In one of the biggest ever contracts awarded to EPSA, the EPC team joined a group of about 3,000 people building the $10 billion Roy Hill Iron Ore Project, an integrated mine, port and rail development in the Pilbara. With about $3 billion worth of contracts declared, EPSA joins companies including Samsung C&T, Downer EDI, NRW Holdings, John Holland and Brookfield Multiplex on a project that analysts say has the potential to add seven per cent to Australia’s iron ore supply.
The Roy Hill contract comes on the back of EPSA securing work in late 2011 with Bechtel Corporation on the Wheatstone LNG Project, one of Australia’s largest resources projects. Wheatstone is a liquefied natural gas (LNG) plant being developed by Chevron that includes an onshore facility located on the Pilbara coast, a domestic gas plant and two LNG trains.
Bill Thomson has spearheaded EPSA’s EPC development to integrate Cat® power generation products into fully engineered bespoke power stations and says the EPC capability was created to offer end-to-end services. This includes needs analysis, engineering solutions, power generation and plant equipment supply, and turnkey construction, installation and commissioning.
The advent of EPC
From 2010, EPSA recognised the market was shifting towards bespoke turnkey packages and that “our customer buying behaviour was changing. This meant we were taking on increased project activity and risk,”says Bill. “It was also the aftermath of the GFC, so it became important to diversify revenue streams”.
“We were gaining trade in areas where we didn’t have best-in-class systems and processes, so the strategic decision was made to build an EPC turnkey project services capability within EPSA.”
After initially consulting on a framework for the EPC transformation pathway, Bill formally joined EPSA to directly drive development, and lead the immediate negotiation and delivery of the Roy Hill project.
“We were initially focused on the front-end of project lifecycle including tendering, commercial structures and governance to minimise business risk.
We then commenced the maturing of our project management systems and the streamlining of delivery approach to be in the best position to secure and deliver profitable risk-mitigated work.”
An integrated approach
From cost estimation, planning, design and scheduling to procurement, installation and commissioning, the EPC team deals with statutory approval bodies, subcontractors and suppliers delivering end-to-end management.
“The role of EPSA’s core EPC function is to provide overall business strategy, governance and policy direction for major projects,” says Bill.
“Our next major initiative is to consolidate and integrate our business-wide suite of project management procedures inside an enterprise quality management system. We are harnessing the best of existing IP from within EPSA’s regions and business groups, and combining with newly created and refreshed approaches that together represent excellent industry practice.
“Caterpillar and all our dealer partners are very supportive of our EPC approach and see it as part of our strategic future.”
"THE LEGACY OF ROY HILL AND WHEATSTONE IS THAT THEY ALLOW US TO DEMONSTRATE OUR DIVERSE AND STRENGTHENED EPC CAPABILITIES, AND INCREASE BOTH OUR MARKET SHARE IN THE PILBARA AND PRESENCE IN THE RESOURCES INDUSTRY".
Less than two years after launching the EPC strategy and building on the experience of Wheatstone, EPSA won another major contract in November 2013, the Roy Hill Port Temporary Power Contract. A further $20 million contract was subsequently negotiated with Roy Hill at its mine site.
“We also have other EPC projects within the regions and Rental Division, and our cross-business integration approach means we can all tap into existing skillsets, offer new development opportunities to staff, and optimise our business efficiency and sustainability in this fluctuating market,” says Bill.
“For Roy Hill we have a core project office in Brisbane led by Tony Boddice and supported by Construction Manager Wayne Brown, Engineering and Commissioning Manager Brad Fox and Project Administrator and Draftsperson Amanda Hudson. All contributed to the Roy Hill contract development, negotiation and start-up phase, which was crucial to our success. The team now includes other EPSA engineering and project delivery personnel, new site-based recruits, sub-contract partners and suppliers.