(91d) Risk Mitigation in Technology Commercialization:  Responsibilities of the Owner, Designer and EPC Contractor

A crucial element of front-end project planning is creating a project risk profile that allows for mitigation of risks that materialize during project performance. One of the first steps is selecting the technology which will provide the basis for the Process Design Package. Herein lies a challenge as too often the technology selection is primarily based on financial metrics to provide the best project payback, while a full risk analysis of available technologies could provide a set of alternatives which insure the project progress is not impeded by inability to properly address potential technology performance and contracting risks which arise later in the project.

These challenges are even more prevalent in new technology commercialization. Each party has a different level of understanding of the underlying risks and varying abilities to manage such. By working together to identify potential risks up front and sharing the responsibility of managing the risks, the parties are more likely to enjoy both the successful commercialization of technology and the on-time and on-budget project completion.

The Designer must provide proper development of a Technology Package with an extended PDP and a Design Team which can effectively support the Contractor and the Owner through the engineering, construction and commissioning. The Contractor team must be experienced in derisking new technology implementation and be able to integrate the capable Design Team into the Contractor’s performance. The Owner must provide leadership during the development of the FEED, guiding the team with a clear understanding of the project goals and risk tolerance.

The presentation will include lessons learned from development of a new technology for production of specialty chemicals through implementation of the technologies at multiple plants over a six-year period. We will look at an example of how the process design firm mitigated risks on new technology commercialization in a developing industry in order to satisfy Owners, Contractors and management.