SLG – Compliance: The key to project completion
In order to bring change into business, capital investment projects are continuously being sort. This allows for the expansion of business, either to develop a new product that may be sold; or in fact improve manufacturing processes to reduce operational expenditure.
Mankind has been involved in projects since the construction of the great pyramids. These complex projects were managed without any of the sophisticated technology available today. However, in modern society, the nature of projects and the environments in which they exist have changed significantly. Many modern projects involve challenges in terms of technical complexity, cost constraints, resource constraints, environmental uncertainty, and demanding time schedules in order to ensure maximised production.
Currently, organisations around the world face high project implementation failure rates, resulting in millions being wasted. Despite the availability of project management tools, techniques and technology, mega-projects are still running overdue and over budget. Projects in the oil and gas industry are at the forefront to building economies and hence organisations need to ensure due diligence in all aspects.
It is a common misconception in the gas industry that imported gas equipment will automatically be suitable for use in the South African gas market. This is especially true when the importer foresees ‘potential savings’.
Currently there is a gap that needs to be addressed by the local gas association which will ensure that international companies understand minimum South African compliance requirements. The user and importer of gas equipment should equip themselves with the relevant standards, regulations and regulatory body requirements before import considerations.
• South African National Standards (SANS) 329 which addresses the requirements for industrial thermoprocessing equipment.
• Pressure Equipment Regulations (PER) which is part of the Occupational Health and Safety Act.
• The Safe Gas Equipment Scheme (SGES) which governs all imported natural gas equipment. This scheme was established by the South African Gas Association (SAGA) to ensure that all equipment meets acceptable standards.
As recently as 2019, there have been various cases of customers who have had to incur additional costs in excess of 12% of their total procurement costs due to rework of the imported gas systems that did not comply with local requirements. The project delays due to rework also contribute to the missed opportunity of not commissioning the plant timeously. In a recent case study, the following was discovered:
• Customer imported equipment from China
• Gas trains and pipeline were designed according to Chinese standards
• Burners did not have name plates nor technical data
• No mechanical flow diagrams
• No data packs available
• This resulted in:
• Failure of the Authorised Gas Practitioner to issue a Certificate of Conformity (CoC)
• Discarding of 70% of the procured equipment
• Over expenditure of approximately half a million rand as a result of rework
The consequences of noncompliance, apart from criminal charges for not adhering to the law, often include delays in commissioning, negative reputational impact, loss of potential opportunities and increased expenditure emanating from rework. This costly exercise could have been prevented had the respective advisors been consulted prior to embarking on such a significant project investment.
SLG’s customer value proposition goes beyond gas supply: technical feasibility studies, regulatory licenses, installations, commissioning and postinstallation technical and safety training are facilitated by SLG as value added services.