REPLACEMENT OF AIR COMPRESSOR FOR NITROGEN PLANT PROJECT LESSONS LEARNED AT PT BADAK NGL

• Main Author: Patriana, Prima
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/69958
• Institution: Institut Teknologi Bandung

Today PT Badak NGL is facing challenge regarding production decline due to feed gas as its raw material is declining forcing the better performance of the company. Besides, since 2017 PT Badak NGL control is also performed under SKK Migas as Indonesian government representative of oil and gas production management who implements tighter control to PT Badak NGL including for project management aspect. Regarding project activity in PT Badak NGL, there are two KPIs, they are Project Scope Completion (target 100%) and Capital Expense Deviation Overrun Maximum ±10% from Approved Budget. However, in this high expectation for project management performance, there was a project (Replacement of Air Compressor for Nitrogen Plant at PT Badak NGL project) having poor performance. The project end financial status was under-budget making the second KPI was not achieved. Secondly, there was a delay in project Construction activity making the Nitrogen Plant could not make production as per initial target date and consequently making unplanned spending for purchasing Liquid Nitrogen from external (financial loss). The last issue was regarding Transmitter material procurement at which its delivery was late (after project end period), making the payment was charged to the other project cost account (decreasing the other project budget). Hence, this paper is made to evaluate and address solutions as lessons learned for Replacement of Air Compressor for Nitrogen Plant at PT Badak NGL project, for improvement of similar future projects. Using 5 Whys Analysis method, the root cause for each issue is analyzed. The root cause related to project delay in Construction phase was project Communication Management Plan was not well updated. The root causes related to under-budget project end financial status issue are cost estimation in proposed / determined budget was not detailed enough, and bidder lowered price / value at tender than their previous price (in budgetary). And the root causes for Transmitter material procurement project scope incomplete during project period issue are budget estimation was not detailed and reliable in budget proposal and OE (Owner Estimate) at tender, lack of project management regarding contracting and purchasing constraints, and Project Integrated Change Control was not performed in responding to potential change to the project baseline. Several solutions then are established to address each of determined previous root causes. Regarding project communication problem root cause, the proposed solution is implementation of Monitor Communication Process and using Unpriced PO (Purchase Order) as project contract documentation requirement to ease communication monitoring with project contractor and subcontractor. Regarding budget estimation problem root cause, the solution is implementation of better Estimate Class (Class 2 Estimate) for budget proposal, development of project (cost) repository, and implementation of reserve analysis. Regarding source selection problem root cause, the solution is implementation of Quality and Cost-Based selection method, and using HPS Market for improving price ‘transparency’. And finally, regarding integrated change control problem root cause, the solution is implementation of Perform Integrated Change Control by mapping all possible alternatives and concern.