Press Releases

Denver, Colo. - Projects in the oil and gas industry are technically, and oftentimes politically, complex. Large projects can involve more than one client, and they typically require the efforts of numerous consultants and contractors. Effectively managing these projects has always been a tremendous challenge for the industry.

Adding to the complexities of these projects are the growing impacts of deregulation, which have created fierce competition and increased the need for companies to move fast - in an industry that has traditionally moved relatively slowly.

Early in 1997, Trigon, LLC, a full-service engineering and construction firm serving the oil, gas, and power industries, rolled out a new approach to project management and execution. They call it the "Alliance for Success." The approach was developed in cooperation with several key Trigon clients prior to the roll-out.

"Our goal was to do whatever we could to reduce the risks and obstacles associated with getting a project done on time and on budget, while providing the most cost- effective project solution to our clients," explains Stu Asselin, P.E., Trigon's Vice President of Business Development.

"The answer turned out to be an innovative approach that offers a significant opportunity for improving the execution, installed cost, and schedule of capital projects throughout the energy industry. This approach creates a team out of the client, engineering consultants, contractors, and major vendors - a group which has traditionally been adversarial and poorly coordinated," Asselin says.

"In the traditional model, the client and contractors are on opposite ends of the profit incentive spectrum. Contractors make more money by charging for more time spent on a project. Clients don't start making money until a project is up and operating. And the management of risk is rarely addressed in this traditional project process," Asselin said.

With the Alliance for Success, a team is formed very early in the project, and the entire team works together on a master schedule using a common project execution plan and budget. The profit incentives for every company on the team are tied to the success of the overall project based on budget and schedule targets.

Trigon manages the process and the project, ensuring interactive communications, coordination of resources, and joint resolutions of problems that might threaten the schedule or the budget.

"This approach drives all the contingencies out of the project budget. Everyone works together to reduce project costs, as they all have the same incentive. Everyone works together to manage and reduce project risks as well," Asselin says.

Other creative financial incentives, including revenue sharing resulting from early project completion, can also be developed for members of the team.

"Using this approach, the entire team wins together and shares the benefits of winning, or the entire team loses together. In any case, it is a true team approach to projects," Asselin says.

According to Asselin, Trigon has implemented the Alliance concept on three recent projects and has negotiated terms for a fourth. These projects, with a combined value of more than $60 million - have proven the concept's effectiveness.

"Using the Alliance for Success approach, our project teams have been able to set aggressive cost targets, meet them, and reduce scheduled completion times. These things have resulted in the opportunity for our clients to increase their revenues by being on-line sooner than anticipated," Asselin said.

"There are many aspects to the Alliance for Success that generally take some convincing early on," Asselin said, as the approach requires trust and teamwork from team members that have not worked this way in the past.

"When you can complete a project early, pipeline companies and gas producers can begin to make money earlier, and that helps to convince everyone of the value of such an innovative approach," he said.

"In this time of heightened competition, the companies that thrive will be those that can adapt to an attitude of true teamwork, that can revise their thinking constantly, and can re-invent their processes and operations to meet the new demands of our highly competitive market," Asselin said.

For more information on the Alliance for Success and Trigon's engineering and construction services, be sure to visit the Trigon booth at the Colorado Oil and Gas Association's Rocky Mountain Natural Gas Conference, scheduled for August 13, and 14 at the Adam's Mark Hotel in Denver. Or, call Stu Asselin at (303) 296-9645, ext. 267.