Key Project Phases for Front End Loading
FEED (Front-End Engineering Design) and FEL (Front-End Loading) are sometimes used more or less interchangeably. In brief, FEED is only one of the activities that make up the FEL process. It is the last process leading up to the Final Investment Decision for an engineering project.
FEL is all the work done on a project before the final investment decision is made. The FEL process takes different forms in different companies but the underlying principle is the same: the process is divided into stages with each stage ending in a formal assessment aimed at making a decision as to whether to proceed to the next stage, redo/recycle to a past stage or cancel the project. These assessments cover both the technical and business dimensions of the project.
Stages of FEL
In a proper FEL process, there must be a minimum of 3 stages. The first stage (FEL-1) is to appraise the business opportunity and come up with a convincing business case. The process also includes the activities to determine the optimum philosophy for achieving the business objectives: building a new project vs acquisition vs mergers/partnership/joint venture or any combination of the aforementioned.
FEL-1 Scoping Study / Conceptual Design
Conceptual Design deliverables:
This would be the earliest opportunity to move the results to the Business Plan, although with a loose performance / scope definition and a broad cost order of magnitude (Class 5), it would be wise to complete the next stage of the process, FEL-2, to tighten up.
FEL-2 Feasibility Study / Preliminary Engineering
A Feasibility Study is a preliminary study that will produce the information required for Preliminary Engineering. Design deliverables will typically include:
After the deliverables have been completed, we would undertake a FEL-2 Gate Review. If the panel determine that the feasibility design remains valid, then approval is requested to move to FEL-3
This should be the optimum opportunity to move the results to the Business Plan. The results should provide a good balance of performance / scope definition and a moderate cost order of magnitude (Class 4).
FEL-3 Project Definition / Front End Engineering Design
Project Definition is the development of a well defined design package to in order to prove the feasibility and the cost estimate developed from Conceptual Design. Furthermore this is the start up package for Detailed Design. In many cases this package may also be used as a tender package for a Design/Construction Contract. Typical deliverables will include:
After the deliverables have been completed, we would undertake a FEL-3 Gate Review. If the panel determine that the FEED / Basic Engineering, schedule and cost estimates remain valid, then the Project is presented to the Board/Management for final review and approval. Subject to approval, the Final Investment Decision (FID) is granted, and we move to the Engineering, Procurement and Construction (EPC) Phase.
Systematically working through the various FEL phases, and input/development of the Business Plan is a critical process for the Project. It is essential that the list of deliverables is clearly defined for the team and that the efforts are effectively managed throughout this phase to realize the optimum value. Not too much, not too little.
Wee experienced in defining the list of deliverables needed and the depth of study required. We also have the experience and engineering / commercial judgement to make sound assumptions during the early phases of the FEL.
Testimony to the work we perform, is the fact that these early documents are referenced many time during the development and execution of the project. This demonstrates that we are building the [project on a strong foundation.
An experienced and effective manager will identify the deliverables and depth of detail required to meet the project needs, with the optimum cost/value ratio.