Construction work on the Sturgeon Refinery site will be hitting peak in the third quarter of 2016, with over 5,000 workers on site. Photo: Aaron Parker

Sturgeon Refinery's construction approach is all about avoiding megaproject perils

Few other projects in Alberta can even compare in scale to the Sturgeon Refinery, currently under construction on a site 45 kilometres northeast of Edmonton. In June, there were 5,200 workers on site as the $8.5-billion project inches toward peak construction, which it will hit at some point in the third quarter of this year. Of every other project currently being built in Alberta, only Suncor Energy’s $13.5-billion Fort Hills oilsands mine boasts a higher price tag and comparably sizable workforce.

And yet the Sturgeon Refinery project could have been even larger than it is now. This is just the first 50,000-bbl/d phase, with two more phases of 50,000 bbls/d each awaiting sanction. Project owner North West Redwater (NWR) Partnership chose to divide the refinery into three parts to keep it a more manageable size. At the same time, it targeted—and achieved—a goal of modularizing 70 per cent of the project to keep down the number of workers on site.

“If we had not done this level of modularization—and this is only a guess—we could have had 20,000-plus people on site, which would have made labour efficiencies drop considerably,” says Doug Bertsch, vice-president of regulatory and stakeholder affairs with NWR, which is a joint venture between Canadian Natural Resources and NW Refining.

Not one project, but many

Of the initial 50,000 bbls/d of bitumen feedstock, 37,500 bbls/d will be coming from the Alberta government as part of its bitumen royalty-in-kind program, with the remainder from Canadian Natural. When the refinery begins operations in late 2017, its chief product will be ultra-low-sulphur diesel. By using carbon capture technology, it will also be sending CO2 through the Alberta Carbon Trunk Line for use in enhanced oil recovery.

Currently, the project is approximately 75 per cent complete, counting on-site work, engineering and off-site module fabrication. There are over 1,000 modules being built for the project—the bulk of them in the capital region, Bertsch notes—with 60 per cent installed and the remainder standing in various states of completion at 10 different mod yards. He estimates that 3,000 people have been working on the project in fab shops.

Aside being divided into three phases, the project’s construction is further broken down into clearly delineated units, each managed as its own separate job site by one of the prime contractors, such as Fluor or PCL Industrial Constructors. This is not so much a single megaproject as a series of bite-sized developments occurring next door to each other.

“That way the Fluors and PCLs of the world can manage their hundreds of people, as opposed to Mega-Contractor Inc. managing thousands of people,” Bertsch explains.

Economies of scale

Of course, there are reasons some still prefer to go with Mega-Contractor Inc. To capture the economies of scale that come with a massive project, NWR pursued horizontal pricing agreement on many common site services like scaffolding, potable water and transport. Rather than allow each contractor to go its own way, the company would instead negotiate a supplier-choice arrangement on something like control valves to avoid having a bewildering array of different makes and models on each unit.

“We negotiate economy-of-scale pricing and then make those services available to each of the contractors, improving their costs and efficiencies,” Bertsch says.

According to Mike Gordon, vice-president of supply chain management, the project has 25 different supplier-of-choice arrangements, as well as seven horizontal pricing agreements for common site services. “This entire fabric knits together and provides us with seamless execution of the project from a contracting perspective,” he says.

Productivity profile

The contracting strategy, however crucial, is just one tool for ensuring construction runs smoothly. Conscious of how quickly productivity on large projects can collapse, NWR is working with a third-party auditor to review time on tools. In particular, an auditor can help pinpoint the various site infrastructure and indirect factors that drive down productivity. The company is constantly reviewing the findings and follows the auditor’s recommendations, Bertsch notes.

Some may have expected costs to go down with the economic downturn, but Bertsch notes that the unit cost of labour on the project has actually not changed significantly. What has changed is the availability of highly skilled trades. With fewer oilsands construction megaprojects around to command the best of the labour pool, the Sturgeon Refinery is seeing improved productivity as it brings on more experienced skilled workers.DSC 7373So far, 60 per cent of the Sturgeon Refinery project's 1,000-plus modules have been put in place, and many are already on site awaiting installation. Photo: Aaron Parker

Great site plan

Tool times and unit costs are one way to measure productivity, but there are also less tangible factors at play. Are the workers happy? Do they actually like coming to the job? These factors also influence productivity, and the company has been working to tackle them through what it calls its Great Site plan. The goal is to make the refinery a place where people are proud to work, Bertsch explains.

Community outreach is key to this plan. When Bertsch spoke to Alberta Construction Magazine, NWR was in the midst of planning a family barbecue event where workers could bring relatives to the site to see the project up close. An admission of $5 per person was charged, with proceeds going to local food banks. Similarly, the company has been recycling over 98 per cent of the project’s construction waste—including wood, concrete, steel, cardboard and plastic—and earning some extra revenue for charitable efforts in the process. Last year, the recycled waste earned $110,000 for local seniors and educational causes.

Workers—and anyone who must travel on local roads, for that matter—also benefit from the project’s robust transportation program. Every day, a group larger than the population of nearby Gibbons, Alta., is picked up by one of the company’s 99 coach buses and brought to site. In total, 3,650 people take part in the company-funded program.

In terms of reducing greenhouse gas emissions and increasing the safety of workers, the benefits of the program are obvious. Adding over 3,500 vehicles to the narrow roads in the area would create a traffic nightmare that would dwarf even the worst rush hour on Deerfoot Trail in Calgary. But the program is paying other dividends as well, Bertsch notes.

“It’s actually a productivity factor for us,” he says. “It allows our craft workers to arrive on site stress-free and knowing that they’ve probably saved $1,100 a month in travel costs too.”


 nwr edmonton operational in autumns 2017Fluor was awarded a Fiatech innovation award for its scaffolding approach on the Sturgeon Refinery project. Photo: Fluor

Scaffolding innovation

Award-winning scaffolding looks remarkably similar to regular, award-less scaffolding. The difference is really all in the planning.

Earlier this year, Fluor was recognized with a Fiatech innovation award for its scaffold work on the Sturgeon Refinery. Working with scaffold provider PERI, the company devised the system for its three sections of the project—the crude and vacuum unit, the LC finer unit and the hydroprocessing unit—where it is doing everything from front-end engineering and design (FEED) work to construction and pre-commissioning.

During the design stage, two scaffolding superintendents worked closely with engineers over a period of 20 months, designing and modelling over 2,000 scaffolds—nearly 80 per cent of the scaffolding required on Fluor’s three units. Everything from design to logistics and field execution were incorporated into the scaffolding planning from the start.

“Traditionally, scaffolding has been constructed in a standard design-as-you-build approach,” explains Jack Penley, president of construction and fabrication with the company. “We’ve seen it grow over the years to about 20–40 per cent of our direct field labour hours, particularly on large-scale industrial projects.”

Call it the modularization of scaffolding. Because the scaffolding is incorporated into the 3-D models during design, attachments and support connections could be built into the structural steel during fabrication. That meant scaffolds did not have to be built up from the ground. Instead, they could be connected directly to the structure, thus avoiding unnecessary congestion at the ground level.

As part of the company’s advanced work packaging, all of the scaffolding was also bagged and tagged in advanced. Because it had been modelled from the start of the project, it could come to the work site prepackaged, with each piece given its own label to speed along assembly. Should the owner need to do any repairs or rework, it can simply use the preplanned scaffolding material list created for construction.

“We’re using this approach on 10 different projects across the globe, including mining and metals, pharmaceuticals, power, and oil and gas,” Penley says. “The project execution benefits this approach delivers are not just limited to one industry or one location, but easily transfer to other types of large-scale industry projects.”


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