PP&M International Advisory Council Meeting 2009 BEST PRACTICE INTEGRATED CONSTRUCTION DELIVERY

1. PP&M International Advisory Council Meeting 2009BEST PRACTICE INTEGRATED CONSTRUCTION DELIVERY R. Ingrosso - Rome Oct. 2009

2. CONTENT NEW PROJECT EXECUTION MODEL WORKPROCESSES AND IT TOOLS AREAS OF IMPROVEMENT/DEVELOPMENT 2

3. CONTENT TECHNIP ITALY AT A GLANCE NEW PROJECT EXECUTION MODEL WORKPROCESSES AND IT TOOLS AREAS OF IMPROVEMENT/DEVELOPMENT 3

4. NEW PROJECT EXECUTION MODEL - BACKGROUND Construction is the most critical phase along project execution: SEVERE RISKS FOR TP ARE CONCENTRATED IN THERE. In the recent past market has been overloaded by extraordinary large projects. CONSTRUCTION SUFFERED more than other production processes DUE TO SHORTAGE OF: Organization & Management Engineers, Supervision and Foremanship Qualified Manpower Subcontractors claimed the NON TIMELY AVAILABILITY OF FREE ISSUE DELIVERABLES by Engineering Contractors as the only cause of their misperformance. 4

5. NEW PROJECT EXECUTION MODEL TIMELY PROJECT COMPLETION WITHOUT DISPUTES Subcontractor Subcontractor Subcontractor Proactive Construction Management Hands-in Workface planning, monitoring and orientation TPIT 100%FID CWP’s DP’s Construction Execution Plan – Contracting Strategy – Workfront Control Delivery Engineering Strategy Project Schedule Construction critical paths and sequence analysis Start-Up Package approach The make it happen Factor – FEED fully validated Prior EPC stage

6. NEW PROJECT EXECUTION MODEL - PRINCIPLES CHANGE THE WAY TO WORK CONSTRUCTION IS THE CENTER OF THE PROJECT AND THE INTERNAL CLIENT OF THE ENTIRE PRODUCTION CHAIN DELIVERY ENGINEERING PROCESS STARTING FROM CONSTRUCTION SCHEDULE/SEQUENCE REQUIREMENTS, DEFINE AN INTEGRATED DETAIL DESIGN & PROCUREMENT STRATEGY AIMED TO FEED CONSTRUCTION IN ORDERLY, SEQUENCED, SELECTIVE AND TIMELY MANNER DELIVERY PACKAGES CONSTRUCTION SEQUENCE & SCHEDULE 100% MAT AVAILABLE 100% IFC DLV’s CONSTRUCTION WORK PACKAGES 6

7. NEW PROJECT EXECUTION MODEL - PRINCIPLES TP ENTER IN THE CONSTRUCTION MANAGEMENT COCKPIT TO MONITOR AND IF NECESSARY RE-ORIENT THE CONSTRUCTION ORGANIZATION AND EXECUTION TO ACHIEVE TARGETS IN TEMS OF QUALITY, COST AND SCHEDULE RE-THINK CONSTRUCTION SUB-CONTRACT PACKAGE TO GIVE TO TP THE RIGHT TO EXERCISE SUCH A PROACTIVE ROLE DEFINE CONTRACTING STRATEGY CONSIDERING THE SUBCONTRACTOR’S CHARACTERISTICS IN VARIOUS GEOGRAPHICAL AREAS AND CONSEQUENTLY DEFINE CONTRACTUAL SCHEMES AND SUBCONTRACT TYPES RE-THINK CONSTRUCTION H.O. AND SITE ORGANISATION, WORKPROCESSES AND IT TOOLS 7

8. CONTENT NEW PROJECT EXECUTION MODEL WORKPROCESSES AND IT TOOLS AREAS OF IMPROVEMENT/DEVELOPMENT 8

9. RE-ENGINEERING OF CRITICAL WORKPROCESSES HOME OFFICE P&ID’S - PIPING DESIGN – PURCHASING - PREFABRICATION STEEL STRUCTURES DESIGN AND PURCHASING U/G PIPING DESIGN AND PURCHASING INSPECTION PLANNING AND MONITORING CONSTRUCTABILITY SITE PLANNING AND PROGRESS MEASUREMENT PRODUCTIVITY CONTROL QC PLANT HANDOVER 9

10. PIPING CHAIN - Forecast Run “At a glance” Mechanical Subcontracting Workload Subcontractor WBS Priority SPMATERIAL Forecast Run T=∞ T=0 T=0+Dt Shortage IFC Sketch 100% T=0+Dt IFC Sketch 100% T=0 PRECONDITIONSP MAT. CONTINUOUSLY UPDATEDBY ALL USERS: ENGINEERS (BOM, MR’s), BUYERS (PO’s), INSPECTORS (FORECAST DELIVERY DATES & RN’s), SHIPPING (ROUTES) TO TRACK IN “REAL TIME” THE STATUS OF ALL MATERIALS

11. PIPING CHAIN - FORECAST RUN INPUT DATA • MECHANICAL SUBCONTRACTING • WORKLOAD BY EACH SUBCONTRACTOR WITH MATERIAL’S BREAKDOWN • WBS’S PRIORITY

12. PIPING CHAIN - FORECAST RUN WORKFLOW ISO IFC Forecast Run t=∞ (Based on Approved PO) Material to be Purchased Isos 100% Available & Reservable Forecast Run t=0 (Based on “Only Inventory”) Material Issuing to Subcontractor Reservation Run Forecast Run t=0+Dt (Based on Approved PO) Isos 100% Available & Reservable t=0+Dt • Engineering • Engineering + Construction • Construction

13. STEEL STRUCTURES WORKPROCESS • STEEL STRUCTURES MANAGED AS ITEMS AND BROKEN DOWN PER DELIVERY PACKAGES (DP’s) • FOR EACH DP, THE RELEVANT MARK LIST IS ASSOCIATED IN SP MATERIAL • MONITORING AND EXPEDITING ACTIVITIES BY DP, INCLUDING SUB-SUPPLIERS • DELIVERIES ORGANISED PER DP

14. STEEL STRUCT. WORKPROCESSMARKS MANAGEMENT IN SMARTPLANT MATERIAL

15. STEEL STRUCT. WORKPROCESSMARKS MANAGEMENT IN SMARTPLANT MATERIAL 3) BOM of Marks attributes 1) Example of input file for loading marks. (15 days before IRC issue) 2) BOM of Marks 4) BOM of Marks Option for loading by category.

16. Material Management Overview ALL COMPANY PO’s WITH DETAILS IN A SINGLE DOCUMENT AUTOMATICALLY GENERATED 16

17. Precast/prefabrication Modularization Segmental erection Stick built construction Equipment erection data & CWP’s list and release plan CONSTRUCTION MATRIX & CWP’S Discipline Workclasses Sub workclasses PRODUCTIVITY WBS Preconditions necessary progress of predecessor activities BASELINE SCENARIO Risks Mitigation measures WHAT IF Follow-up of implementation by Project Team OUTCOMES WORKPROCESSES - CONSTRUCTABILITY

18. Construction Critical path analysis Start-up packages Definition Overall Project schedule (L3) Scheduled progress Curves per work-class CWP’s definition & release plan SUBCONTRACT AWARD Progress Build-up L4 Planning WORKFACE Field installation Work Packages & release plan PLANNING Work Front WORKPROCESSES – SCHEDULING

19. CONTENT NEW PROJECT EXECUTION MODEL WORKPROCESSES AND IT TOOLS AREAS OF IMPROVEMENT/DEVELOPMENT 19

20. AREAS OF IMROVEMENT/DEVELOPMENT • ENGINEERING • LINE LIST WORKFLOW IN SPF MUST BE IMPROVED • PIPING CLASSES PUBLISHING IN SPF • WORKSHARING IN MULTI-CENTER EXECUTION FOR SP3D • PROCUREMENT (SP MATERIAL) • TRAFFIC MODULE • REMOTE UP- LOADING OF INSPECTION RELEASE CERTIFICATE AND ASSOCIATED VALIDATION PROCESS • BULKLOAD BY VENDORS OF PACKING LIST AND ASSOCIATED VALIDATION PROCESS • PRODUCT CERTIFICATES MANAGEMENT • H.O. CONSTRUCTION • EFFECTIVE TOOL FOR HEAVY LIFT SIMULATION DURING CONTRUCTABILITY SESSIONS

21. AREAS OF IMROVEMENT/DEVELOPMENT • MATERIAL MANAGEMENT THROUGH RADIO FREQUENCY IDENTIFICATION • PLANNING OF IMPROVEMENTS • SUPPORT CLOSE TO END USERS AT FIRST DEPLOYMENT

22. THANK YOU 22

23. TECHNIP ITALY AT A GLANCE • TECHNIP ITALY is a General Process Engineering Contractor based in Rome since 1969, with a track record of more than 500 major projects successfully completed in five continents and Production capacity of 4,000,000 service manhours per year • 2008 Turnover: 941 million Euro • 92% abroad • Available workforce: more than 2500 units • 500+ major projects in 60 countries: 80 completed during thepast 5 years • 21 current projects in 13 countries • LSTK experience: more than 180 contracts in 47 countries for a value exceeding 16 billion Euro • Managed purchasing volume in 2008: more than 700 million Euro

24. 21 major current projects in 13 countries • POLAND • PKN ORLEN: • Diesel Oil Hydrodesulphurization Plant PKN ORLEN: • Paraxylene Complex GRUPA LOTOS SA: • Hydrocracking project • PMC for Gdansk refinery upgrading • Butane Deasphalting Project • BULGARIA • LUKOIL NEFTOCHIM BURGAS: • H-OIL and VGO Hydrocracker Complex (FEED) • THE NETHERLANDS NESTE OIL CORPORATION: • NExBTL Renewable Diesel Plant ITALY SNAM RETE GAS: • Gas pipelines (various sites) • ENI S.p.A. Div. Exploration andProduction • Oil Gathering Center: 4° Line Upgrading – Eng.ing Services GALSI • Engineering services for gas pipelines CHINA BP-YPC ACETYLS CO. LTD: • Acetic Acid Project EGYPT MIDOR: • Delayed Coking Unit Expansion COLOMBIA ECOPETROL: • Refinery Expansion HDT and other project REFINERIA DE CARTAGENA SA: • Refinery Expansion including FCC unit revamp SINGAPORE NESTE OIL SINGAPORE: • NExBTL Renewable Diesel Plant PERU’ C.F. INDUSTRIES INC. • Nitrogen Complex Feed Phase (NCFP) GREECE MOH: • Corinth Refinery: New Crude Atm. Distillation SAUDIARABIA SAUDI ARAMCO: • Grass-roots Gas Plant SATORP: • Export Refinery Project – EPC contracts for Package 2A and Package 5A IRAQ SCOP: • New Karbala Refinery (FEED) ALGERIA NAFTEC: • Arzew Refinery Rehabilitation and Expansion (FEED/PMS)