Midstream refers to the points in the oil and gas production process that fall between upstream and downstream. These operations include the storage, processing, and transportation of petroleum products. While a large function of these activities involves pipelines, there are many other functions, such as compressor stations, pump stations, fractionation, refrigeration, docks, and transportation/logistics (e.g. rail spurs, tank loading, and unloading).
Midstream capital projects are often schedule-driven due to commercial agreements in place with the clients of project owners. Consequently, many project owners are choosing to execute their projects using the engineering, procurement, and construction (EPC) project delivery system, as this method often offers a higher degree of schedule certainty.
However, not all EPC contractors have the same degree of capabilities, knowledge, and experience, making the selection of a contractor an important factor in overall project success. Below, we have provided a guide to the most important EPC contractor qualifications for midstream projects.
A Guide to EPC Contractor Qualifications for Midstream Projects
When looking to leverage an EPC contractor for midstream capital projects, there are several key qualifications to look for, as detailed below.
Full In-House Capabilities From Concept to Startup
Contractors with full in-house capabilities—including front-end planning, detail engineering and design, procurement, fabrication, and construction—can provide a cohesive, integrated, and collaborative workflow. This allows EPC contractors to identify and mitigate project risks as early as feasibly possible and optimize the sequencing of activities to ensure timely completion.
Collaboration and communication across all functions and disciplines help the entire team align on a clear and robust goal, setting the framework for well-defined roles and responsibilities. This cohesion can also ensure consistent quality control and safety measures are met across all project phases.
Strong Front-End Planning Capabilities
Scope definition is arguably the most important procedure in the capital project life cycle. The success of any capital project relies heavily on proper planning and scope development. Early and strong scope definition is critical for the success of capital projects of all types and sizes. Poor or late scope definition can lead to significant changes to the scope and increased change orders, which can result in significant cost and schedule overruns.
Well-Established Procurement Department and Procurement Partnerships
Working with an experienced EPC contractor that has a highly developed in-house procurement department can greatly reduce the schedule and cost risks associated with procurement.
Furthermore, EPC contractors who have well-established partnerships with trusted suppliers and vendors can leverage these relationships to mitigate any procurement challenges in the event of supply chain disruptions to help maintain schedule certainty.
Strong Safety Ratings and Safety Programs
Safety is non-negotiable, particularly in the oil and gas industry. Look for contractors with strong safety ratings, such as experience modification rate (EMR) and total recordable incident rate (TRIR), and robust safety culture at all levels. At a minimum, contractors should utilize Job Safety Analysis (JSA) tools and have a Behavior-Based Safety program in place. They should also have proper work processes or programs in place to properly identify and eliminate or mitigate safety risks associated with extra hazardous work.
Practical, Construction-Driven Approach
EPC contractors should place a heavy emphasis on constructability and maintainability, particularly when projects involve adding to existing infrastructure, and they should also involve construction personnel early in the project life cycle to reduce rework, schedule changes, and cost overruns.
Constructability should be applied to all project phases, and the overall project design and project schedule should be construction-driven. The design and overall layout of equipment, piping, components, and instrumentation should promote construction feasibility and efficiency as well as future site maintainability. Tools, such as 3D laser scanning, can greatly aid in this effort.
Well-Established Quality Department
Well-established quality departments that incorporate Total Quality Management, established quality assurance and quality control procedures, and strong communication skills to ensure quality alignment can reduce rework resulting from poor quality materials or workmanship. Quality departments should work closely with the procurement department to ensure all materials and components meet the specified quality standards.
Client-Oriented Mindset
At the end of the day, you want the EPC company you're working with to view your vision and goals as their own. Look for EPC contractors that place a heavy focus on gaining client trust and measure their own success by the level of client satisfaction.
Other Important EPC Contractor Qualifications for Midstream Projects
- A strong record of success executing midstream capital projects
- Detailed knowledge of midstream operations
- Robust project management, project controls, and reporting capabilities
- The ability to provide accurate project bid and contract estimates
- An integrated location, such as a dashboard, to view all project data in one place to provide all parties with full transparency
Additional Considerations
Some other considerations project stakeholders must be aware of before executing their midstream capital projects include:
- Design specifications specific to location and application
- Governing authorities and requirements (eg, DOT, Coast Guard, Port Authority)
- Land access and right of way issues
- Permitting (local, state, environmental)
- Labor requirements:
- Do workers need to be certified to work inside the plant or on the project?
- Is the project site along a waterway?
- Do you need a Transportation Worker Identification Credential (TWIC) card?
- Availability of local workforce
Your Trusted EPC Contractor for Midstream Capital Projects
For more than 30 years, H+M Industrial EPC has provided leading capital project execution services to the energy, chemical, and terminal and logistics industries. Our strong expertise in midstream operations, experience executing “inside the gate” midstream projects, proven EPC approach, established work processes, and highly experienced team allow us to complete your capital projects on time and within budget. We will work closely with you to bring your vision to life while prioritizing the success of your projects with every decision we make.
The H+M Industrial Team
For over three decades, we have provided best-in-class capital project management services to Energy and Chemical industries through our proven EPC approach. We are dedicated to providing trust, experience, and efficiency through all stages of engineering, procurement, and construction--on budget and on time.
Partnering with H+M Modular
H+M Modular, a division of H+M Industrial EPC, specializes in custom fabricated equipment, modules, and skids for energy and chemical industries. The approach emphasizes the potential for decreased risk through more controlled fabrication, leading to enhanced quality and safety, reduced labor costs and construction times, improved labor availability, and solutions to geographic challenges. We are dedicated to providing trust, experience, and efficiency through all stages of traditional and modular construction projects using our proven EPFC approach, If you're considering modular fabrication, we invite you to connect with us to learn about how modular solutions can improve project outcomes.
