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INFRASTRUCTURE
MINING & METALS
NUCLEAR, SECURITY & ENVIRONMENTAL
OIL, GAS & CHEMICALS
Procurement Drives Value
Paul Gibbs
Managing Director, UK
7th June 2018
The strength of our team 2017 Financials
25,000 extraordinary projects, many first-of-a-kind, in 160 countries on all 7 continents
Engineering the Extraordinary
80% of nuclear plants in the
U.S. designed, delivered, or
serviced by Bechtel, and
150 worldwide
Procured more than $1.3
billion in goods and
services from U.S. small
businesses in 2015
Building the world’s
largest and most complex
radioactive waste treatment
plant
Nuclear, Security &
Environmental
200 million metric tons per
year of installed iron ore
production
42 major copper projects
30 aluminium smelter
projects
8 alumina refinery projects
Mining & Metals
Bechtel has delivered:
$25.9 revenue in billions of U.S. dollars
$11.8 new work booked in billions of U.S.
dollars
50,000+ colleagues worldwide
100+ nationalities
#1U.S.
Contractor
20th Straight
Year
From
Engineering
News-Record’s
Top 400
Contractor List
2017
300 subway and rail
projects
17,200+ miles (27,700
km) of highways and roads
6,200+ miles (10,000+
km) of railroad
390 individual power plants
Infrastructure
40+ LNG trains producing
120+ million metric tons per
year
275+ refinery expansions
and modernizations
6,200+ miles (10,000+ km)
of pipeline systems
380 major chemical and
petrochemical projects
Oil, Gas &Chemicals
© 2018 Bechtel | 2
Bechtel Group Organisation
© 2018 Bechtel | 3
Vision: To successfully deliver a portfolio of infrastructure projects across
the globe where we can deliver differentiated value, giving more for less
▪ Aviation
▪ Bridges/Tunnels
▪ Communication Networks
▪ Highways
▪ Ports & Marine
▪ Power and Transmission
▪ PPPs
▪ Rail
▪ Liquefied Natural Gas
▪ Offshore
▪ Onshore Oil &
Gas/Downstream
▪ Petrochemicals
▪ Pipelines
▪ Storage Tanks
▪ Water
▪ Hydro-/Pyro-metallurgical &
Mineral Processing
▪ Metal Forming
▪ Mine Planning
▪ Mineral Exploration and
Geology
▪ Chemical Weapons
Destruction
▪ Commercial Nuclear Power
▪ Critical Infrastructure
▪ Environmental Cleanup
▪ Nuclear Security Operations
▪ Waste Processing
Mining & Metals
Fjarðaál Aluminium Smelter,
Iceland
Oil, Gas & Chemicals
Wheatstone LNG, Australia
Nuclear, Security &
Environmental
Wylfa Newydd Nuclear Power
Plant, Wales
Infrastructure
Crossrail, London
Bechtel Globally
Ivanpah Solar Generating System
Russell City Energy Center
Sabine Pass LNG
Chornobyl Shelter Implementation Plan
Hanna Region Transmission
Corpus Christi LNG
West Nile Delta Gas Plants
Jamnagar 3 Offsites and Utilities
Wheatstone LNG
Queensland LNG ProjectsPascagoula Base Oil Project
Kitimat Modernization Project
Worsley Alumna Efficiency & Growth
Project
Brisbane Hub Projects
Yarwun Alumina Refinery
Kooragang Expansion
Ras Al Khair Aluminum Smelter
Surmount 2
California Valley Solar Ranch
Prairie State Energy Campus
Davis-Besse Nuclear Plant
Watts Bar Nuclear Plant
Panda Power Projects
Metro Rio Project
McCarran Airport
Blue Grass Pilot Plant
The Greater West Route
Modernization
Crossrail
Kosovo Motorway
Jubail
Hamad Airport
Khalifa & KPIZ
Hanford WTP/Hanford Cleanup
Lawrence Livermore National Lab
Los Alamos National Lab
Dulles Metro Extension
Pueblo Pilot Plant
U.S. Nuclear Security Enterprise
Naval Nuclear Propulsion Plants
Gabon Infrastructure
Angola LNG
Mozambique LNG
Las Bambas Mine
Antapaccay Mine
Laguna Seca Project
Muscat Airport
Wa’ad Al Shamaal City Development
Savannah River Remediation
Wylfa NewyddNuclear Power Plant
Gatwick AirportAnkara-Gerede
Highway
Athens Metro
Fjarðaál AluminiumSmelter
HS2
Los PelambresCopper Mine
Escondida Water Supply
London City Airport
© 2018 Bechtel | 4
Full Scope of Project Services
Business Case & Concept Planning
Project Management
Integrated Engineering, Procurement, Construction
Startup & Commissioning
O&M
▪ Project
Development (Site
Selection &
Permitting)
▪ Project assessments
▪ Commercial
structuring
▪ Financing
▪ Contracts
▪ Establish Project Execution Plan
▪ Organize execution team
▪ Prepare risk register and risk mitigation
▪ Monitor and report cost and schedule
▪ Preliminary and detailed design
▪ Procurement Systems
▪ Construction
▪ Plant testing and commissioning
▪ Operator Training
▪ Operations and maintenance plans
▪ Renewals
© 2018 Bechtel | 5
UK Procurement of Larger Projects
▪ Separate contracts for Engineering, Procurement, and Construction (EPC)
▪ Varied approach across the industry; customer and sector dependant
• Customers with integrated early procurement: private sector
- London City Airport/Gatwick Airport (privately funded)
- Combined Cycle Power Plants (fully integrated EPC)
• Customers with siloed and late procurement: public sector
- Heathrow Airport
- Network Rail
- High Speed 2
- Highways England
▪ Split packages of engineering and later contractor
involvement results in:
• Increase in interfaces with numbers of contractors
• Increased programme duration
• Increased risk (managing vs taking risk)
• Increased cost
• Reduced quality and fragmented delivery
• Reduced innovation
• Reduced confidence of outcome
▪ EPCM or EPC approach Bond Street, Crossrail
© 2018 Bechtel | 6
Value of Early Engagement
Integrated
EPC
Staff Augmentation
Large owner with
> 1 to 1 cover
Low
Typical
private sector
investment
Typical
public sector
investment
Valu
e
Time
Realistic
estimate Liars poker
bidding
Best Practice
Quality / Open book
Concept Co-ownership
Conceptualise What High likelihood of
overrun of cost
and schedule
How
© 2018 Bechtel | 7
Summary
▪ Plans for UK infrastructure are ambitious
• Capacity of industry is limited
• Contracting model: weak balance sheets, poor supply chain management
• Productivity: contracting model doesn’t encourage investment
• Offsite manufacturing is not a panacea
• good structuring of deals provides for better value
▪ Clients demanding change to a more focused and realistic approach to ensure successful
delivery of major critical infrastructure projects
• public procurement is evidence based, not outcome responsible
▪ Earlier contractor involvement will:
• Provide horizontal integration across the scope to reduce risk, integrating Engineering,
Procurement, and Construction
• Influence cost and schedule, allowing for ownership of the scope
• Results in greater influence on the outcome
• Add value to the project; provide more for less
© 2018 Bechtel | 8
Questions & Discussion
Paul GibbsManaging Director UK
+44 20 76517819
© 2018 Bechtel | 9