Stage-gate process integrated risk management framework for overseas LNG plant projects

The demand of Liquefied Natural Gas (LNG) is on a steady increase, and the estimation of world LNG consumption will be doubled by 2030 compared with 2005. In the wake of increasing demand, numerous LNG plant projects are under construction and many new projects are in the planning stage. However, since there are limited numbers of companies that have a full capability of core technologies and licenses related with LNG plant construction, companies that are less experienced in LNG plant projects suffer from a lack of project management ability, such as process planning, schedule management, and risk management particularly for early stage of project initiation. A number of researches have highlighted the importance of the early design phase in EPC-type plant projects and its consequential impact on project performance. Therefore, this study aims to develop a risk management system to support an efficient decision-making process during the design phase. The research procedure consists of three parts. First, we identified a total of 82 design risk factors composed of typical risk items related to any plant projects and LNG-specified design risks. Second, we developed a risk management framework based on the stage-gate process, composed of three sub-stages: Pre-stage, On-stage and Post-stage of each sub-design phase. Finally, we applied this procedure to plant layout stage. This study is expected to support better decision-making in the design phase of overseas LNG plant projects by integrating the stage-gate process and risk management cycles for making prompt "go/no-go decisions" on the key decision checkpoints.