Projects at the right time and at the right cost

April 28, 2003, 01:00 CEST

Hydro is putting the final touches to yet another major project, the Grane development in the North Sea, below budget and ahead of schedule. "The most important factor for success is good project definition at an early stage," says Tom Røtjer, senior vice president in Hydro Technology and Projects.

Hydro's technology and project organization has several more major projects – both offshore and on land – in its order books. Successful completion of such projects makes an important contribution to the good financial results reported by the Hydro group.

The offshore project Grane, which is now in the installation and completion phase, is on schedule with regard to the planned production start in October, and is one billion kroner below the budget frame of NOK 16.5 billion. The Fram Vest project is also at an intense phase, and a new module will be installed on Troll C in May.

The largest land project is the modernization and extension of the aluminium plant at Sunndalsøra, followed by Qafco 4 in Qatar and the new Tyin power plant. The requirements for expertise and experience will also be high in the Ormen Lange development – one of the most challenging development projects in the world.

The important groundwork

"The key to successful project execution is good project definition, agreement between all the parties on what the main task involves, and the underlying assumptions. This has been one of the most important success criteria in the Grane project," points out Tom Røtjer, who leads Hydro Technology and Projects.

The groundwork is laid in the earliest phases of the project. "It is important to define the project before the money starts to run. If the groundwork isn't right, the project can go very wrong," says Røtjer.

He also underlines the importance of choosing the right contractors.

"And not just the right contractors – the right team. Running a project is a question of organizing expertise, of putting expertise into a system."

The project should be successful not just for the client, but also for the contractor company: "The project must be worthwhile for both parties for a good final result."

The Hydro model

Hydro's project unit has also taken on major assignments outside of Norway over the years. Whether the project is offshore or on land, in Norway or Qatar, the systems and methodology are the same. And the terminology: "Project people speak the same language in every country," says Røtjer.

He explains that Hydro has developed its own system for completion and testing that was originally designed for offshore activities on the Norwegian shelf, but is used today by major companies in both land and offshore projects. The system has been ideal in the Grane project: "It helps us to save time in the final phase and ensures fast and controlled completion."

In one place

Hydro has chosen to gather all its project expertise in a single organization instead of spreading it over the various business areas.

"We have a strong concentration of skilled and experienced employees," explains Røtjer, who is particularly concerned that the requirements for health, safety and environment are met.

"Wherever we work, health, safety and environment are a major challenge requiring concentration and commitment."