ARAMCO QUALITY STANDARD

Saudi Aramco 7180 (5/89)

SAUDI ARABIAN OIL COMPANY (Saudi Aramco)GENERAL INSTRUCTION MANUAL

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INSPECTION DEPARTMENT

QUALITY SYSTEM ROLES AND RESPONSIBILITIES

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CONTENT:This General Instruction prescribes the roles and responsibilities between the Inspection Department (ID) andProject Management (PM) during the various project phases under the Capital Program.

This General Instruction contains the following information:

1. Purpose2. References3. Definitions4. Commitment5. Team Organization Structure6. Roles and Responsibilities for Major Projects7. Roles and Responsibilities for Small Projects8. Attachments9. Approval Authority

1.0 PURPOSE:

This instruction defines the roles and responsibilities of the organizations and personnel directlyresponsible for the quality of the facilities being provided to the Company under the Capital Budget forall projects managed by Project Management.

2.0 REFERENCES:

2.1 SAEP-1023 "Contractor Quality Assurance And Quality Control Requirements"

2.2 SAEP-303 "Engineering Reviews of Project Proposal And Detailed Design Documentation"

2.3 SAEP-1150 "Inspection Coverage On Projects"

3.0 DEFINITIONS:

3.1 Functional Reporting: For the purposes of this document, when the ID Representativefunctionally reports to the Project Manager, he is empowered to report and resolve all qualityissues, concerns and violations directly with the Project Manager or his representative inaccordance with SAEP-1023. In addition, the Project Manager will communicate all projectquality documentation review/approval requests directly to the ID Representative.

3.2 Administrative Reporting: For the purposes of this document, the ID representative willcontinue to report to his Project Inspection Unit on his daily inspection activities and



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assignments. In addition, all of his personnel records, promotions, evaluations and all otherpersonnel activities will be retained by Inspection Department.

3.3 Major projects: Any project with a capital value more than $50MM, or any group of smallprojects agreed to by Project Management and Inspection Department.

3.4 Small projects: Any project with capital value less than $50MM.

4.0 COMMITMENT:

4.1 Engineering and Operations Services (E&OS) is committed to providing facilities that are fit forpurpose and designed, procured and built to the highest quality in accordance with SaudiAramco Mandatory Engineering Requirements (SAMERs), Project Specifications and Contractrequirements.

4.2 PROJECT MANAGEMENT

4.2.1 As the Company Representative leading the project delivery effort, Project Management,through Project Management Teams (PMT's), is responsible for the overall quality of theprojects in the capital program. Each Project Manager is responsible for implementationof quality systems that will effectively deliver the project per Saudi Aramco specifiedquality requirements.

4.2.2 Project Management will provide the leadership, management systems, and resourcesrequired to effectively design, procure, construct and mechanically complete theprojects. In addition, Project Management will provide on site qualified PMTsupervision to insure that the Contractor adheres to all procedures and standards and thebuilt facilities meet with Saudi Aramco Mandatory Engineering Requirements(SAMERs), Project Specifications and Contract requirements.

4.3 INSPECTION DEPARTMENT

4.3.1 Inspection Department is charged with the corporate responsibility to assure that aneffective quality management system is in place, so that materials and equipmentpurchased, and equipment and facilities constructed for and by Saudi Aramco complywith Saudi Aramco specified quality requirements.

4.3.2 Inspection Department will participate actively in the development of effective qualitysystems, and monitor and assess capital program execution to ensure the project meetsspecified quality requirements.

4.3.3 Inspection Department will provide the resources required to effectively support andassess quality systems throughout all phases of the project: design, procurement,construction and pre-commissioning. In addition, Inspection Department will provideon site inspection in sufficient quality, quantity and detail to insure, through the ProjectManager, that the Contractor effectively and efficiently enforces the Saudi AramcoMandatory Engineering Requirements (SAMERs), Project Specifications and Contractrequirements.



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5.0 TEAM ORGANIZATION STRUCTURE:

5.1 The basis for better definition of Project Management Team (PMT) and Inspection Department(ID) roles and responsibilities can be best illustrated in Attachment I, II & III which shows theProject Team Organization Structure Models for major projects at various stages. This modelfosters a 'true' owner team that is aligned and fully responsible for Project Quality, Cost andSchedule. The key element is the assignment of an ID Single Point Contact for all majorprojects with capital value over $50MM.

5.2 The same concept will be adopted for a group of medium and small size projects.

6.0 ROLES AND RESPONSIBILITIES FOR MAJOR PROJECTS:

6.1 INSPECTION DEPARTMENT REPRESENTATIVES:

6.1.1 Assignment and Reporting

6.1.1.1 For each major project or group of small projects, where the Project(s) requiresmore than one ID Representative, Inspection Department will assign a SinglePoint Contact (SPC) who shall be responsible for coordinating all inspectionactivities related to the project throughout all the work phases. The SPC willinterface and work with all Project Managers to ensure that the project qualityrequirements are met. The SPC will be located IK at the location most effectivefor the work involved. After Contractor mobilization, he will generally be lo-cated at the construction site.

6.1.1.2 Design and Procurement phase: During this phase, the Inspection DepartmentSPC will form a vendor inspection team to cover the design and procurementinspection activities. This team will consist of the ID SPC and Saudi AramcoInspection Representatives (SAIRs). During this phase each SAIR located atthe Design Office will report functionally to the most senior PMT Representa-tive (Sr. Project Manager, Project Manager. Sr. PE, PE) located at the DesignOffice and administratively to the SPC. The SAIR is responsible for the inspec-tion activities during this phase of the project.

6.1.1.3 Design, Procurement and Construction Phases Simultaneously: During thisoverlapping period and when the Site activities start, the Inspection Depart-ment SPC will form a project inspection team to cover the Construction phase.The inspection team will consist of Projects Inspection Division (PID) Super-visor(s), Field Supervisor(s) and Inspectors. Each Inspection Field Supervisorwill functionally report to the respective PMT Site Representative and admin-istratively to the PID Supervisor. The PID Supervisor will functionally reportto the senior PMT representative on site and administratively to the SPC. ThePID Supervisor will be responsible for the all project construction inspectionactivities. Each inspection Field Supervisor is responsible for inspection activ-ities in his assigned area of the project. Also, the PID Supervisor is responsiblefor the inspection activities in his assigned project(s).



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At this stage of the project, Inspection Department SPC will assign a VIDcoordinator over the SAIRs to coordinate all the Design and Procurementinspection activities. At the Design and Procurement office, the SAIR locatedat that Design offices will still functionally report to the most senior PMTRepresentative (Sr. Project Manager, Project Manger. Sr. PE, PE) located atthe design office, and administratively to the VID coordinator.

6.1.1.4 Construction phase: the arrangement outlined in 6.1.1.3 will still apply; how-ever, the PID Supervisor will report functionally to the Project Managers andadministratively to the SPC. Also, the VID coordinator and all the SAIRs willmove to the respective sites and continue their procurement phase inspectionactivities. They will functionally report to the senior PMT member and admin-istratively to the SPC. Once all materials have arrived on site, the VID coordi-nator and SAIRs will report to VID.

6.1.2 Manning Level and Mobilization Plan

6.1.2.1 Immediately after Contract(s) award, the SPC will work with Projects Inspec-tion Division (PID) Superintendent, Vendors Inspection Division (VID) Su-perintendent and Project Manager(s) to determine the required ID QA/QCmanning level. He will assign Saudi Aramco Inspection Representatives(SAIRs), PID Supervisor(s) and discipline inspectors to each site and/or con-tract in sufficient numbers to effectively monitor the Contractor's quality sys-tem and insure that all procedures and critical systems are inspected toSAMERs, Project Specifications and Contract requirements.

6.1.2.2 The SPC will continue to work with PID & VID Superintendents and ProjectManager(s) to determine the ID inspectors Mobilization Plan during the vari-ous phases of the project.

6.1.3 Responsibilities

6.1.3.1 Prior to Contract Award

a. The SPC or his representative(s) will actively work with ProjectManager(s) in the development of the project overall QA/QC plans.

b. As determined necessary by PM & ID, the SPC or his representative(s)will participate in technically qualifying the Contractors, sub-Contractors and vendors providing services and materials to the project.

6.1.3.2 Design and Procurement Phase

a. The ID representative(s) will review the quality manuals, QA/QCProcedures and Inspection and Test Plans (ITP's) prepared by theContractors in accordance with SAEP-1023 to determine if theContractor's commitment, organization, quality system, personnel andprocesses are adequate to achieve contractual and project requirements.



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b. The ID representative(s) will work with the project manager to identifyvendor inspection requirements, arrange for required inspectioncoverage, insure appropriate Contractor QA/QC coverage, and conductspot vendor inspections to insure conformance to requirements.

c. The ID representative(s) will document any violation to the Contractrequirements in the Site Logbook. Also, he will issue NCR's and WorkSheets to the PM as needed.

d. The ID representative(s) will keep the project manager appraised of allrelevant QA/QC activities.

6.1.3.3 Construction Phase

a. The ID representative(s) will review the quality manuals, QA/QCProcedures and Inspection and Test Plans (ITP's) prepared by theContractors in accordance with SAEP-1023 to determine if theContractor's commitment, organization, quality system, personnel andprocesses are adequate to achieve contractual and project requirements.

b. The ID representative(s) will conduct sufficient on-site inspections inall disciplines to assure that the Contractor is effectively implementinghis approved quality plans, and report discrepancies to the projectmanager.

c. The ID representative(s) will maintain inspection logs and issue NCR'sthrough the project manager to the Contractor as needed.

d. The ID representative(s) will keep the project manager appraised of allrelevant QA/QC activities.

6.1.3.4 Precommissioning Phase

a. The ID representative(s) will work with the project manager to developan effective QA/QC plan during pre-commissioning.

b. The ID representative(s) will provide sufficient QA/QC managementand inspection to assist the Project Manager to insure that all exceptionitems are identified, and assist the project manager as needed to insuretheir effective resolution.



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6.1.4 Quality Assessments

The SPC or his representative(s) is responsible to conduct focused technical assessmentsof the project work progress to ensure that the project quality activities and processes areeffective. The schedule of these assessments will be agreed upon by PMT and ID.

6.1.5 Quality Status Reporting

6.1.5.1 The Inspection Department Site Representatives shall provide QA/QC reportsto the Project Manager highlighting the deviations from the Contract,SAMERs, Project Specifications or quality requirements and recommendingcorrective action. The ID site representative will also report specific areas ofconcern to Proponent, PMT and ES Executive Management in accordance withSAEP-1150.

6.1.5.2 The SPC will analyze all the QA/QC reports and status data, and will reportany areas of concern to the Project Management Department Manager.

6.1.5.3 The SPC is responsible to promote and build awareness of the project QA/QCrequirements and systems within the PMT.

6.1.6 Design Reviews

In accordance with SAEP-303 "Engineering Reviews Of Project Proposal And DetailDesign Documentation", the SPC or his representative(s) will participate in the projectdesign reviews at appropriate stages.

6.2 PROJECT MANAGER

6.2.1 Project Quality

6.2.1.1 As the Company Representative, the Project Manager is responsible for theoverall project quality.

6.2.1.2 He is responsible for the effectiveness of the project QA/QC program on hisproject(s).

6.2.1.3 He is responsible to have a PMT member acknowledge all logbook entries withinitials and dates. He will resolve deviations identified by ID with the Contrac-tor. All open issues will be addressed in regular PMT/Contractor meetings.

6.2.1.4 Disagreements between the PMT and ID representatives shall first be resolvedby the Project Manager. If the disagreement persists, it shall be resolved bythe SPC and the Project Department Manager, or higher as appropriate.

6.2.1.5 He is responsible for the performance of the ID representatives that function-ally report to him.



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6.2.2 Contractor Compliance

6.2.2.1 He must ensure through Inspection Department representatives that the Con-tractor(s), Sub-Contractors and Vendors implement project QA/QC require-ments in accordance with SAMERs, Project Specifications and Contractrequirements.

6.2.2.2 He is responsible to ensure Contractor remediation of deficiencies reported bythe inspection representatives.

6.2.3 Feedback

He will provide feedback on the ID QA/QC personnel performance to the InspectionDepartment.

6.3 PROJECT MANAGEMENT DEPARTMENT MANAGER

6.3.1 Provide guidance and support to the Project Manager as needed to assure project qualitygoals are met.

6.3.2 Set department quality objectives and provide means to achieve them.

6.3.3 Review project and departmental QA/QC programs and performance to insure effectiveimplementation of corporate objectives.

6.3.4 Periodically review project QA/QC results, and make appropriate policy adjustments toachieve the desired results.

6.3.5 Interface with Inspection Department Manager as necessary.

6.3.6 Resolve ID/PMT disagreements or refer them to senior management.

6.4 INSPECTION DEPARTMENT MANAGER

6.4.1 Develop and maintain Quality Performance Indices to assess the status of the project andbenchmark at the Corporate level as a whole.

6.4.2 Monitor quality compliance performance indicators and take corrective actions whendeviations from plan start to appear.

6.4.3 Assign qualified ID Single Point Contacts (SPCs).

6.4.4 Call for and implement quality assessments to ensure compliance.

6.4.5 Assign an individual or a team to conduct spot assessments of work progress. Theobjective of these assessments is to evaluate the effectiveness of the Contractor QA/QCcoverage of a project.

6.4.6 Provide feedback to executive management on quality issues as necessary.



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7.0 ROLES AND RESPONSIBILITIES FOR SMALL PROJECTS:

7.1 INSPECTION DEPARTMENT REPRESENTATIVES

7.1.1 The Project Inspection Unit Supervisor will be the Single Point Contact (SPC) for theproject.

7.1.2 All other roles and responsibilities assigned to other Inspection DepartmentRepresentatives listed in Section 6.1 are applicable.

7.2 PROJECT MANAGER

The same as Section 6.2.

7.3 PROJECT MANAGEMENT DEPARTMENT MANAGER


7.4 INSPECTION DEPARTMENT MANAGER


8.0 ATTACHMENTS:

The following attachments are provided with this General Instruction:

ATTACHMENT I: The PROJECT TEAM ORGANIZATION STRUCTURE MODEL DURING DESIGN AND PROCUREMENT PHASE.

ATTACHMENT II: The PROJECT TEAM ORGANIZATION STRUCTURE MODEL DURING DESIGN, PROCUREMENT AND CONSTRUCTION SIMULTANEOUSLY.

ATTACHMENT III: The PROJECT TEAM ORGANIZATION STRUCTURE MODEL DURING CONSTRUCTION ONLY.

9.0 APPROVAL AUTHORITY:

Concurred By:Vice President ES Vice President PM:

Approved By:Senior Vice President E&OS



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ARAMCO QUALITY STANDARD