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Heavy OilControlled DocumentQuest CCS ProjectProject Execution PlanProjectQuest CCS ProjectDocument TitleProject Execution PlanDocument Number07-0-AA-5798-0005Document Revision02Document StatusApprovedDocument TypeAA5798-Project Execution PlanControl IDNoneOwner / Author/HDK .LUNSDWULFNIssue Date2014-10-07Expiry DateNoneECCNEAR 99Security ClassificationRestrictedDisclosureNoneRevision History shown on next page
SURE document number-2-Security classification listedhereRevision HistoryRev.REVISION ta stureJeff OshustMarkEwanishinAngusMacQuarrieTim WiwcharSeanMcFaddenOob NdingJohn LostyAnneHalladayApprover002014-09-29Issued for ReviewLeahKirkpatrick012014-10-03Issued for ApprovalLeahKirkpatrickAnita Spence022014-10-07ApprovedLeahKirkpatrickAnita Spence1.All signed originals will be retained by the UA Document Control Center and anelectronic copy will be stored in LivelinkProject Execution Plan02Heavy OilProprietary Information: This document contains proprietary information and may not be partly or wholly reproducedwithout prior written permission from Shell Heavy Oil
SURE document number-3-Security classification listedhereSignatures for this revisionRoleNameOriginatorLeah KirkpatrickDate2014-10-07Signature or electronic reference(email)ReviewerApproverAnita .exe/open/99095935SummaryProject Execution Plan per PS10 Project Execution Strategy and PlanningKeywordsExecution, ORM, VAR4, CCS, PEPProject Execution Plan02Heavy OilProprietary Information: This document contains proprietary information and may not be partly or wholly reproducedwithout prior written permission from Shell Heavy Oil
07-0-AA-5798-0005IMPORTANT NOTICETHE PROJECT PREMISE DOCUMENT (PPD), TOGETHER WITH THE BASIC DESIGN ENGINEERING PACKAGE (BDEP),PROJECT EXECUTION PLAN (PEP), AND THE OPERATIONS READINESS PLAN (ORP), PROVIDES A COMPREHENSIVEAND INTEGRATED SUMMARY OF THE FRONT-END ENGINEERING DESIGN PHASE (DEFINE) STUDY.SHELL CANADA ENERGY, ITS AFFILIATES AND EACH OF THEIR RESPECTIVE OFFICERS, EMPLOYEES ANDREPRESENTATIVES, MAKE NO REPRESENTATION OR WARRANTY AS TO THE ACCURACY OR COMPLETENESS OFTHE INFORMATION CONTAINED IN THIS WORK, AND EXPRESSLY DISCLAIM ANY AND ALL LIABILITY BASED ONOR RELATING TO ANY INFORMATION CONTAINED IN, OR ERRORS OR OMISSIONS FROM, THESE REPORTS OR ANYOTHER WRITTEN OR ORAL COMMUNICATIONS TRANSMITTED OR MADE AVAILABLE TO ANY OF THE JOINTVENTURE OWNERS, OR THEIR AFFILIATES OR REPRESENTATIVES, IN RESPECT OF THE POTENTIAL PROJECTDESCRIBED IN THESE REPORTS. EACH JOINT VENTURE OWNER MUST MAKE (AND WILL BE DEEMED TO HAVEMADE) ITS OWN INDEPENDENT ASSESSMENT OF THE INFORMATION AND THE RELEVANCE AND ADEQUACY OFTHAT INFORMATION.
07-0-AA-5798-0005TABLE OF CONTENTS1.INTRODUCTION . 71.1. Purpose . 71.2. Scope . 72.PROJECT BACKGROUND . 72.1. Business Objectives . 72.2. Location of Quest CCS Facilities. 72.3. Operator of Quest CCS Facilities . 83.PREMISES. 83.1. Opportunity Statement . 83.2. Value Drivers . 83.3. Key Technical and Execution Boundaries . 93.4. Project Givens. 93.5. Critical Success Measures (after one year of operation) . 103.6. Key Opportunity Milestones . 104.DEVELOPMENT CONCEPT & SCOPE . 105.GOVERNANCE . 115.1. Governance Structure . 115.2. Financial Authorities. 115.3. Project Development and Implementation Process . 116.PROJECT ASSURANCE. 136.1. ORM Deliverables by Project Phase . 136.2. Discipline Controls and Assurance Framework . 136.3. Value Improvement Plan . 146.4. Top Quartile Project Delivery . 147.FORMS OF AGREEMENT . 147.1. Background . 147.2. GoA Agreement – Key Terms . 157.3. GoC Agreement – Key Terms . 167.4. Multiple Credit Agreement – Key Terms . 167.5. Agreement Next Steps . 178.FINANCING & INSURANCE . 178.1. Financing . 178.2. Insurance . 178.3. Transition of Responsibilities . 189.RISK MANAGEMENT . 189.1. Risk Management Process . 189.2. Risk Management Tools . 19
07-0-AA-5798-00059.3. Key Risks for the Venture . 209.4. Key Opportunities for the Venture . 2110.PERMITS & APPROVALS . 2110.1. Requirements . 2110.2. Strategy . 2210.3. Schedule. 2211.HSSE & SOCIAL PERFORMANCE . 2311.1. Objectives . 2311.2. HSSE Issues Identified in DEFINE Phase. 2411.3. HSSE Plan for the EXECUTE Phase . 2411.4. Transition of HSSE Responsibilities . 2511.5. Environmental, Social and Health Profile . 25(a)Environmental and Socio-Economic Impact Assessments . 25(b)Social Performance . 2612.PROJECT ORGANIZATION . 2612.1. Venture and Project Organizations . 2612.2. Market Conditions . 3312.3. Ethics & Compliance . 3313.STAKEHOLDER ENGAGEMENT . 3313.1. Transition of External Engagement Responsibilities . 3414.INTERFACE MANAGEMENT. 3415.PROJECT CONTROLS . 4115.1. Objective. 4115.2. Project Controls Organization . 4115.3. Cost Control . 42(a)Work Breakdown Structure (WBS) . 43(b)Cost, Time, and Resources (CTR) Catalogue . 43(c)Value of Work Done (VOWD) . 43(d)Commitment Management . 44(e)Management of Change (MOC) . 44(f)Earned Value Management (EVM). 44(g)Cost and Cash Forecasting . 4515.4. Integrated Planning and Scheduling . 4515.5. Cost Estimating . 46(a)Type III Budget Authorization Estimate . 46(b)Type IV Control Estimate . 4615.6. Probabilistic Risk Analyses . 4715.7. Project Control Tools . 4715.8. Transition of Project Controls Responsibilities and Systems . 4716.QUALITY MANAGEMENT . 49
7.16.8.Quality Overview . 49Discipline Control and Assurance Framework . 49Flawless Project Delivery . 49Technical Integrity Verification . 50Quality Procedures supporting Phases of Project Realization and Execution. 50Construction and Installation Quality . 50Reviews and Audits . 51Transition of Quality Responsibilities . 5117.TECHNOLOGY . 5218.ENGINEERING . 5218.1. Engineering Execution and Deliverables. 5218.2. Design Class considerations . 5418.3. Modularization Considerations . 5418.4. Plant Availability and Reliability Considerations . 5618.5. Codes and Standards . 5819.CONTRACTING & PROCUREMENT. 5919.1. Process and Principles. 59(a)Procedures, Manual of Authority & Governance Model . 59(b)Tendering & Market Approach Principles . 59(c)Project Contractor & Vendor List Development Plan . 59(d)Global Category Management (GCM) LeverageOpportunities . 59(e)Market Intelligence . 60(f)Business Principles . 6119.2. Contracting Strategy . 61(a)Contract Quilt - Capture . 62(b)Contract Quilt - Pipeline . 63(c)Stakeholder Analysis . 64(d)Key Risks/Opportunities . 65(e)Contracting Plan . 6619.3. Procurement . 66(a)Critical Scope . 66(b)Transactional Procurement for the initial project phase . 67(c)Long Lead Items Procurement . 67(d)Standardisation and Variety Control . 67(e)Site Services . 67(f)Procurement Plan . 67(g)Early Supplier Involvement Philosophy . 6819.4. Administration . 68(a)Organisation . 69(b)Contract Models and Conditions of Purchase . 70
07-0-AA-5798-0005(c)Legal/Regulatory requirements, Tax/Customs, MaterialsTraceability . 70(d)Local Supplier Development in Contracts . 7019.5. Project Insurances . 7019.6. Transition of Contracting and Procurement Responsibilities. 7120.CONSTRUCTION . 7120.1. Objectives . 7120.2. Scope and Construction Management . 7120.3. Work Optimization and Productivity . 72(a)Minimize Onsite Construction Work . 72(b)Integrated Turnaround Schedule . 72(c)Manage Construction Interfaces . 73(d)Manage Indirects . 73(e)Business Improvement Initiatives . 74(f)Maximize Constructability . 74(g)Construction Readiness Reviews . 7420.4. Industrial Relations and Labour Management . 7520.5. Logistics & Infrastructure . 75(a)Movement of Personnel. 76(b)Movement of Equipment and Material . 76(c)Infrastructure . 7620.6. Transition of Construction Responsibilities . 7721.INFORMATION MANAGEMENT & TECHNOLOGY . 7721.1. Information Management . 7721.2. Information Technology . 7821.3. Transition of IT and IM Responsibilities . 7922.SUBSURFACE . 7922.1. MMV Baseline Monitoring Activities . 8122.2. Subsurface and MMV Plan Implementation . 8122.3. MMV Technology Development. 8222.4. Operations and Surveillance . 8223.OPERATIONS READINESS . 8423.1. Commissioning & Start-Up . 84(a)Commissioning and Start-Up Philosophy . 84(b)Vendor and Specialist Assistance . 85(c)Schedule Philosophy . 85(d)Phases . 8523.2. Operations Readiness Plan. 8823.3. Transition of CSU and ORA responsibilities . 8924.ACRONYMS . 90
07-0-AA-5798-0005
07-0-AA-5798-00051.INTRODUCTION1.1.PurposeThe purpose of the Project Execution Plan (PEP) is to communicate those plans, assumptions,and decisions that have been made by the Quest Project Team regarding how the Quest Projectwill be implemented.A clear, concise and consistent PEP facilitates decision-making, thereby supporting the projectassurance and governance processes. By providing a common basis for project implementation,the PEP also facilitates alignment and integration among project team members. This commonbasis also enables major changes to the execution plan to be identified and evaluated.1.2. ScopeThe PEP encompasses all phases of project implementation: detailed engineering, procurement,construction, commissioning and startup. In addition, the PEP addresses various activities vitalto a project’s success, including (but not limited to): HSSE, project drivers, assurance,governance, risk management, project organization, interface management, project controls,quality, contracting, procurement, and information management.Although the project premises, the project design basis, and the handover plan to Operations areall touched on in the PEP, these topics are properly addressed in the PPD, BDEP, and ORPrespectively. The PEP makes reference to these and other project documents, which should beconsulted as required to gain a deeper understanding of certain topics, or a broaderunderstanding of the venture as a whole.2.PROJECT BACKGROUND2.1. Business ObjectivesThe Quest CCS Project will reduce GHG emissions from the Scotford Complex. By enhancingthe environmental competitiveness of existing Oil Sands facilities, Quest should enable theunlocking of further development opportunities of the resource base.A full description of the business objectives can be found in the PPD.2.2. Location of Quest CCS FacilitiesThe “CO2 Capture” component of the Quest CCS Project will be located within the existingScotford Upgrader site (both Base Plant and Expansion 1), in Fort Saskatchewan, nearEdmonton Alberta. Construction will encompass both greenfield and brownfield elements. The
07-0-AA-5798-0005pipeline will extend to the north of Fort Saskatchewan approximately 84 km, where the CO2 willbe stored underground in a deep geological formation (Basal Cambrian Sands).2.3. Operator of Quest CCS FacilitiesShell Canada Energy, as operator of the existing Scotford Upgrader facilities (both Base Plant andExpansion 1), will be the operator of the new Quest CCS facilities. The Scotford UpgraderOperations organization will take over operations and maintenance of the capture facilities,pipeline, and wells on behalf of the joint venture owners (Shell, Chevron, and Marathon).Execution of the Quest CCS Project will be managed by Shell’s Projects & Technologyorganization in Calgary Alberta. The Execution team will lead the project until mechanicalcompletion, when it will be turned over to the Quest CSU team which is part of the ScotfordUpgrader Operations organization. The Quest CSU team will lead commissioning and start-upactivities with support from P & T including completion of the 3 government of Alberta tests toreach sustainable operations milestone. Quest CSU team will turn over the operating facilities toScotford Upgrader Operations organization .3.PREMISES3.1. Opportunity StatementThe opportunity statement for this venture, from the most recent Opportunity Framingworkshop in November 2008:“To develop a world-scale CCS demonstration for AOSP, Shell, and Alberta, exceeding 1 Mtpaby December 2015.”3.2. Value DriversQuest CCS will not generate revenues other than via Carbon Credits. The project has assumed aprice of 40 per tonne of CO2 for its economic calculations. However, without considerablefunding by federal and provincial governments, the project cannot break even. It is thereforeessential for the Quest CCS Project to be developed such that CAPEX, OPEX, and GHGefficiency are optimized, resulting in the greatest possible value for AOSP.Although cost is the primary driver for this project, quality is also important. If production andavailability are not attained as planned, project economics will be significantly impacted.The following are the project drivers in order of importance:
07-0-AA-5798-0005Cost – This is the primary project driver, not only because cost is the default driverthroughout RDS, but because the Quest facilities will not generate any revenue except viacarbon credits.Quality – This is the secondary project driver, because part of the government funding istied to sequestering a specified amount of CO2 (10.8 Mt) by a specified date (December2025). If this is not achieved, part of the funding will be pro-rated accordingly.Schedule – The strategy for Quest is to achieve sustained operations (S.O.) by December2015, matching the commitment to government. However, if the execution schedulestarts to slip, money will not be spent to maintain this schedule, as government funding isnot significantly impacted unless S.O. slips past December 2017. S.O. is deemed to havebeen achieved when the following three tests have been passed either together or atseparate times:1. Test A – Capture Unit Capacity – 24 consecutive hours in which Quest captureunit processes a minimum of 2,960 tonnes of CO2 (1.08 Mtpa over 24 hours)from the HMU facilities.2. Test B – Capture Unit Efficiency – 20 consecutive days in which the Questcapture unit processes a minimum of 75% of the total CO2 produced by theUpgrader base and expansion HMU facilities during those 20 days, while runningat an average of at least 50% and a minimum of at least 30% of design rates.3. Test C – Integrated Project Reliability – 30 consecutive days in which the Questproject maintains operation whereby the capture, transportation and subsurfacefacilities operate continuously without shutting down, while running at an averageof at least 30% of design rates.3.3. Key Technical and Execution Boundaries The CO2 Capture facilities involve only the existing Upgrader HMUs (HMU1/2 at BasePlant, and HMU3 at Expansion 1). There is no integration with the Scotford RefineryHMU or with Shell Chemicals.There are no provisions for future capacity increases.SGSI Amine technology (ADIP-X) will be used to capture CO2CO2 Compression will only use commercially proven technologyNo impact on base business performance (CO2 plant modifications must not impactUpgrader availability)3.4. Project Givens Alberta Government funding requires project to be
Heavy Oil Controlled Document Quest CCS Project Project Execution Plan Project Quest CCS Project Document Title Project Execution Plan Document Number 07--AA-5798-0005 Document Revision 02 Document Status Approved Document Type AA5798-Project Execution Plan Control ID None Owner / Author /HDK .LUNSDWULFN Issue Date 2014-10-07 Expiry Date None ECCN EAR 99
