out a particular engagement also have to be provided to the EPC project manager.

  • Enter into Legal Agreements

    It is crucial to always enter into legal agreements with the EPC project management company. All the terms and conditions related to the project must be negotiated and written. The agreement must be signed by both the parities and executed to have legal significance. The end user must also ensure that the contract is covered by different clauses to limit his liability.

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Frequently Asked Questions

EPC is an abbreviation for Engineering, Procurement and Construction.

EPC project management deals with the entire process of handling a project from the engineering phase to the end phase. This would also include the implementation of the construction. The EPC project would only be completed and finalised when provided to the end user.

There are different forms of risks associated with carrying out an EPC project. Supply Chain risks during implementation are critical for carrying out the project. It is important for all the parties to mitigate risks by entering into legal agreements.

Both the above terms are different in operation. EPC is handled as per the requirements of the end user. Basic specifications would be carried out by an EPC contractor. Turnkey Project is a specific project which has to be carried out with specific resources. For example construction of an airport can be considered as a Turnkey Project.

Carrying out the construction of a large bridge or dam would be a classic example for an EPC project.

The following are the stages of EPC:

  • Engineering
  • Procurement
  • Construction
  • Commission.