2/12/2019 Modularization: The key to success in today’s market

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December 2016 (/magazine/2016/december-2016)

SPECIAL FOCUS: PLANT DESIGN, ENGINEERING AND CONSTRUCTION
(/MAGAZINE/2016/DECEMBER-2016#SPECIAL-FOCUS-PLANT-DESIGN-
ENGINEERING-AND-CONSTRUCTION)

Modularization: The key to

success in today’s market
The world economic order is rapidly changing. A transition is underway, led by the sudden collapse of
crude oil and natural gas prices. Here, the pros and cons of modularization vs. eld construction are
outlined.
Rentschler, C. (/authors/e/engineering-consultant/rentschler-c), Engineering Consultant; Mulrooney, M. (/authors/s/shureline-
construction/mulrooney-m), Shahani, G. (/authors/s/shureline-construction/shahani-g), ShureLine Construction
The world economic order is rapidly changing. A transition is underway, led by the sudden collapse of
crude oil and natural gas prices. Major corporations are being restructured, and major capital projects
are being reevaluated in a market where supply, demand and pricing have suddenly become uncertain. In
addition, developing countries are quickly building new plants and infrastructure to support a rapidly
growing middle class that demands all the bene ts of modern industrial production.

At the same time, hydrocarbon feedstock is being discovered in increasingly remote geographies. In such
places, infrastructure is usually lacking and the climate can be extreme. These issues are exacerbated by
a construction labor market that has also become unpredictable. In some places, an abundance of
construction labor exists. Unfortunately, this is usually not where the projects are being developed.

In this environment, only the most nancially sound projects will be able to move forward. Today,
successful projects tend to be smaller, with stringent cost parameters and extremely tight project
schedules. To meet project quality, schedule, cost and risk, it is essential to establish the optimum project
execution strategy.

Here, the pros and cons of modularization vs. eld construction are outlined. By fabricating key
components in a controlled environment, it is possible to minimize risk, improve quality and stabilize eld
construction costs, which are typically high and variable. Modularization also facilitates plant startup
because piecemeal checkouts can be made in a controlled environment.

Modularization strategy
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Modularization or prefabrication requires signi cant planning before moving forward. Many facets must
be considered to make project execution e ective. Su cient time must be allocated to assess the various
options, and to bring all the elements of modularization together.

The authors have experience on major projects in which not enough time was allocated to evaluate
modularization options, and the concept had to be abandoned because the schedule became critical.
Ironically, modularization (which is usually associated with shorter schedules) was not considered a
viable option in this instance because there was not enough time to evaluate all options. Modularization
can certainly shorten time in the eld, but awareness must exist of all upfront planning and options to be
considered.

Drivers for modularization. Modularization may be considered for many reasons, including:

Limited availability of skilled and a ordable labor

Remote site access and severe site weather constraints
Desire to minimize eld time and reduce construction costs
Reduction of site waste
Improvement in quality due to controlled environment
Extensive factory acceptance testing (FAT) required
Repeatable construction that lends itself to duplication
Equipment replacement at an operating plant where downtime is not possible.

A cold weather environment may pose a problem for obtaining skilled and a ordable construction labor.
The more reasons that support modularization, the more convincing the argument for management to
agree with this approach will be.

On the other hand, some projects do not lend themselves to modularization. For example, if reasonably
skilled and a ordable construction labor is available and the site construction is considered routine, then
the right decision may be to not consider modularization. All factors must be considered in deciding
whether to pursue modularization. Some factors, such as cost and schedule, can be quanti ed. Others,
such as risk and quality, must be assessed in qualitative terms based on experience.

Types and sizes of modules considered. Since a huge trade-o exists between module size and
shipping costs, considerable thought must be given to module size and con guration. If downtime at an
operating facility cannot be tolerated, then the right decision may be to use the largest shippable module
possible.

In the authors’ experience, an entire modularized ethylene furnace was shipped to minimize downtime in
an operating plant in which an existing furnace was being replaced. More typically, however, the tradeo
between shipping and site assembly costs comes to bear in con guring the modules. Also, access to
waterways and rails becomes a huge factor in determining module sizes. Road restrictions limit size-
based jurisdiction restrictions, so alternate shipping means are important. Some typical module types
include:

Mega-modules (over 500 t; require special shipping)

Large and intermediate modules (require barge or rail)
Truckable modules
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Pipe rack modules

Skid-mounted equipment modules
Hybrid modules (partially completed in the shop and fully assembled in the eld).

On any given project, there will likely be multiple types of modules based on the project’s unique features.
Some examples of skids fabricated in the US and the Middle East are presented in Figs. 1 and 2. Fig. 1
depicts a ue gas conditioning module that is part of a large process plant. This module was fully
fabricated in a local shop in the Middle East to achieve the desired schedule. Fig. 2 shows a railcar
loading skid complete with strainers, owmeters, pressure regulators and prover connections for use in
bulk liquid terminal operations.

(/media/3012/shahani-plant-design-engineering-construction- g-01.jpg)
Fig. 1. Flue gas conditioning module. Photo courtesy of Descon Engineering.

(/media/3013/shahani-plant-design-engineering-construction- g-02.jpg)
Fig. 2. Railcar loading skid with strainers, owmeters, pressure regulators and prover connections for use in bulk liquid terminal operations.
Photo courtesy of ShureLine Construction.

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Contracting strategy for module fabrication. Several questions must be answered on this topic. For
example, is it best to build the modules in a low-cost country, knowing that this could increase shipping
costs? Should multiple module fabricators be considered in light of workload and schedule, and could this
pose interface problems if the work is not closely coordinated? Should the module builder be given the
scope of buying all material so that material delay does not become a factor for the module builder, which
could increase costs? If schedule is critical, it may be wise to keep as much scope with the module
builder so that no hindrances to performance emerge, since this strategy has a cost premium.

It is particularly important to conduct proper due diligence of the module fabricators being considered.
For the most part, the success of the project will rest largely on the performance of the module
fabricator. In considering a large international job, this could involve the evaluation of 30–50 fabricators.
Even on a smaller project requiring modularization, 20 or more interested bidders could easily emerge.
Examining each company’s past performance is a key indicator of their capabilities. Also, it is important
to see how much work they are capable of performing, and how much work must be subcontracted.
Reducing interfaces is key to ensuring project success.

As is often the case, many of the decisions regarding modular fabrication will be a tradeo between
schedule and cost. Considering that the modules are a key driver in the overall project, the authors’
perspective is that less interference with the module fabricator’s work will make for a better project. Of
course, continual performance monitoring is critical to ensure that all facets of the modularization remain
on track.

Engineering scope and planning. The interface between the owner; the engineering, procurement and
construction (EPC) contractor; and the module builder is crucial. Thought must be given to how
engineering will be addressed. Experience shows that piping and instrumentation diagram (P&ID)
nalization often lags; therefore, steps must be taken to move this part of the process expeditiously. A
late hazardous operations (HAZOP) assessment can have a drastic e ect on design; for this reason, such
reviews must be timely.

Since 3D models are the norm, a plan must be established for how the design will be coordinated. A joint
team between the engineering organization and module fabricator is an option. The module fabricator
often has the best ideas regarding module design details, so their involvement is crucial. If the owner has
basic data for the process or skid, one possibility is to partner with a fabricator with design experience
and capabilities with modules.

With this approach, the fabricator completes the production design based on nal P&IDs and
speci cations. Utilizing the latest plant design suites, all of the steel, equipment, piping, electrical and
instrumentation, etc., are designed and integrated in a common platform. With collision checking,
walkthrough capabilities and automatic drawing generation, the bene ts include reduced engineering
and design hours, along with quality deliverables released for construction.

Another possibility is that tie-in points are provided to the module fabricator, and the design team
provides the detailed module design within guidelines of the overall engineer. The worst-case situation is
where the engineer hands a set of drawings to the module fabricator without signi cant involvement
from the fabricator.

Input from the construction and operations crews is crucial during engineering. An unacceptable
outcome of module fabrication is a module that is not constructible in the eld, or does not satisfy
operational requirements. Also, the possibility of saving project costs exists by considering some form of
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hybrid models during the course of design. For example, the original plans may call for a huge vessel to
be included in the module. It may be prudent to have this vessel delivered separately to the eld due to
size/weight considerations, or because it may be completed late in the overall project schedule. Flexibility
in design approach should be the watchword in module design, since the best ideas will surface
throughout the design process.

Coordination of material and equipment. One reason that modularization is seeing a renaissance is
because tools exist to facilitate the coordination and integration of components. Known as building
information modeling (BIM), the software enables the proper tracking of materials. It is crucial that
material is ordered on time, and that components are delivered to the right place (either the module shop
or the eld) according to the project schedule. Documentation is also crucial, so all paperwork must
follow material.

Coordinating material can be particularly challenging if some material is free-issued to the module
fabricator, and if the fabricator is also counted on to provide material. On a single drawing, there could be
material/components being sent in various directions: owner/EPC to fabricator; owner to the eld; and
fabricator buying and sending connecting hardware to the eld. Drawings must be clearly marked and
managed to ensure that all components are delivered to the proper location as per the schedule.

Cautions
The idea of utilizing modules on a given project is the result of one or more of the aforementioned
drivers. In every case, the decision is being made to overcome some perceived obstacle on the project.
The module fabrication (and implementation) itself can turn into a nightmare if proper precautions are
not taken. Aspects to consider include:

Ensure the overall schedule scope is big enough. While the modules themselves will reduce eld
time, care must be taken that enough overall schedule time is allotted for proper planning.
Con rm that the design is well-coordinated and timely. As previously noted, all of the key parties
involved will want to submit input to the design.
The authors have been involved in projects where so much input is being considered that engineering
never ends. This will kill the schedule.
Do not tie the hands of the module fabricator. Owners and EPCs are often eager to be involved in
every detail of the module fabricator’s work. The authors advise readers to let the experts do what
they do best. Being too prescriptive will tie the fabricator’s hands and create schedule problems. If the
module fabricator buys as much material as possible, this may also reduce interfaces.
Get the right modules to the eld at the right time. This sounds like straightforward advice, but
there have been numerous occasions where construction was halted because the pieces are provided
in the wrong order.
Preassemble side-by-side modules at the fabricator. The best way to ensure things work together
smoothly in the eld is to preassemble modules at the fabrication facility. This permits tie-in problems
to be resolved before they arise in the eld.

Pros and cons of modularization

Various obstacles can impede the widespread use of this technique, but likely pros with modularization
include:

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Less labor in the eld, particularly where construction labor is limited

Controlled conditions for construction improve quality and reduce waste
Fewer jobsite environmental impacts
Reduced requirements for onsite materials storage
Increased worker safety through lower exposure to eld hazards
Improved schedule by parallel execution of construction tasks
Permitting and civil work can proceed in parallel with shop fabrication.

Likely cons with the modularization technique include:

Considerable upfront planning needed to avoid engineering delays

Coordination of engineering activities becomes complex with multiple parties
Material control can become more cumbersome
Shipping costs and challenges rise to a new level.

Recommendations
In today’s highly demanding chemical () process industry, modularization can enhance project
development and execution. By fabricating key components in a controlled shop environment, it is
possible to accelerate schedule, minimize risk, improve quality and control uncertain eld construction
costs. Modularization also facilitates plant startup.

Jobsite environmental and safety performance can be improved, and permitting and civil work can be
accelerated. Considerable upfront planning is necessary, and coordination of engineering activities with
multiple parties must be carefully managed. HP

LITERATURE CITED

1. LePree, J., “Is modular right for your project?” Chemical Engineering, January 2016.
2. Palluzi, R., “Consider modular pilot-plant construction,” Chemical Processing, January 26, 2010.
3. VIATechnik, “Pros and cons of prefabrication and modularization techniques,” online:
www.viatechnik.com
4. FMI Corp., “Prefabrication and modularization in construction—2013 survey results,” 2013.
5. The Modular Building Institute, “Improving construction e ciency and productivity with modular
construction,” 2010.

The Authors
Rentschler, C. (/authors/e/engineering-consultant/rentschler-c) - Engineering Consultant,
Akron, Pennsylvania
Carl Rentschler, P.E., is an engineering consultant specializing in project management,
business development, client relationship management and procedure development.
He has over 40 years of varied engineering and management experience in the energy

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2/12/2019 Modularization: The key to success in today’s market

and petrochemical industries. He holds a BS degree in civil engineering from Penn

(/authors/e/engineering-
State University and a master of engineering degree in civil engineering from Cornell
consultant/rentschler-
c) University.

Mulrooney, M. (/authors/s/shureline-construction/mulrooney-m) - ShureLine Construction,

Kenton, Delaware
Mike Mulrooney is the project and design services manager at ShureLine Construction.
In addition, he serves as the quality control manger of piping fabrications. Prior to
joining ShureLine in 2000, Mr. Mulrooney was an engineering designer for DuPont,
assigned to plant capital projects. With more than 28 years of experience, he
(/authors/s/shureline-
specializes in the design of piping systems for various industrial applications and
construction/mulrooney-
m) chemical processes. He holds a BS degree in engineering from Widener University.

Shahani, G. (/authors/s/shureline-construction/shahani-g) - ShureLine Construction, Kenton,

Delaware
Goutam Shahani is Vice President of Sales and Marketing at ShureLine Construction.
Previously, he was Business Development Manager at Linde Engineering in North
America. With more than 30 yr of industry experience, Mr. Shahani specializes in
industrial gases for the energy, re ning and chemical industries. He holds BS and MS
(/authors/s/shureline-
construction/shahani-degrees in chemical engineering, as well as an MBA degree.
g)

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