Modularization aims to reduce the number of interfaces, the total installed cost (TIC) and overall schedule length of a project while optimizing the return on investment and allowing standardization of future similar projects. Originally used for offshore platforms starting in the 1980s, this design philosophy has made slow progress in onshore applications. However, today’s low oil prices are prompting increasing interest in modularization because it promises to cut project costs.
In contrast with conventional field-constructed (stick-built) projects, modularization splits a unit into parts — so-called “modules” — to be prefabricated in an offsite workshop and assembled later onsite on a pre-laid foundation.
The defined modules are compact and portable, and offer the combined functionality of multiple skids. Modules also are self-supporting and consequently removable, if required. From a design perspective, this means focusing at a package level rather than on individual equipment as is the case with conventional engineering.
Modularization offers many significant benefits including cost savings by reducing field erection; higher quality and safety from having fabrication done in an offsite shop; decreased schedule (by up to 25–50%); increased efficiency; module mobility and re-usability; and less site construction complexity due to fewer interface points for modules, reduced onsite logistics, etc. These advantages become even more important at remote locations, and at any site contending with adverse weather/climate, lack of skilled personnel onsite, and concerns about downtime on brownfield projects.
However, the approach also poses critical challenges that if not addressed properly can trigger higher costs and delays. So, a careful evaluation of the viability of modularization is essential.
The decision about whether to use modularization should be made very early after starting a project, typically during the conceptual/pre-front-end-engineering-design phase, when the engineering consultant evaluates the most cost-effective design strategy. A feasibility study of modularization versus stick-built design should take into account the owner’s input and assess all critical factors. The following points deserve particular consideration:
• Is future plant capacity suitable for modularization? The approach already has proven itself for mini-refineries with capacities up to 50,000 bbl/d, gas plants up to 200-million scfd capacity (in two similar trains) and floating production, storage and offloading (FPSO) units.
• Are there any restrictions on where and who can fabricate modules? Depending on modules type and complexity, you must assemble a shortlist of potential fabricators, which later will be refined based on local codes and regulations, distance from final destination, country taxes or other criteria.
• Is modularization impacted by shipping and transportation limits? Existing transportation infrastructure (highways, railway system in place, sea access) at fabricators or the destination may become critical. Typical modules sizes are 12 ft ×12 ft × 60 ft up to 24 ft × 24 ft ×120 ft by truck/rail, or larger by sea; weight limits are up to 400–600 tons by truck/rail or as much as 12,000 tons by sea.
• How would equipment spacing limitations impact modularization? Plant owner standards may not always align with the equipment spacing philosophy of fabricators; in such cases, industry practice (i.e., existing similar facilities) may become decisive.
• Are site permits available at the start of the project? This can save considerable time in project development. However, a project can progress in a fabricator workshop in parallel with permit application in case of modularization versus typical standard stick-built projects.
• What is the availability of onsite heavy-lift cranes (> 300 tons per module)? This may impact modules’ sizing. When such cranes are needed, proper scheduling of their availability onsite is essential to avoid runaway project costs.
• How experienced are the shortlisted fabricators in modularization? Demonstrated competence in previous modularization projects may become a major advantage in favor of adopting modularization.
• What is the gap between field and shop fabricator labor cost and productivity? Invariably labor costs are lower (by as much as two-thirds) and productivity is much higher when work is done in a fabricator’s shop rather than onsite.
Modularized projects, if properly managed, can provide significantly compressed metrics. Figure 1 illustrates schedule savings typically achieved by a modularized project compared to a conventional stick-built one.
Addressing Potential Challenges
Modularization also poses some negatives. Some of the most important issues are:
1. Cost of first design can exceed that of the conventional design by up to 50–60% or reach as much as 12% of the TIC  depending on familiarity and past experience of the contractor with the modular approach.
Solution tips: Because the front-end effort is more intense than in conventional engineering and the number of long-lead items is greater with orders placed much earlier during the project, good planning, scheduling, and activities sequencing are crucial to meet hookup and commissioning target dates. You must identify and freeze module interfaces early to allow progress of parallel workshop and site activities, restrict deviations to a minimum, and ensure continuous schedule alignment. Good coordination and claim management are essential because procurement starts at an earlier stage. In addition, expediting needs to be constantly evaluated to anticipate and avoid major delays.