Developing Sophisticated Transport System for Crude Oil
Cairn India wins Best Project of the Year 2011 in the runner-up category for the Mangala Development Pipeline Project for project management excellence.
A project of massive dimensions that encountered innumerable physical and engineering challenges during planning, designing, and execution successfully achieved its goals by applying project management at every step of the way. Cairn India’s “Mangala Development Pipeline Project” in west India won the PMI India Project of the Year 2011 runner-up award at the PMI India National Conference in September.
According to Cairn India, a leading oil and gas exploration and production company in India, the 670-km-long Mangala Pipeline Project is the world’s longest continuously heated and insulated pipeline. Construction began in June 2008, and the project was completed and commissioned in May 2010. So far, 591 km is complete and has already been commissioned to export waxy crude oil from Barmer to the point of export in Salaya, Gujarat. At full capacity, it will throughput about 20 percent of the country’s total domestic production and meet 8 percent of its crude oil demand.
Key Project Features and Challenges
The pipeline runs through a landlocked region of western India. One of the biggest challenges that the project team faced was to acquire rights of use (RoUs) to the land through which the pipeline passed. The project team had to negotiate for RoUs for farmland in over 250 villages in Rajasthan and Gujarat from over 40,000 landowners. The underground pipeline uses a sophisticated Skin Effect Heat Management System (SEHMS) that keeps the crude oil at 65 degree centigrade through the pipeline.
Some of the salient features of the completed phase of the 24-inch diameter insulated and heated underground pipeline project are as follows:
- An 8-inch gas pipeline from Raageshwari deep gas field running parallel to the 24-inch pipeline for supply of fuel to power the SEHMS stations, and for Viramgam and Salaya stations.
- Pipeline designed to throughput up to 175,000 barrels per day, with the potential to enhance capacity to 240,000 barrels per day.
- About 25-km insulated and heated 10-inch spur pipeline to supply oil to Indian Oil Corporation at their Radhanpur intermediate terminal in the Mundra Panipat Pipeline, including at the dispatch terminal at Radhanpur with tank farm and export pumping facilities.
- About 2.5-km insulated and heated 24-inch spur pipeline and dispatch terminal to supply oil to ESSAR, a consumer.
- About 8-km insulated and heated 24-inch spur pipeline and dispatch terminal to supply oil to Reliance Industries, a consumer.
- Interconnection with the Gujarat State Petronet Ltd. gas grid as an alternate, back-up source of gas.
- One intermediate pumping station at Viramgam.
- 33 aboveground SEHMS stations.
- Two intermediate pigging stations.
The pipeline network crossed over 780 roads, railways, canals, rivers, and other water bodies; over 200 km of desert; over 100 km of rocky terrain; over 24 major river crossings; and an 8-km flood channel at an average depth of 3–4 m under the sand. Laying of such a long SEHMS with so many physical hurdles on its path led to several technical challenges. It meant multiple iterations in the concept design and construction methodology. The team sought the help of premier engineering institutes in the country and independent consultants from the United Kingdom to devise the right techniques for design and construction.
The delay in obtaining RoUs in Rajasthan resulted in shifting construction activity to Gujarat during the peak monsoon season and influenced the construction schedule.
How Project Management Helped
One of the first tasks the Cairn management undertook was to set up a dedicated task force with a mandate to resolve all project challenges. It set out to put together a team of project professionals within the company and from the pipeline industry the world over to join the project team. The head of the team was the project director who was part of the Cairn management. There was a dedicated task force responsible for resolving all critical issues and noncritical activities related to the project. The team included a project controls manager who was responsible for monitoring the project and providing feedback to the project manager for necessary actions. A high-level project planning and control procedure was developed to define the process to monitor and control work progress. It included progress measurement procedure, progress reporting procedure, project cost control procedure, and project change control procedure. This proved to be an effective way to manage the project.
The key project management areas are discussed below:
Cairn India carried out detailed studies to understand the various options for exporting and transporting the crude oil that is in a highly waxy and solid state from the landlocked Barmer region. It took close to two years of extensive studies before the company finalized the pipeline network as the right transport model. It was crucial to do this because it had huge implications on the project scope definition.
This followed further studies on pre-FEED (front-end engineering design) for three months to corroborate the feasibility findings of the transport model selected. The company then conducted a full FEED phase for seven months during which most of the basic features of the project were frozen. The work breakdown schedule (WBS) was also defined that helped breaking down the project into manageable entities and awarding of contracts and procurement orders for each entity separately.
The team resorted to fast-tracking and compression of schedules to allow the project to progress without any significant delays. One of the major challenges that threatened to scuttle the schedule was the difficulty in getting land clearances in Rajasthan. The construction schedule had to be modified and resources moved to Gujarat instead of Rajasthan to avoid further delays. The other unforeseen development was the extra time it took to lay the pipeline underground in three segments of Gujarat. Additional resources had to be mobilized to achieve the original time schedule. A planned approach from the management to the project team level, regular monitoring and baseline revision of the schedule whenever needed, and fast decision-making helped in effective schedule management.
The finance manager, who reported to the project head, was accountable for monitoring the cost of the project and provided financial performance report to the project director and project manager. The finance manager was assisted by a dedicated team and a cost controller.
An independent quality group, headed by the project quality manager, assisted the project management in implementing and maintaining the project quality management system. The project quality manager reported to the head midstream and was responsible for quality management. The project quality group included the project quality manager, project quality representatives, project inspection coordinator, and on-site inspectors. The team followed a well-defined project quality policy that complied with the corporate quality policy of Cairn India.
Health, Safety, and Environment Management
The project team followed industry best practices to ensure high health, safety, and environment (HSE) standards at worksites. The result was 10 million man-hours without any time lost due to injuries. The diverse geographical terrain through which the pipeline passed gave rise to several HSE hazards, making its monitoring and management extremely crucial. Some of the key elements of the HSE strategy were meticulous job planning, engaging contractors, and local communities; effective workplace safety supervision; periodic HSE performance monitoring; and inculcating safe work habits.
Human Resource Management
The project human resources processes were closely aligned to that of the company’s corporate policies. For the project, a “projectized organization structure” was selected with the project director at the top of the leadership pyramid. The larger project was broken down into smaller manageable projects, each under the direct responsibility of a project manager with assistance from the project management office.
Cairn India followed a joint operating agreement with its joint venture partner, the state-owned Oil and Natural Gas Commission for an effective communications strategy. The project involved several stakeholders, which necessitated evolving a stakeholder management plan to communicate with external stakeholders. Activities related to corporate social responsibility were also under the communications team.
The pipeline route
The risk management process cascaded through the Cairn India Group and function-specific risk management subcommittees, with independent and cross-functional membership. These subcommittees addressed risks pertinent to the asset, project or function, and provide regular reports to the risk management committee. The risk management committee reviewed these reports and other risks captured by the subcommittees. Risks were captured through a risk register that each key functional team maintained. These risks were then classified using a Cairn India proprietary risk classification grid. The organization had a three-tier risk governance structure with the company’s board as the final authority.
The main objectives of the project contract and procurement management were to avoid any delays because of non availability of materials and enable cost optimization. Some of the key challenges in material management were maintaining quantum and quality of materials, identifying the right sourcing partners, on-time order placements, progress tracking and monitoring post-order placements, materials inspection, safe transportation, and storage.
The project team overcame the innumerable challenges it faced with thorough planning, regular monitoring of the progress based on the work breakdown structure identified, and an effective communication program. A projectized team structure with a senior executive as the head of the team, a project management office, and a dedicated task force helped cut delays in decision-making and deal with unforeseen challenges as the project progressed. The effective end-to-end application of project management in the project received recognition from PMI India. The Best Project of the Year runner-up award was received by Mr. H.P.Bhalla, director – Special Projects; Mr. Manu Kapoor, director – Corporate Affairs; and Mr. Sidharth Balakrishna, projects manager, during the PMI India National Conference in September 2011.