Saep 14

Engineering Procedure
SAEP-14 18 January 2009

Project Proposal
Document Responsibility: Project Support and Controls Dept.
Saudi Aramco DeskTop Standards

Table of Contents
1 Introduction………………………………......... 2
2 Applicable Reference Documents……..….… 3
3 Proposal Contents and ER Estimate……...... 5
4 Project Improvement Effort……………….… 22
5 Reporting and Review Requirements…....... 27
6 Approvals and Waivers…………………....... 30
7 Contract Bid Package…………………….…. 33
8 Exhibits……………………………………...... 34
Exhibit I – Project Proposal Checklist………….. 36

Exhibit II – ER Estimate Package Checklist....... 38
Exhibit III – Contract Development Checklist….. 40
Exhibit IV – Benchmarking Data Sheet………… 42
Exhibit V – Bid Quantification Summary............. 46
Previous Issue: 20 September 2006 Next Planned Update: 15 August 2011

Revised paragraphs are indicated in the right margin Page 1 of 48
Primary contact: Branton, Minh A on phone 873-9526
Copyright©Saudi Aramco 2009. All rights reserved.

Document Responsibility: Project Support and Controls Dept. SAEP-14
Issue Date: 18 January 2009
Next Planned Update: 15 August 2011 Project Proposal
1 Introduction
This procedure outlines the requirements for preparing the Project Proposal and
Expenditure Request (ER) Estimate package. The procedure is not intended to give
instructions on the engineering effort, but to cover requirements that are important
during the Project Proposal process. In summary it covers:
 Engineering specifications, standards and selected design requirements
 Quality, cost reduction and schedule improvement techniques, i.e., benchmarking,
value engineering and value practices
 Project Proposal reporting, review, approval & waiver requirements
 ER Estimate preparation requirements
 Project Proposal, ER Estimate Package & Contract Development Checklists
 Contract Bid Packages
The intent of the checklists is to insure compliance with key requirements. They are not
intended to cover all detailed requirements of this procedure.
1.1 Definition
The Project Proposal is a document, which establishes the preliminary (front

end) engineering scope definition, cost estimate basis and schedule for a
proposed facility from the requirements included in the Design Basis Scoping
Paper (DBSP) and the approved Project Execution Plan (SAEP-12). This
includes the proposed facility design, general layout and the appropriate
functional and performance specifications including the recently published
applicable standards & codes. Project Proposal shall be of sufficient detail to
prepare a ±10% accuracy ER estimate, provide sufficient technical information
for Saudi Aramco review and (where applicable) provide sufficient information
to obtain detailed engineering, procurement and construction contract bids in
accordance with the approved Contracting Plan.
1.2 Purpose
The Project Proposal documents the agreement on, and commitment to, the
project scope, the project cost and design basis by the Saudi Aramco Project
Management Team (SAPMT), Facilities Planning Department, Project Support
& Controls Department, Proponent and other technical support groups. This is
accomplished through careful evaluation of the project objectives during Project
Proposal preparation to ensure the optimum results. The Project Proposal
establishes the basis for Expenditure Request (ER) funding and is the baseline
from which all subsequently considered scope changes are measured.
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1.3 Preparation Timing
Project Proposals must be completed and approved in time to support the

Expenditure Request Approval (ERA) date.
A complete ER Estimate Package must be submitted to Project Support &

Controls Department / Project Controls & Estimating Division (PS&CD/PCED)
at least 4 weeks prior to the 56D Estimate submittal due date to FPD Budget
Director, as per the Capital Program ER Processing Schedule for Board
EXCOM and local approval. Refer to Section 3.4.2 through 3.4.6 for ER
Estimate Preparation requirements. Approved Project Proposal from SAPMT
Department Manager, Facilities Planning and Proponent organization signatory
is a mandatory requirement prior to issuance of the ER Estimate (Saudi Aramco
Form 56D) to Budget Director.
1.4 Application
With the exception of Master Appropriation projects, Saudi Aramco requires a

Project Proposal and ER Estimate for all Capital, Non-Capital and Expense
Projects, valued more than $2 million, under the control of Engineering and
Project Management (E&PM). The Project Proponent and SAPMT shall agree
and document the level of detail needed prior to start of the Project Proposal.
Projects that combine the preparation of DBSP and Project Proposal into one
effort shall ensure that the requirements identified in this document which are
relevant to the Project are met.
2 Applicable Reference Documents
The latest edition of the applicable reference documents shall be applied:
Saudi Aramco Engineering Procedures

SAEP-12 Project Execution Plan
SAEP-13 Project Environmental Impact Assessments
SAEP-25 Estimate Preparation Guidelines
SAEP-31 Corporate Equipment and Spare Parts Data
Requirements
SAEP-140 Project Training Impact Assessment
SAEP-302 Instructions for Obtaining a Waiver of a
Mandatory Saudi Aramco Engineering
Requirement
SAEP-303 Engineering Reviews of Project and Detail Design
Engineering Documentation
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Saudi Aramco Engineering Report

SAER-5437 Guidelines for Conducting HAZOP Studies
Saudi Aramco Engineering Standards (SAESs)
Saudi Aramco Materials System Specifications (SAMSSs)
Saudi Aramco Cost & Scheduling Manual
Saudi Aramco Construction Safety Manual
Saudi Aramco Safety Management System
Saudi Aramco Form and Data Sheet

8362-ENG Certification of Review of Saudi Aramco Materials
Source Documents
General Instructions
GI-0005.002 Loss Prevention Policy Implementation
GI-0020.500 Expenditure Control – Expenditure Request
Forms
GI-0020.520 Project Change Request
GI-0202.309 Allocation of Costs – New Facilities Start-up
GI-0202.451 Engineering Work Order Authorization for
Preliminary Engineering Preparation
GI-0400.001 Quality Management Roles & Responsibilities
Design Basis Scoping Paper (DBSP) and applicable Study Documents
Corporate Loss Prevention Manual
Project Management Loss Prevention Program
Supply Chain Management Manual
DC Surplus Materials - Plant M011 of SAP system
MVG076-01, “DC Surplus Deferred Materials System”
Unrestricted Use Materials of SAP system (for SAMS Excess Materials)
Saudi Arabian Manufactured Materials Listing from SAP
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Saudi Arabian Government Safety and Security Directives (SSDs)
Construction Industry Institute (CII) Publications
3 Proposal Contents and ER Estimate
The following sections outline the items normally included in Project Proposals.
3.1 Table of Contents
3.2 Technical Requirements
3.2.1 Project Summary
This section provides a history of the existing conditions, a brief

discussion of the proposed facilities and their justification, outlines the
project objectives/scope and schedule, and briefly describes how these
objectives will be achieved.
3.2.2 Project Description
This section provides scope and design information that establishes the
performance specifications for the facilities, process, waivers or
limitations. It shall address details concerning the design basis, proposed
facilities including equipment design, capacities, location/layouts and
other project related information. The list below provides common
elements found in a typical scope.
1) Facility/plant layout and location
Note: The project scope boundaries and interfaces with other related
facilities must be clarified prior to developing the scope of the
project in the project proposal phase.
2) Facility/process description, design basis and performance

specification
3) Process Flow Diagrams (PFDs) including heat and material
balances
4) Major mechanical, electrical, and utility requirements (type and
quantity)
5) Electrical one-line diagrams electrical area classification drawings
6) Piping and Instrumentation Diagrams (P&IDs)
7) Temporary and permanent on-plot and off-plot facilities
8) Site survey, topography and soil data (Geotechnical Investigation)
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9) Demolition and modifications to existing facilities/plants

10) Operating variables (as required by OSPAS)
11) Corrosion control
12) Impact on and interface with other related projects
13) Environmental Impact Assessment (see SAEP-13)
14) Security, fire protection & safety provisions (if required, Hazard
Identification Plan of Major Hazards, fire hazard zone drawings,
and fire system layout drawings)
15) Communications, including government approvals if required
16) Control systems (including SCADA) provided with Control System
Block Diagram or System Architecture, instrument index,
instrument cable routing and I/O count breakdown
17) Project Execution Plan/Schedule
18) Training requirements
19) Land use permits for new facility sites or addition of facilities
within existing plants. Include Proponent approved permits for lay-
down areas, staging areas and office sites
20) Strategy for project compliance with Project Quality Plan
requirements
21) Process & utilities system definition and turnover sequence
22) Piping, electrical and control system tie-in /hot tap plan
23) Studies & calculations developed during Project Proposal (i.e.
ETAP study, PHA study, process simulation, etc.). All required
engineering studies, including those defined in DBSP, must be
carried out regardless of contracting strategy adopted, e.g., LSTK,
LSPB, etc.
24) Site Investigation Report
25) Project Risks Assessment Report
3.2.3 Scope Change from DBSP

A) Definition of Scope Change
A scope change is defined as any deviation from the Approved

DBSP. Following are examples of typical scope changes:
1. Equipment capacity and sizing changes
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2. Addition or deletion of equipment from the original list

provided to PS&CD in conjunction with the DBSP for
preparation of the budget estimate
3. Plot plan changes
4. Process control plan or system changes (changes in I/O
counts, type of control system, etc.)
5. Other design changes as a result of the following:
 Environmental Impact Assessment
 Preliminary Hazard Analysis (PHA) or Hazard and
Operability (HAZOP) studies
 Project risk assessment
 Underground obstructions such as rock or utilities
interferences, etc.
 Building Risk Assessment or any other Loss Prevention
requirements
 Savings realized from Value Engineering and other Value
Practices
 Site investigations
B) Notification of Scope Change
SAPMT shall promptly notify FPD, in writing, of any scope

change with the cost and schedule impact and justification as soon
as changes are identified. This allows timely assessment by FPD
of the impact of these changes to the project. Change will be
incorporated in the project scope based on FPD's assessment. All
approved scope changes shall be communicated to PS&CD.
C) Implementation of Scope Change
If accepted for implementation, FPD shall issue a formal letter or

DBSP amendment to SAPMT within two (2) weeks of the initial
submittal and distribute a copy to PS&CD.
D) Recording of Scope Change
All scope changes shall be recorded in a special section in the

Project Proposal package and ER Estimate Package. This section
shall contain a list of all scope changes with justification, cost
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impact, schedule impact, initiator organization, date

initiated/approved and any supported cost estimate documents.
SAPMT shall maintain the list of the scope changes and

continuously update it from the start of Project Proposal until the
ER Estimate is complete.
3.2.4 Communication Requirements
Saudi Aramco construction projects normally require both temporary

(during construction) and permanent communication systems. As
procurement approval for radio frequencies and materials involves long
lead times, communication systems require early identification and
coordination between Information Technology organization and
SAPMT. To facilitate these requirements, the Project Proposal shall
contain the following:
a) Summary of temporary and permanent communication system
requirements. Identification of additional communication facilities
and/or modification to existing facilities necessary to meet the
project requirements.
b) Identification of communications requirements to be handled by
Information Technology organization and those, which shall be
provided and funded by the project.
c) Schedule of communication material requirements with an
estimated site required delivery date.
d) Identification and implementation plans of all communication
disaster recovery and business continuity aspects of the projects.
3.2.5 Safety and Security Directive (SSD)
The SSD (reference SAES-O series) shall be adhered to by all projects,

with exception of home-ownership & utility projects, in accordance with
the directives given to Saudi Aramco by the Saudi Arab Government's
Supreme Commission for Industrial Security. The SAPMT shall contact
Consulting Services Department, Dhahran and the Safety and Industrial
Security organization to obtain current safety and security requirements
before proceeding with Project Proposal engineering. A separate section
in the Project Proposal shall be devoted strictly to safety and security
requirements.
3.2.6 Preliminary Hazard Analysis (PHA)
The objective in performing PHA studies is to improve process safety
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and/or minimize operability problems. The SAPMT in conjunction with

the Loss Prevention Department (LPD), and Environmental Protection
Department (EPD) shall decide which projects and specific facilities
require PHA studies. Duplicate facilities shall not require a new PHA
study. Only new or upgrade facilities that use, produce, process,
transport, or store flammable, explosive, toxic or reactive substances in
large quantities are candidates for PHA studies.
The PHA studies shall normally be conducted during the Project

Proposal stage. The Hazard and Operability (HAZOP) studies, if
required, shall be performed during the detail design when the facility
design is firm and no major design changes are forecasted.
For buildings, a building risk assessment shall be performed when

required by SAES-B-014.
Any cost impact as a result of the PHA studies or building risk

assessment must be identified and included in the ER Estimate package.
3.2.7 Environmental Impact Assessment (EIA)
EIA is required at the early stage in project planning. SAEP-13, “Project

Environmental Impact Assessments,” establishes the procedures
necessary to prepare the environmental impact assessments which shall
be submitted to Environmental Protection Department Manager by the
30% Project Proposal stage for review and approval. EPD will forward
the final EIA document to the Ministry of Petroleum and Mineral
Resources for their approval. Approval by the Ministry is required for
all capital projects prior to expenditure request. Any cost impact as a
result of the Environmental Impact Assessment must be identified and
included in the ER Estimate Package.
An environmental impact assessment:

 describes and quantifies project actions
 identifies those discharges and emissions regulated by environmental
standards
 predicts the environmental changes resulting from the project, and
 demonstrates compliance with applicable Saudi Aramco and/or Saudi
Arab Government environmental standards and policies.
The discovery of new information or significant project changes that

impact a previously completed and EPD approved EIA may result in
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cancellation of the existing assessment and re-submittal of an amended

EIA to EPD for approval.
The full environmental report with appropriate calculations is to be

included with the Project Proposals issued to Environmental Protection
Department, Technical Information Center (TIC) Dhahran, and
Corporate Information Center (ASC) Houston. All other volumes will
contain a summary only.
3.2.8 Obtaining a Waiver from Saudi Aramco Engineering Standards and

Materials System Specifications.
Identify standards, procedures, equipment and materials that will require

a waiver prior to incorporation into the facilities.
3.2.8.1 Projects shall meet the requirements of Mandatory Saudi

Aramco Engineering Requirements (MSAERs), which are in
effect on the Project Proposal approval date. Changes to
MSAERs approved after the Project Proposal approval date
shall be mandatory only when:
 the changes affect safety, health, environment or security

highlighted by the concerned organization. In this case, the
impact of the changes on the project should be reviewed by
Project Management with the Proponent, Loss Prevention,
Industrial Security Operations, Facilities Planning
Department, Project Support and Controls Department,
Process and Control System Department, Information
Technology, and others to determine applicability and
extent of implementation.
 the changes result in cost savings to the project. In this

case, SAPMT, Proponent and Engineering Services shall
review and decide on implementation.
A Project Change Request (PCR) shall be initiated to document

and obtain approval to implement changes after the project has
been funded (Refer to GI-0020.520, “Project Change
Request”).
3.2.8.2 Include waivers (reference SAEP-302 – “Instructions for

Obtaining a Waiver of a Mandatory Saudi Aramco Engineering
Requirement”) that shall reduce project cost without impacting
design, safety or operational integrity of the facility.
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Describe the variation in sufficient detail to permit technical

evaluation by the appropriate reviewing agency.
Include copies of waiver applications and approvals.
Any approved waiver that has an impact on the Project must be

identified in the Project Proposal and ER Estimate package.
3.2.8.3 Deviations from SSD requirements shall be submitted in a

letter format as per SAES-O-100 (General Requirements for
Safety & Security) that describes the variation in sufficient
detail to permit technical evaluation by the appropriate
reviewing agency.
3.2.9 Drawing Index and Drawings
This section provides a list and copies of the drawings that define the
scope of the project. It shall include key drawings such as PFDs, P&IDs,
plant and equipment layouts, electrical one-line diagrams and other
necessary drawings that are required to establish the design basis and
assist in producing an ER quality estimate.
3.2.10 Project Quality Plan
SAPMT shall prepare a Project Quality Plan in accordance with

GI-0400.001 (Quality Management Roles and Responsibilities). The
SAPMT shall also ensure that the specific requirements for inspection
are included in Schedule “Q” Attachment VI for all applicable contracts.
3.3 Materials Related Requirements
3.3.1 General
The Project Proposal provides a table of major materials and equipment

identified for the project. During preliminary engineering, the
Engineering Contractor, with guidance from the SAPMT, shall review
the Company DC (9COM) Surplus and Excess (9CAT) using SAP
MMBE transaction to identify all acceptable or substitute materials
which are available in Saudi Aramco inventories for possible use on the
project, with the objective of:
a) Incorporating materials, which require the least new cash outlay to
Saudi Aramco
b) Making maximum economic use of the materials available from
surplus and excess cataloged material inventories
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c) Making maximum economic use of locally manufactured materials

d) Providing full justification for any proposed purchases of
contingent quantities or non-installed spares
During Project Proposal preparation, the SAPMT shall request review,

and may request assistance from the Materials Supply (MS) on all
portions of the plan that involve materials related aspects of the work.
SAPMT will continue to be responsible to ensure that the purchase order
is in acceptable technical compliance with relevant MSAERs during the
time the Contractor is handling the order. Purchase Orders for
inspectable materials shall be reviewed by Inspection Department prior
to placement, to ensure compliance with the Regulated Vendor List,
Technical and Quality requirements.
If procurement of major equipment and materials is on the critical path

of the project schedule, SAPMT may elect to consider “novation” of
these items to reduce their impact on the project schedule. “Novation”
typically involves:
1. placement of purchase order by the Management Contractor or
Project Proposal Contractor with commitment only for engineering,
and
2. after ERA, transfer the purchase order to the successful LSTK
Contractor on contract award.
The purchase order transferred to the LSTK Contractor will cover the
complete scope involving engineering and manufacture. Use of novated
purchase orders should be approved by Services Review Committee
(SRC) either as part of the contracting plan or as an individual item.
3.3.2 Material Source List
The materials source list identifies major equipment and material items.
Where possible, an estimated dollar value and quantity required shall be
indicated. Also indicate responsibility for inspection, expediting, traffic
and transportation. The Project Proposal effort shall develop Quotation
Requests (QRs) for major engineered equipment and critical items, and
issue these QRs to vendors on a “For Development Only” basis to
determine prices and delivery schedules. For purpose of preparing the
ER Estimate, the major equipment list shall include account number, the
item number, a brief description, the data sheet, a requisition number if
available, the estimated value and other pertinent information. The
following areas shall be segregated:
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a) Surplus Materials - 9COM Materials in Plant M011

b) Excess Cataloged Materials - Unrestricted use 9CAT Materials in
SAP transaction MMBE
c) Locally manufactured materials and vendor warehoused materials
(LDOR)
d) Cataloged Materials Reservation (9CAT)
e) Non-cataloged Materials (9COM)
f) Contractor procurement Lump Sum Turnkey (LSTK) or Lump
Sum Procure/Build (LSPB)
g) Sole source materials and equipment
3.3.3 Use-up Target Values
The Surplus Inventory and the Excess Cataloged Materials Listings shall
be reviewed to prepare the listing and estimated values of possible
surplus and excess usage. During the Project Proposal development, this
list shall be further refined to set the target values for use-up of those
items that shall be reported during the life of the project. LSTK or LSPB
contracts shall use the same format and shall estimate total commodity
(9CAT) and engineered (9COM) material costs (regardless of originator)
as the basis for determining use-up values. The target values are goals
requiring extra effort to achieve rather than just a restatement of the
original major items listed in section 3.3.2.
3.3.4 Locally Manufactured Material
During Project Proposal development, the SAPMT shall obtain a current

list of approved locally manufactured products and sources from MS.
This list shall be provided to LSTK & LSPB Contractors to encourage
use of locally manufactured materials.
3.3.5 Critical Plant Equipment Unit Spares
A list of proposed installed spares for critical plant unit equipment and a
list of non-installed capital spares proposed for entry into Saudi Aramco
stores custody shall be provided along with the estimated cost for each
item and justification for purchase. Comparison shall be made between
spares specified in the Design Basis Scoping Paper and spares specified
in the Project Proposal.
3.3.6 Start-up Spare Parts
Construct-only project materials furnished by Saudi Aramco need not
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address this subject because spares shall be furnished per SAEP-31

(Corporate Spare Parts Data Requirement). For Procure/Build contracts,
the SAPMTs shall specify start-up spare responsibility including how
they shall be provided, the financial impact of purchase and final
disposition of residual spares.
The LSTK Contractor is responsible for providing start-up spares.

Residual and/or unutilized start-up spares remain Contractor's property;
such spares may not be purchased from the Contractor by Project
Management. Proponent at their discretion has the option to purchase
these residual spares against their Operating Budget for future use.
Operations shall communicate with MS (Materials Control Department)
to ensure the spares are reviewed against overall inventory needs, and do
not adversely affect existing supplies. Defined start-up spares may be
turned over to Saudi Aramco in accordance with the contract
requirements provided that the quantities and types are in accordance
with the Saudi Aramco stocking policy. For LSTK and LSPB contracts,
start-up spares responsibility for “free issue” equipment provided by
Saudi Aramco shall be stated clearly in the contract.
SAPMT and the respective Contractors are responsible for the spare
parts as outlined under SAEP-31. In all cases, the SAPMT/Contractors
shall provide complete and accurate spare parts data packages necessary
to support Saudi Aramco procurement of operating spare parts.
3.4 Scheduling & Estimating Requirement
3.4.1 Scheduling Requirements
This section contains a Level III project summary schedule that shall be
developed during the Proposal phase based on information from the
Project Milestone Schedule, WER Schedule and other data as they
become available during the DBSP and Project Proposal.
Project Summary Schedule should be developed as soon as Preliminary

Engineering starts and will be used as a “working” tool in the absence of
a detailed schedule by Contractor. The Project Summary Schedule shall
be used as a guide for ER estimate preparation, early identification of
long lead material procurement items, Contracting Strategy and technical
evaluation of Contractors and start-up planning. As-Built schedules
from similar projects can be made available from PC&ED Scheduling
Group to be used as a guide for the initial preparation of the Level III
schedule.
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Project Summary Schedule addresses all the project life cycle activities
in a summary format. It must be logic driven, based on the Critical Path
Method (CPM). The Schedule should contain sufficient detail to show
potential material or equipment “novation”, long lead items, contract
procurement activities, detailed engineering by discipline leading to
major deliverables, mobilization, early works, shutdown, tie-ins, testing,
loop checks, pre-commissioning, start-up, interface with Proponent and
other projects.
Project Summary Schedule shall also include ER estimate preparation

and approval activities including Estimate Kick-off, milestone dates for
Scope Compliance and any ER Estimate reviews or any other design
reviews, MTOs for the relevant disciplines, equipment pricing,
NOVATION of equipment and/or Prior Approval Expenditure Request
(PAER), Technical Review Meetings, and the final approval of the
Project Proposal and 56D preparation and submittal to the Facility
Planning Department (FPD).
The schedule shall form the basis for the original (Rev.0) Project
Completion Schedule (PCS). The Project Summary Schedule further
expands the level of detail while still supporting critical and key
milestone dates defined and prescribed in the contract (Schedule “B”).
Project Summary Schedule is expanded to include critical milestone
dates as well as any other key milestones that are provided by
Contractors. If “novation” material and equipment is included in the
execution plan, the date of purchase order and required delivery date
should be incorporated in the schedule. The schedule shall include
review time requirements specified in SAEP-303 (Engineering Reviews
of Project and Detail Design Engineering Documentation). Contact
Scheduling Engineering Group of PS&CD/PCED for more detailed
information on Project Summary Schedule.
3.4.2 ER Estimate Requirements
Project Proposals must be completed and approved in time to support the

Expenditure Request Approval (ERA) date. A complete ER Estimate
Package must be submitted to PS&CD, at least four (4) weeks prior to
submittal of 56D Estimate to FPD Budget Director as per Capital
Program ER Processing Schedules for Board, EXCOM and local
approvals.
SAPMT shall be responsible for preparation of the ER Estimate package:

 in accordance with SAEP-25 (Estimate Preparation Guidelines)
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 in conformance with the Work Breakdown Structure and Standard

Code of Accounts (SCA) established by SAPMT and PS&CD
 to achieve a quality estimate with an accuracy of (±10%) of project
final cost
 using the Estimating Tool Aspentech Kbase, particularly for oil and
gas process facilities, as a preferred estimating software. Selection of
any other estimating tool should be discussed with PS&CD.
Effective January 2008, Aspentech KBase shall be used as a mandatory

estimating tool in the preparation of the ER Estimate for oil and gas
projects greater that $100 million. Waiving this requirement must be
approved by the PS&CD Manager.
The final ER Estimate shall be jointly reviewed and approved by

PS&CD and SAPMT.
3.4.3 ER Estimate Review Meetings
Initial, Interim and Final ER Estimate review meetings will be held by

members of SAPMT, Engineering Contractor, and PS&CD during the
course of Project Proposal phase. SAPMT will be responsible for
organizing the meetings, providing the required documents to PS&CD
prior to review meetings and inviting all concerned parties to participate
in the ER Estimate Review meetings.
A) Initial Kick-off Meeting
The initial kick-off meeting will be conducted before the 30%

completion of Project Proposal. An ER Estimate Plan, as described
in Section 3.4.4, shall be prepared and completed prior to the Kick-
off Meeting. PS&CD will take an active role in defining Saudi
Aramco ER estimate preparation requirements and providing basic
information to the SAPMT and Contractor.
B) Interim ER Estimate Review Meetings
The purpose of the interim meeting is to review the progress of the

ER estimate preparation activities. The number of interim
meetings should be established during the initial ER Review
meeting.
Minimum one (1) week prior to the review meeting, SAPMT shall
provide a complete set (hardcopy and electronic file) of the ER
Estimate with support documents to PS&CD for review.
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The interim review meeting deliverables shall include, but not be

limited to:
 ER Estimate as developed to date, with MTOs by Area and
WBS
 ER Estimate Basis
 ER Estimate Detailed Schedule
 Multiple Discipline Drawings including PFDs, P&IDs, Plot
Plans, One Line Diagrams, etc.
 A list of all scope changes from the DBSP identified to date.
The list will include itemized scope changes with justification
and cost/schedule impact for each deviation item (per Section
3.2.3)
 Major equipment quotations
 Recent quotations for Engineering and Construction rates
 All discipline Material Take-offs (MTOs) by Area and WBS
 Market Outlook study, as required
 Project Risk Assessment, as required
C) Final ER Estimate Review Meeting
1. A complete ER Estimate Package must be completed in

accordance with the established ER Estimate Plan and
submitted to PS&CD/PCED at least four (4) weeks prior to the
56D Estimate submittal due date to FPD Budget Director.
Refer to Section 3.4.5 for ER estimate deliverables.
2. After receipt of the ER Estimate package, PS&CD will conduct

a meeting with SAPMT and Engineering Contractor to review
and finalize the estimate as deemed necessary.
3. Minimum of two (2) weeks prior to 56D Estimate submittal due

date to FPD Budget Director, SAPMT shall provide PS&CD
the Project Proposal sheet approved by SAPMT, FPD and
Proponent and a copy of the Technical Meeting minutes with a
complete list of all finalized items with detailed cost estimate of
impacted items. These documents are required for finalizing
the 56D Estimate for submittal to FPD Budget Director.
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When the ER Estimate is over or under by more than 10% of the

Budget Estimate, PS&CD and SAPMT shall jointly prepare a
scope reconciliation and comparison between the approved Budget
and the established ER Estimate. The review shall include a list of
all scope changes from DBSP which will be part of the ER
Estimate package.
D) Scope Compliance Review Meetings
Compliance Review meetings will be conducted, as deemed

necessary, by SAPMT in coordination with FPD and PS&CD to
ensure that the scope of Project Proposal is in compliance with the
approved DBSP.
SAPMT shall prepare and provide all attendees with a complete list
of accepted scope changes and relevant supported documents for
the Scope Compliance Review meetings. PS&CD shall be
responsible for validation of cost and schedule impacts for all
scope changes.
3.4.4 ER Estimate Plan
SAPMT shall be responsible for developing an ER Estimate Plan which

will be reviewed and discussed during the initial kick-off meeting. At
the minimum, the ER Estimate Plan should contain:
 Project scope of work
 Site development plan and investigation
 A detailed schedule with major and interim milestones for
completing the ER Estimate deliverables
 A quality control plan for estimate preparation
 Specific plan and methodology for performing market outlook and
project risk assessment for selected projects greater than $300 million
(refer to Section 3.4.6)
 Methodologies for developing estimate basis, material take-offs
(MTOs), pricing of material and equipment, unit rate for engineering
and construction based on current market conditions and project risk
assessment
 Plan and methodology for developing internal and external
benchmarking
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 Identification of estimating software to be used for preparation of ER

Estimate
 Work Breakdown Structures (WBS) and Standard Code of Accounts
(SCA) to be used for the project
 A list of ER Estimate deliverables required for interim review and
final review
 An organization chart of the estimating team
 Roles and responsibilities of all involved parties in developing the
ER Estimate and identifying point of contact from each organization
3.4.5 ER Estimate Deliverables
The ER estimate will be based on 100% Project Proposal which includes

equipment lists, equipment sizing, plot plans, P&ID, single line
diagrams, cable schedules, instrument index summaries, I/O counts, bulk
material take-offs, and other related project documents and drawings.
The following major contents of deliverables should be included in the
ER estimate package:
 Approved Project Proposal
 Drawings, specifications, reports and other relevant documents
necessary to define the project requirements
 Approved Execution and Contracting Plan
 Project Summary Schedule
 An ER Estimate package which includes a hard-bound copy and an
electronic copy on a CD with all required backup documents as
specified in SAEP-25
 A complete list of all scope changes from the DBSP that will be
implemented in the Project Proposal. The list will include itemized
scope changes with justification and cost/schedule impact for each
deviation item
 Copies of Technical Review Meeting Minutes
 Copies of ER Review Meeting Minutes with status of outstanding
and implementation items
 Copies of PHA or HAZOP Meeting Minutes with summary of
changes, if applicable
For detailed listing of deliverables, refer to the Exhibit II, ER Estimate
Page 19 of 48
Package Checklist.
3.4.6 Market Outlook Study & Project Risk Assessment
PS&CD/PCED will coordinate with SAPMT to identify projects worth

$300 MM or greater that will be required to do a Market Outlook Study
and Project Risk Assessment. Market trends and project risks are
assessed to avert potential impacts on project development and
execution. Results of these studies shall be included in the basis of
estimate and contingency rates shall be recommended accordingly.
These shall include, but not be limited to, the following:
 Worldwide demand for Engineering and Construction services
 Market conditions that affect major equipment procurement pricing
and delivery
 Trends related to supply and demand of major equipment and bulk
material in the Middle East that could affect schedule and costs on
the project
 Availability of Engineering Contractors to undertake LSTK contracts
in Saudi Arabia
 Assessing the financial markets and institutional support for current
and future Middle Eastern projects
 Project risks study on constructability, tie-in execution,
environmental, security and other factors related to a specific project
 Forecast of Engineering Contractors Overhead and Profit Margins
 Any other factor that can impact the future cost of the project
Following are some of the resources that can be used in developing a

Market Outlook study:
 Trade Organizations
 Trade Magazines
 Financial Institutions’ studies and surveys
 Government studies and surveys
 Industry studies and surveys
 Manufacturers and Suppliers data
3.5 Appendix
The Appendix shall include letters, minutes, land use permits and other pertinent
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documents written during Project Proposal development.
3.6 Numbering Project
All Project Proposals shall be numbered by the issuing office as follows:
Saudi Aramco APP Series (Numbers assigned by the Technical

Information Center, Dhahran)
ASC TPP Series (Numbers assigned by the Corporate

Information Center, Houston)
APP or TPP numbers shall be on the Project Proposal cover sheet.
3.7 Training Impact Assessment
SAEP-140 (Project Training Impact Assessment) requires that a Training Impact

Assessment be prepared as part of the Project Proposal for all projects for which
training programs for operations and/or maintenance personnel will be required.
These training programs will not be provided by the project and costs for training
are not be paid for by capital funds. (Refer to GI-0202.309, Paragraph 4.5)
The Proponent is responsible for identifying any training requirements for a

project by preparing a Training Requirement Statement prior to the start of the
Project Proposal.
If training is to be required, a Training Impact Assessment is to be prepared in

accordance with SAEP-140. SAPMT is responsible for incorporating the
findings of the Training Impact Assessment in the final Project Proposal.
SAPMT may also be required to implement the findings of the Training Impact
Assessment as included in the approved Project Proposal. These may include:
3.7.1 Incorporating contract provisions that require the Contractor to develop

multiple quotations for specified equipment so that the cost of training
can be taken into consideration when selecting the life-time, low-cost
supplier. These provisions will allow Saudi Aramco to direct the
Contractor to place its order with one of the proposed technically
acceptable suppliers and will provide for additional payment to the
Contractor if the selected supplier did not offer the lowest base price to
the Contractor.
3.7.2 Incorporating requirements for the Contractor to include provision in its

purchase orders for specified equipment that establish fixed prices for
training services or material to be procured at a later date by Saudi
Aramco. This will reduce the possibility of a supplier overcharging
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Saudi Aramco when training services or materials are procured on a

single-source basis.
4 Project Improvement Effort
This section comprises of activities that on implementation would optimize project cost &
schedule, improve quality of the Project Proposal and assure project execution success.
4.1 Value Engineering
Value Engineering (VE) is an organized analytical process that can be used to

optimize the life cycle cost and performance of a facility or system. The VE
process systematically identifies opportunities to increase value by removing
unnecessary costs without sacrificing quality, function, or reliability.
4.1.1 VE Study Selection Criteria
SAPMT shall initiate a formal VE study during the Project Proposal

development stage when:
 The estimated BI value exceeds $50 million, or
 The estimated BI value is between $10 – $50 million and a VE study
was not conducted during the pre-planning or DBSP development
stage, or
 The estimated BI value is between $10 – $50 million, and the pre-
planning or DBSP stage VE Report recommends that a Project
Proposal stage VE study is required.
4.1.2 VE Study Planning & Coordination
VE studies should be completed during the early phase of the Project

Proposal, but not later than the 30% completion milestone date. For
scheduling purposes only, VE studies shall be coordinated with the Capital
Program Optimization Division of Project Support & Controls Department
(PS&CD/CPOD). The requirements for conducting VE studies shall be
identified in the Project Proposal Contractor’s scope of work.
VE studies shall only be facilitated by either a Certified Value Specialist

(CVS), or local Engineering Contractor personnel who have been
certified by PS&CD/CPOD to conduct VE sessions.
Requests for VE study guidance, and information on Consultants and

local Engineering Contractor personnel certified to facilitate VE sessions
should be directed to PS&CD/CPOD.
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4.1.3 VE Proposal Implementation & Reporting Requirements
The effectiveness of a VE study depends on the successful

implementation of accepted proposals and on the prompt resolution of
pending proposals. VE proposals that are accepted by the Proponent
Organization and SAPMT are to be reviewed by FPD, and CSD if
related to standards requirement, before being incorporated into the
Project Proposal Scope of Work.
The status and resolution of all accepted and pending VE proposals shall
be documented in the Value Engineering Section of the Project Proposal.
A copy of the final VE Report shall be distributed to the PS&CD/CPOD

Division Head.
4.2 Benchmarking
Benchmarking is an improvement process used to discover and incorporate

project cost, schedule, front-end loading, value improvement and operability
into project execution strategy.
The benchmarking process will be centralized so that all benchmarking activities

are managed through PS&CD/PCED. Benchmarking will be conducted at
study, late stages of the DBSP, early stages of the Project Proposal as well as
towards the completion of a project. Projects will be selected by PS&CD for
either external or internal benchmarking.
The objective of Benchmarking analysis at the early stage of Project Proposal is

to identify and compare key project parameters such as project scope, quantity,
cost, schedule, value practices and execution strategy, against the Company’s
internal historical statistics of similar projects. The project data also are used for
benchmarking against the industry world class projects with similar scope. The
result of the benchmarking analysis can be used for improving project execution
plan.
4.2.1 Internal Benchmarking Requirements
For all projects except community projects, school and home-ownership,

SAPMT shall provide key project data to PS&CD/PCED for internal
benchmarking purposes. A sample of benchmarking data sheet is shown
in Exhibit IV. This internal benchmarking data will be part of the ER
Estimate package.
4.2.2 External Benchmarking Requirements
PS&CD/PCED will coordinate with SAPMT to identify projects with
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value of $100 MM or greater to be benchmarked. Projects less than

$100 MM may be benchmarked if related to core business.
PS&CD/PCED will perform the leading role for the selection of the
Consultant, development of benchmarking criteria, and implementation
of the formal benchmarking study.
The analysis starts as early as the study phase and DBSP, or at any
appropriate stage of the Project Proposal development, but no later than
90% Project Proposal progress, comparing key parameters of the project
with an external industry-wide database. The analysis would address
key project outcomes and associated risk based on the Project Proposal
effort to date. As a minimum, the following areas should be addressed
and compared to industry norms, the Gulf Region and Best in Class:
 Status of front-end loading (FEL), i.e., project definition, at the time
the benchmark analysis is prepared
 Use of value improvement practices
 The projected total installed cost (TIC) of the project
 An analysis of the contingency requirement based on project scope
and FEL
 Engineering as a percentage of TIC
 Time required for total project execution (ERA through Onstream)
 Time required for the construction phase
 Expected time required for start-up
 Long lead material deliveries comparison
 General or specific requirements included in the Project Proposal
Scope of Work that are non- industry standards
 Execution strategies
A Benchmarking section shall be included in the Project Proposal book

to include the summary benchmarking report prepared by an outside
Consultant or by the Engineering Contractor.
4.3 Energy Optimization Study
Capital projects involving the addition of or modifications to industrial

processes with combined fuel and power consumption exceeding $2 million per
year (combined) shall be optimized for the efficient use of thermal and electrical
energy.
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For purposes of the energy study, an industrial process is defined as one that
includes fired heaters, boilers, pumps, compressors, steam turbines, or gas
turbines. Non-industrial facilities such as buildings, roads, warehouses, storage
depots, and non-process operations such as IT or instrumentation upgrades are
excluded.
The technical approach and work scope for the energy study should address one
or more of the following issues:
 Process Integration, using Pinch Analysis techniques
 Equipment Load Management policies
 Adjustable Speed Drives
 Driver Selection
4.3.1 A preliminary Process Integration study of the project facilities shall be

conducted only when the combined fuel consumption of the in-scope
process units exceeds 100 MM Btu/h. It is necessary only to provide the
optimum practical utility consumption targets in comparison to the utility
requirements for the un-optimized process design; detailed design of the
heat exchanger network and combined heat/power system to achieve
these targets is not required.
4.3.2 For energy consuming or conversion equipment (pumps, compressors,

turbines, boilers, and furnaces) in parallel operation, the study shall
identify the optimum number of equipment that should be operated over
the expected range of plant operating rates, considering the trade-off
between energy consumption and meeting production goals. Load
management policies are required only when the energy consumption for
a particular service or application exceeds 1000 HP (if rotating
machinery) or 16 MM Btu/h (if fuel-fired equipment).
4.3.3 The economic feasibility of Adjustable Speed Drives (ASDs), whether

variable frequency type or other, shall be evaluated for individual
motors/drivers of 2000 HP or greater. Capital costs should be balanced
against the combined energy and non-energy benefits.
4.3.4 Rotating machinery with individual power loads of 5000 HP and higher
shall be evaluated for selection of optimum driver type – electric motor,
steam turbine, or gas turbine.
4.3.5 Energy efficiency for individual items of equipment (e.g., motors,

boilers, etc.) is covered separately by Saudi Aramco equipment
standards. Evaluation of alternative equipment options is not required as
part of the energy study scope.
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The optimum time to conduct such a study is the earliest possible date after
preliminary PFDs, including heat and material balances, are available, and the
plant fuel/power consumption estimates have been determined. Generally, this
would be after 30% completion of the Project Proposal, but no later than 60%
Project Proposal completion.
The full energy optimization study report, including all supporting data and
calculations, must be submitted to the Energy Systems Unit of Consulting
Services Department for review.
4.4 Other Value Practices
SAPMT shall implement applicable Saudi Aramco and other industry value
practices during Project Proposal development to optimize project planning and
execution. PS&CD/CPOD is available to assist SAPMT in selecting the
appropriate value practices and facilitating their implementation.
The requirements for conducting specific Value Practices shall be identified in

the Project Proposal Contractor’s scope of work. Value Practice sessions shall
only be facilitated by either approved Consultants, or local Engineering
Contractor personnel who have been certified by PS&CD/CPOD. For
information on approved Consultants and local Engineering Contractor
personnel certified to facilitate Value Practice sessions, contact PS&CD/CPOD.
The following value practices have shown proven payback for Saudi Aramco
projects.
 Constructability
Effective and timely integration of construction knowledge into the

conceptual planning, design, construction and field operations of a project.
Optimum timing during project proposal phase is at 30% Project Proposal.
 Project Definition Rating Index (PDRI)
Held at 60% Project Proposal involving SAPMT, Proponent, Contractor, and

other parties as needed to measure project proposal completeness and clarity.
PDRI consists of about 70 elements that identify and very precisely
describes each critical element in a preliminary engineering scope definition
package.
 Lessons Learned
Systematic search for applicable existing lessons learned from Saudi

Aramco Project Management Lessons Learned database and other sources.
Implement applicable lessons to avoid repetition of problems and build on
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successes experienced by other projects. Also collect and submit new

lessons learned per SAEP-329 Project Close-out Report.
 Project Execution Planning Workshop (PEPW)
Half-day workshop to promote ownership, commitment, and alignment of all

project stakeholders including SAPMT, FPD, Proponent, Contracting, Loss
Prevention, and other involved parties.
 Schedule Optimization
Utilization of “Schedule Reduction” and “Schedule Compression”

techniques to optimize the schedule for project completion.
 Planning for Startup
Extensive set of tools and techniques used by all Project Stakeholders, PMT,
Proponent, Contractors, etc., to help facilitate a successful facility start-up
and stable long term operation.
 Scope Control & Change Management
Scope Control is a preventative process that starts with a detailed project

scope and ensures discipline in changing the scope during execution.
Change Management involves establishing and clearly communicating to all
project stakeholders a system for recognizing, evaluating, and implementing
changes during all phases of the project.
 Other
PS&CD will identify and implement other value practices that become
available between revisions of SAEP-14 that offer value improvement to the
project.
5 Reporting and Review Requirements
5.1 Project Proposal Distribution for Review and Meetings
Draft Project Proposals shall be distributed for review to the appropriate

members of Saudi Aramco Management and attendees of the Technical Review
and Project Proposal Meetings. Distribution of the Project Proposal narrative
shall be in electronic format (in Microsoft Word).
The E-Review electronic review system is the Company’s standard method for
review of engineering drawings and documents. SAPMT should submit review
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packages through this system unless there is a compelling reason to do

otherwise. The E-Review procedures and guidelines are provided in SAEP-303.
The SAPMT and proponent are responsible for determining the recipients. As a
minimum, the following represents a list of various organizations that shall be
considered for receipt of the Project Proposal. However, only those
organizations with direct involvement shall receive the Project Proposal.
Executive Management:
- Proponent Organizations, i.e.
Ras Tanura Refining
Northern Area Producing
Southern Area Producing
Jeddah/Riyadh Refining
Yanbu Refining
Distribution Operations
Abqaiq Plants & Pipelines
Gas Operations
Medical Services
Employee Relations
- Petroleum Engineering and Development
(for production-related projects)
General Management:
- Industrial Security Operations
- Proponent organization
Management:
- Oil Supply Planning and Scheduling Department
(for all proposals related in any way to oil, gas, NGL and/or refined product
movement and handling)
- Computer & Communications Engineering Department
(for all projects involving communications)
- Purchasing Department
- Power Distribution Department
(for all projects related to power facilities at 2.4 kV and above)
- Abqaiq, Dhahran or Ras Tanura Utilities Department
(for the area community projects only)
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- Facilities Planning Department (mandatory)

- Project Support & Controls Department (for information only)
- Consulting Services Department
- Inspection Department
- Loss Prevention Department
- Environmental Protection Department
- Process & Control Systems Department
- Roads & Heavy Equipment Department
- Industrial Security Department
- Fire Protection Department
5.2 Technical Review Meeting
The Technical Review Meeting shall be held no sooner than ten (10) working
days after distribution of the Project Proposal for review. Location, date, and
time of the meeting shall be announced in the cover letter distributed with the
Project Proposal. The Technical Review Meeting shall discuss all technical
aspects of the Project Proposal, resolve technical questions, address
environmental issues and review the Project Summary Schedule. Interim
technical review meetings shall be conducted as required by SAPMT depending
upon the type and complexity of the project. Items not resolved at the final
technical review meeting shall be addressed in the Project Proposal Meeting.
Substantive changes resulting from the technical review meeting shall be
incorporated as appropriate into the Project Proposal documents.
SAPMT shall prepare minutes of the Technical Review Meetings and distribute
the minutes, electronically whenever possible, to all persons who either received
the Project Proposal or attended the Technical Review Meeting. The minutes
shall include the estimated cost and schedule effects of major changes from the
DBSP/Project Proposal as originally prepared. Refer to 3.2.3 for definition of
major scope change.
The subject of critical plant equipment unit spares (capital spares) per section
3.3.5 shall be addressed, and proposed purchases shall be reviewed.
5.3 Project Proposal Meeting
The purpose of the Project Proposal Meeting is to resolve any outstanding items
remaining after the Technical Review Meeting and to finalize the project scope.
The Project Proposal Meeting shall be scheduled no sooner than five (5)
working days after distribution of the minutes of the Technical Review Meeting.
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The delegated representatives of the Project Proposal approval authorities

(section 6.1.1) shall attend this meeting in order to make decisions on matters
not resolved in the Technical Review Meeting.
SAPMT shall be responsible for preparing and distributing the minutes of the
Project Proposal Meeting to those persons who either received a copy of the
Project Proposal or attended the Project Proposal Meetings.
For selected small projects, the Technical Review and Project Proposal
Meetings can be combined into one meeting if concurred by Proponent and
FPD. In this case, the reviewing organizations should send personnel authorized
to make decisions to attend the meeting.
5.4 Distribution & Storage of Approved Project Proposals
Following the approval of the Project Proposal, a final approved copy shall be
distributed as follows:
5.4.1 ASC
An electronic copy of every Project Proposal shall be sent to Corporate

Information Center (CIC), Houston.
5.4.2 Saudi Aramco
SAPMT shall send copies of the approved Project Proposal to:

- Facilities Planning Department (FPD) - one hard copy, to be used as
a "working" document for five years or for the duration of the
project, whichever is longer.
- Technical Information Center (TIC), Room E-3100, EOB, Dhahran -
one electronic copy for archival purpose.
- Project Support & Controls Department (PS&CD) - one electronic
copy, for input in the Electronic Image Document Management
System.
The electronic file submissions shall be on CD-ROM and contain an

index at the beginning of each file medium to facilitate retrieval of stored
data. The electronic text, spreadsheet, and graphical data shall be in
Microsoft format, and drawings shall be in accordance with Saudi
Aramco standards and formats. Scanned documents shall be in Acrobat
format in accordance with the corporate standard maintained by
EK&RD/Drawing Management Unit.
Page 30 of 48
6 Approvals and Waivers
6.1 Approval Process
6.1.1 Approvals
SAPMT shall be responsible for obtaining Saudi Aramco approval for

the Project Proposal from the appropriate individuals listed. Executive
Management may delegate the approval authority to General
Management level. Obtaining these signatures constitutes full Project
Proposal approval. The recommended order for routing and approval
will be as follows, however, SAPMT may seek parallel approval from
more than one organization at the same time where appropriate.
- Manager, Facilities Planning Department
- Manager, Loss Prevention Department
- Manager, Power Distribution Department
(for all projects having power facilities of 2.4 kV and above)
- Manager, Consulting Services Department
- Manager, Environmental Protection Department
- Manager, Oil Supply Planning and Scheduling Department
(for all proposals related in any way to oil, gas, NGL and/or refined
product movement and handling)
- Manager, Process and Control System Department
(for Instrumentation & Control Systems)
- General Manager, Industrial Security
- Vice President, Petroleum Engineering and Development
(for production-related projects)
- Vice President, Engineering Services
- Vice President/Executive Director, Proponent Organization
- Vice President, Project Management
6.1.2 Unresolved Items
If unresolved items exist that would preclude obtaining approvals as

described in section 6.1.1, SAPMT shall refer any unresolved item(s)
through appropriate channels of authority until resolution is obtained.
The Project Proposal minutes shall show the estimated cost and schedule
effects of any changes from the DBSP/Project Proposal as originally
prepared.
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6.1.3 Obtaining Changes to an Approved Project Proposal
For a project with an approved Project Proposal which has not yet
received Expenditure Request (ER) approval, scope changes shall be as
follows:
 SAPMT will document and estimate all scope changes approved by
FPD and submit the revised ER estimate to PS&CD as an addendum
to the approved Project Proposal
 The proposed change in the meeting minutes or an addendum shall
include justification and the cost/schedule impact
 The required minimal approval authority for the proposed change is
Project Manager level
 SAPMT shall distribute the approved changes to PS&CD and all
those that received the original Project Proposal
6.2 Project Proposal Waiver
6.2.1 Request
For selected projects, Project Management may request to waive the

requirement for a Project Proposal / Front End Engineering Design
(FEED) and proceed directly with detailed design using preliminary
engineering funds. This request will permit SAPMT to use TC-68 funds
to carry out detailed design, perform selected project proposal
requirements and to prepare an ER quality estimate for funding approval.
Project Proposal waiver does not exempt ER Estimate and any other
Value Practices requirements.
6.2.2 Approval
The following steps are required to obtain a waiver of project proposal

and proceed with detailed design:
 SAPMT Department Manager shall prepare a formal letter requesting
to carry out detailed design during Project Proposal. The letter shall
be addressed to Vice President, Project Management and Vice
President Proponent. The letter should state the present situation,
scope of work, justification for the waiver and identify what project
proposal requirements, if any that will be performed during detailed
design, i.e., value engineering, CII concepts, etc.
 SAPMT shall obtain Vice Presidents, Project Management and
Proponent approval for this request.
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 On receiving approval, SAPMT shall prepare an Engineering Work

Order Authorization for Project Proposal Preparation (Form 6891-
ENG) to request approval of TC-68 funds to carry out detailed
engineering and contract preparation based on GI-0202.451,
(Engineering Work Order Authorization for Preliminary Engineering
Preparation).
 Approval is accomplished on obtaining the signature on Form
6891-ENG.
7 Contract Bid Package
The Contract Bid Package will be developed in close coordination with the Contracting
Department. Refer to Exhibit III, Contract Development Checklist, for key activities in
developing Contract Bid Package.
A complete Contract Bid Package shall be prepared in accordance with Contracting

Manual and typically contain the following:
 Invitation for Bid documents
 Technical Proposal documents
 Commercial Proposal documents
 As part of Commercial Proposal requirements, Bidders shall be required to submit a
Bid Quantification Summary as shown on Exhibit V for bid analysis purposes.
Copies of the final Bid Quantification Summary from the awarded Contractor will
be provided to PS&CD
 Fully developed and approved Contract documents which include Schedules A
through H, and Q
Issue for Bid package (normally prepared by Engineering Contractor) which includes,
but is not limited to, drawings, specifications, applicable reports, and other relevant
documents necessary to define the project requirements and clearly describes the
contract scope of work. SAPMT should take into consideration the current project
execution plan and responsibilities of all contractual parties when revising the Project
Proposal package to “Issue for Bid” Package.
The following Sections in the Project Proposal should be reviewed carefully to

determine if they are applicable for inclusion in the bid package. If they are to be
included, SAPMT shall modify as required to ensure that Contractor’s scope of work is
clearly defined in the “Issue for Bid” Package:
 Project Schedule
 Training requirements
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 Land Permits
 Operating Variables (as required by OSPAS)
 Strategy for projects compliance with quality requirements
 Project Risk Assessment
 Temporary construction and communications
8 Exhibits
The intent of the checklists is to facilitate the review and ensure all key requirements
are considered, but not to cover all detailed requirements as stated in this procedure.
8.1 Project Proposal Checklist
8.2 ER Estimate Package Checklist
8.3 Contract Development Checklist
8.4 Sample of Benchmarking
8.5 Bid Quantification Summary
Revision Summary
28 June 2000 Major revision.
29 January 2003 Editorial revisions.
15 August 2006 Major revision.
20 September 2006 Editorial revision to paragraph 3.7.
18 January 2009 Editorial revisions.
Page 34 of 48
EXHIBITS
TABLE OF CONTENTS
EXHIBIT I PROJECT PROPOSAL CHECKLIST
EXHIBIT II ER ESTIMATE PACKAGE CHECKLIST
EXHIBIT III CONTRACT DEVELOPMENT CHECKLIST
EXHIBIT IV BENCHMARKING DATA SHEET
EXHIBIT V BID QUANTIFICATION SUMMARY SHEET
Page 35 of 48
EXHIBIT I – PROJECT PROPOSAL CHECKLIST
Ref.
Item Section Description Included
1 3.2.2 Project Proposal documents as described in Section 3.2.2.
Obtain necessary land use permit
Obtain proponent approved permits for construction site area
Complete piping tie-in and hot tap plan
Complete electrical and control system tie-in plan
Prepare site investigation report
2 3.2.4 Temporary and Permanent Project Communication Requirements
3 3.2.5 Comply with Safety and Security Directive (SSD)
4 3.2.6 Perform of PHA or HAZOP Study
5 3.2.6 Perform of Building Risk Assessment
6 3.2.7 Perform of Environmental Impact Assessment
Apply Waivers from SA Engineering Standards and Material

7 3.2.8
System Specification
8 3.2.9 Include a list of drawings and drawings define project scope
Prepare Project Quality Plan as per GI-0400.001 including

9 3.2.10
Schedule “Q” Att. VI
Identify project major material and equipment to be reviewed by
10 3.3.1
Inspection Dept.
11 3.3.2 Develop a Material Source List of major material and equipment
12 3.3.3 Develop a Surplus Inventory and Excess material Listing
13 3.3.4 Obtain a list of approved locally manufactured products and source
Page 36 of 48
Ref.
Item Section Description Included
14 3.3.5 Develop a list of critical plant equipment spares
Identify required start-up spares with Proponent with concurrence

15 3.3.6
of MS
16 3.4.1 Prepare Level III Project Summary Schedule
Prepare ER Estimate Package ( See Exhibit II - ER Estimate

17 3.4.2
Package Checklist)
Review Project Training Impact Assessment (SAEP-140) and
18 3.7
identify required implementation
19 4.1 Perform Value Engineering Study
20 4.2.1 Provide project data for Internal Benchmarking
21 4.2.2 External Benchmarking Analysis
22 4.3 Perform Energy Optimization Study
23 4.4 Perform Value Practices
1. Constructability Study
2. Project Definition Rating Index (PDRI)
3. Lesson Learned
4. Project Execution Planning Workshop
5. Schedule Optimization
6. Planning for Startup
7. Scope Control and Change Management
Page 37 of 48
EXHIBIT II – ER ESTIMATE PACKAGE CHECKLIST
Following are minimum documents required to accompany the ER Estimate Request

to PS&CD:
Item Description Included
100% Project Proposal package ( Project Proposal must be approved prior to

1
issuance of 56D)
2 Approved technical review meeting minutes
Project Scope summary including new as well as demolition of existing

3
facilities.
4 Internal/External Benchmarking data
5 Piping and Instrument Diagrams (P&ID’s)
6 Plot plan showing major facilities/buildings
7 Proposed Piping lay-out and routing
Electrical scope with one-line diagrams, MTO quantities for Transformers,

8
Switchgear, etc,
9 Field Instrument specifications and Data Sheets
Control system (DCS) scope with I/O counts, Block Flow Diagrams and Vendor
10
Quotations
11 Communications System scope including, MTO and quotations
12 Fire Protection, Safety and Security requirements
13 Building/Equipment data sheets
14 Material specifications including Materials Diagram.
15 DC Surplus, etc,
16 Identify Start-Up and Capital Spares
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17 Catalyst, Chemicals & Licensor Fee costs.
18 HAZOP Review report if applicable.
19 Site survey and soil data report
20 List of Deviations from DBSP with cost/schedule impact
21 Copy of Approved Waivers
22 SAPMT/PMC, Insp., CMT & other related costs
23 Exploratory Trenching
24 Environmental Assessment (Contamination)
25 Approved Project Schedule
26 Approved Project Execution Plan
27 Contracting and Material Procurements Plans. Identify customs duties.
28 Detail Engineering Equivalent A size Drawings count and man hours
29 Detail Design Location – i.e., (IK or OOK)
30 Draft ER brief and BISI from FPD
31 Facility Location and Camp Requirements
32 Identify Commissioning and As-Built Requirements
33 Quality Material take-off (MTO)
34 Process Equipment list, sizes, capacities & specifications.
35 Recent (valid for 3 months) quotations for major equipment & material
Page 39 of 48
EXHIBIT III – CONTRACT DEVELOPMENT CHECKLIST
Following are the list of key activities for developing the contract package.
Contracting Strategy
Develop and Approve Contracting Strategy – Required as part of the Abbreviate

1 PEP for all projects (SAEP-12). Strategy is to be updated if there are changed
during the progress of the project.
Enter and maintain data on all contract action covered by the Contracting
2 Strategy in to the PMIS Contracting Action Development and Administration
(CADA) module.
Pro Forma Contract & Specific Instructions to Bidders (SIB)
Complete preliminary Evaluation Plan so appropriate technical and commercial

3
questions are included in the SIB.
Secure approvals for all singe source procurement and included appropriate
4
language in Schedule “H.”
Complete Schedule “Q” language in accordance with approved Quality Plan (GI
5
400.001) and review proposed language with Inspection as needed.
Include language relating to approved training requirements, if any

6
(SAEP-140).
Review any language related to contractor-supplied LAN and PC equipment

7
with the appropriated IT office(s).
8
Include requirements for bidder price breakdowns as part of the Commercial
Proposals and quantity lists as part of the Technical Proposals.
Hypothetical Quantities and Bid Conditioners
Prepare hypothetical quantities to be used to evaluate rates proposed by the

9
bidders (e.g., change order rates).
Prepare, in conjunction with other members of the Bid Review Team, data to be
10
used for allowed bid conditioner (e.g., different PMT cost for various locations).
Page 40 of 48
Review of Contract and Contract Supplement as Part of the Bid Review Team
Ensure the Contract is structured correctly for SAP SRV releases (for lump
11 sum, three items – lump sum price, change orders, and other expenditures; and
use of “VAL” with the amount in the “quantity” column).
Ensure that that AEL includes reasonable amounts for all applicable “Other
Expenditures” (e.g., incidental services, Saudi manufacturer equalization, stand-
12
by time, reimbursable start-up and commissioning assistance, variations from
target quantities, etc.).
Ensure the Contract Supplement includes an appropriate Change Order limit

13
(percent).
After award of the contract, provide copies of the bidders’ price breakdowns
14
and quantity lists to PS&CD.
Note: For a project using an LSTK contracting strategy, these actions are required during or just after the Project
Proposal period. For other strategies (e.g., GES + LSPB) some of the activities take place at later stages of
the project.
Page 41 of 48
EXHIBIT IV – BENCHMARKING DATA SHEET

for
CRUDE PRODUCTION FACILITY (GOSP)
BUDGET ITEM (BI) : ERA :

JOB ORDER (JO) : ERC :
DESCRIPTION :
UNIT
AREA NAME PARAMETER UOM QUANTITY COST COST
QUANTITY OF SCRAPER TRAPS EACH $ $

QUANTITY & SIZE (INCHES) OF TRAP A EACH
INLET FACILITY QUANTITY & SIZE (INCHES) OF TRAP B EACH
QUANTITY & SIZE (INCHES) OF TRAP C EACH
TOTAL INSTALLED COST (INLET
FACILITY) DOLLARS $ $
UNIT CAPACITY MBD $ $

NUMBER OF HIGH PRESSURE TRAPS EACH
NUMBER OF INTERMEDIATE PRESSURE
TRAPS EACH
PRODUCTION NUMBER OF LOW PRESSURE TRAPS EACH
TRAP
WATER CUT % VOL
GAS OIL RATIO
CRUDE TYPE (AL/AM/AXL/ASL) or ºAPI
TOTAL INSTALLED COST (PRODUCTION
TRAP) DOLLARS $ $
UNIT CAPACITY MMSCFD $ $

HP COMPRESSORS QUANTITY EACH
HP COMP DRIVER TYPE (MOTOR/CGT) EACH
IP COMPRESSORS QUANTITY EACH
IP COMP DRIVER TYPE (MOTOR/CGT) EACH
GAS GATHERING LP COMPRESSORS QUANTITY EACH
LP COMP DRIVER TYPE (MOTOR/CGT) EACH
HP COMPRESSORS TOTAL HP HP
IP COMPRESSORS TOTAL HP HP
LP COMPRESSORS TOTAL HP HP
TOTAL INSTALLED COST (GAS
GATHERING) DOLLARS $ $
Page 42 of 48
NUMBER DESALTING STAGES EACH

WET CRUDE
HANDLING & UNIT CAPACITY MBD $ $
WOSEP TOTAL INSTALLED COST (WET CRUDE
HANDLING & WOSEP) DOLLARS $ $
CONDENSATE UNIT CAPACITY MBD $ $

STABILIZATION TOTAL INSTALLED COST (CONDENSATE
STABILIZATION) DOLLARS $ $
CRUDE
STABILIZATION UNIT CAPACITY MBD $ $
UNIT CAPACITY MBD $ $

QUANTITY OF PUMPS EACH
WATER INJECTION
FACILITY PUMPS TOTAL HP HP
PUMP DRIVER TYPE (MOTOR/CGT) EACH
TOTAL INSTALLED COST (WATER
INJECTION FACILITY) DOLLARS $ $
COGENERATION
FACILITY ISO RATING MW $ $
TONNAGE STEEL (PIPERACK) TONS $ $

TONNAGE PIPE TONS $ $
WIDTH OF PIPERACK LM
LENGTH OF PIPERACK LM
PIPERACK &
PIPING HEIGHT PIPERACK LM
LEVELS OF PIPERACK EACH
TOTAL LENGTH OF ALL PIPES LM
TOTAL INSTALLED COST (PIPERACK) DOLLARS $ $
TOTAL INSTALLED COST (PIPING) DOLLARS $ $
SITE PREPARATION SM $ $
CONCRETE CM $ $
STRUCTURAL STEEL TONS $ $
FENCING LM $ $
SUPPORT CONTROL BUILDINGS (ALL BLDGS) SM $ $

INFRASTRUCTURE PIBS (ALL BLDGS) SM $ $
OTHER TYPES OF BUILDING SM $ $
SUBSTATION SM $ $
TOTAL INSTALLED COST (SUPPORT
BLDGS ONLY) DOLLARS $ $
TOTAL INSTALLED COST
(INFRASTRUCTURE) DOLLARS $ $
Page 43 of 48
BOILER QTY EACH $ $

BOILER CAPACITY LBS/HR
BOILER PRESSURE PSIG
COOLING TOWER CAPACITY GPM $ $
AIR COMPRESSOR QTY EACH $ $
OFFSITES &
UTILITIES AIR COMPRESSOR CAPACITY SCFM
FLARE SIZE SCFM $ $
FIREWATER SYS CAPACITY GPM $ $
NITROGEN GEN SYS CAPACITY SCFM $ $
WATER TREATMENT FACILITY GPM $ $
TOTAL INSTALLED COST (OFFSITES &
UTILITIES) DOLLARS $ $
TRANSMISSION LINE LENGTH KM $ $

TRANSMISSION LINE VOLTAGE KV
SWITCHYARD VOLTAGE KV $ $
MAIN SUBSTATION EACH $ $
MAIN SUBSTATION KVA $ $
ELECTRICAL
UNIT SUBSTATION EACH $ $
UNIT SUBSTATION KVA $ $
ELECTRICAL CABLE TRAY LM $ $
ELECTRICAL CABLE LM $ $
TOTAL INSTALLED COST (ELECTRICAL) DOLLARS $ $
DIGITAL CONTROL SYSTEM (DCS) I/O $ $

EMERGENCY SHUTDOWN SYSTEM (ESD) I/O $ $
VIBRATION MONITORING SYSTEM (VMS) I/O $ $
PROCESS WORKSTATIONS QTY EACH $ $

CONTROLS
NEW TRANSMITTERS QTY EACH $ $
INSTRUMENTATION CABLE TRAY LM $ $
INSTRUMENTATION CABLE LM $ $
TOTAL INSTALLED COST (PROCESS
CONTROLS) DOLLARS $ $
FIBER OPTIC CABLES LM $ $

COMMUNICATIONS COMMUNICATION EQUIPMENT EACH $ $
TOTAL INSTALLED COST
(COMMUNICATIONS) DOLLARS $ $
OTHERS LIST MISCELLANEOUS FACILITIES EACH $ $
Page 44 of 48
ENGINEERING (PROJECT PROPOSAL) MHRS $ $

ENGINEERING (DETAIL DESIGN) MHRS $ $
ENGINEERING
ENGINEERING (PMT SUPPORT) MHRS $ $
TOTAL COST (ENGINEERING) DOLLARS $ $
DIRECT CONSTRUCTION MHRS $ $

INDIRECT CONSTRUCTION MHRS $ $
CONSTRUCTION
CONSTRUCTION (PMT SUPPORT) MHRS $ $
TOTAL COST (CONSTRUCTION) DOLLARS $ $
CRUDE PRODUCTION FACILITY (GOSP) MBD $ $
ACTIVITY DESCRIPTION IN MONTH(S)
PROJECT PROPOSAL (PP) DURATION

PROJECT PROPOSAL (PP) TO ERA DURATION
DETAIL DESIGN DURATION
ERA-MCC DURATION
SCHEDULING
CONSTRUCTION DURATION
START-UP & COMMISSIONING DURATION
MATERIAL & EQUIPMENT WITH MORE THAN 6 MONTHS LEAD-TIME
DELIVERY
VALUE
LIST OF VALUE PRACTICES IMPLEMENTED
PRACTICES
CONTRACTING TYPE OF CONTRACT TO BE EXECUTED (LSTK, OPENBOOK, LSPB,

STRATEGY LSCR, etc.)
Page 45 of 48
EXHIBIT V – BID QUANTIFICATION SUMMARY SHEET
PROJECT TITLE : BI :
CONTRACT
NUMBER : JO :
CONRTACT TYPE :
:
SUMMARY OF COST
BY WORK BREAKDOWN STRUCTURE (WBS)
BULK
AREA OF WORK ENGINEERING CONSTRUCTION TOTALS
MATERIALS
AREA OF WORK 1 $ $ $ $
TOTAL PROJECT COST $ $ $ $
SUMMARY OF QUANTITY AND COST

BY DISCIPLINE
DISCIPLINE DESCRIPTION UNIT QUANTITY COST UNIT COST
DEMOLITION
(SCA 007)
TOTAL DEMOLITION WORK COST LUMPSUM $ $
SITE PREPARATION /
DEVELOPMENT
(PLOT SIZE) SM $ $
CONCRETE CM $ $
CIVIL / STRUCTURE FENCE LM $ $

(SCA 200 & 400)
LANDSCAPING & IRRIGATION SM $ $
STRUCTURAL STEEL TONS $ $
BUILDINGS (TYPE OF BLDGS) SM $ $
TOTAL CIVIL/STRUCTURE
MANHOURS & COST MHRS $ $
Page 46 of 48
STATIC EQUIPMENT EACH $ $

HEAT EXCHANGERS EACH $ $
MECHANICAL/ AIR COOLERS EACH $ $

PROCESS PUMPS EACH $ $
EQUIPMENT
(SCA 500) COMPRESSORS EACH $ $
OTHER PACKAGE EQUIPMENT EACH $ $
TOTAL MECHANICAL/PROCESS
EQUIPMENT MANHOURS & COST MHRS $ $
LENGTH OF PIPERACK LM $ $
TONNAGE CARBON STEEL
(PIPERACK) TONS $ $
UNDERGROUND CARBON STEEL
PIPING PIPING LM $ $
(SCA 600) ABOVEGROUND CARBON STEEL
PIPING LM $ $
TONNAGE CARBON STEEL PIPES TONS $ $
TOTAL PIPING MANHOURS &
COST MHRS $ $
TRANSMISSION LINE LENGTH KM $ $

MAIN SUBSTATION MW $ $
UNIT SUBSTATION MW $ $
ELECTRICAL ELECTRICAL CABLE TRAY LM $ $
(SCA 700) UNDERGROUND ELECTRICAL
CABLE LM $ $
ABOVEGROUND ELECTRICAL
CABLE LM $ $
TOTAL ELECTRICAL MANHOURS &
COST MHRS $ $
PROCESS CONTROL SYSTEM

(DCS/ESD/VMS) I/O $ $
CONTROL VALVE COUNT
(MOV/GOV/MANUAL) EACH $ $
FIELD INTRUMENTS
(TRANSMITTERS/TGS) EACH $ $
INSTRUMENTATION
(SCA 800) INSTRUMENTATION CABLE TRAY LM $ $
UNDERGROUND
ABOVEGROUND
TOTAL INSTRUMENTATION
FIBER OPTIC CABLES LM $ $

COMMUNICATIONS
(SCA 780) COMMUNICATION EQUIPMENT EACH $ $
TOTAL COMMUNICATIONS
Page 47 of 48
INSULATION AND FIREPROOFING

INSULATION & (EQUIPMENT, STRUCTURES,
COATINGS BUILDINGS, etc.) $ $
(SCA 900) TOTAL INSULATION & COATINGS
MHRS & COST MHRS $ $
TOTAL DIRECT CONST

TOTAL INDIRECT CONST
CONSTRUCTION
TOTAL CONSTRUCTION
TOTAL ENGINEERING MANHOURS

ENGINEERING
& COST MHRS $ $
TOTAL PROJECT COST DOLLARS $ $
ACTIVITY IN MONTH(S)
DETAIL DESIGN DURATION
SCHEDULING
CONSTRUCTION DURATION
EQUIPMENT WITH MORE THAN 6 MONTHS LEAD-TIME
DELIVERY
Page 48 of 48

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Engineering Procedure

SAEP-14 18 January 2009

Saudi Aramco DeskTop Standards

Exhibit I – Project Proposal Checklist………….. 36

Previous Issue: 20 September 2006 Next Planned Update: 15 August 2011

Copyright©Saudi Aramco 2009. All rights reserved.

The Project Proposal is a document, which establishes the preliminary (front

1.3 Preparation Timing

Project Proposals must be completed and approved in time to support the

A complete ER Estimate Package must be submitted to Project Support &

With the exception of Master Appropriation projects, Saudi Aramco requires a

2 Applicable Reference Documents

The latest edition of the applicable reference documents shall be applied:

Saudi Aramco Engineering Procedures

Saudi Aramco Engineering Report

Saudi Aramco Engineering Standards (SAESs)

Saudi Aramco Materials System Specifications (SAMSSs)

Saudi Aramco Cost & Scheduling Manual

Saudi Aramco Construction Safety Manual

Saudi Aramco Safety Management System

Saudi Aramco Form and Data Sheet

Design Basis Scoping Paper (DBSP) and applicable Study Documents

Corporate Loss Prevention Manual

Project Management Loss Prevention Program

Supply Chain Management Manual

DC Surplus Materials - Plant M011 of SAP system

MVG076-01, “DC Surplus Deferred Materials System”

Unrestricted Use Materials of SAP system (for SAMS Excess Materials)

Saudi Arabian Manufactured Materials Listing from SAP

Saudi Arabian Government Safety and Security Directives (SSDs)

Construction Industry Institute (CII) Publications

3 Proposal Contents and ER Estimate

3.1 Table of Contents

3.2 Technical Requirements

3.2.1 Project Summary

This section provides a history of the existing conditions, a brief

3.2.2 Project Description

2) Facility/process description, design basis and performance

9) Demolition and modifications to existing facilities/plants

3.2.3 Scope Change from DBSP

A scope change is defined as any deviation from the Approved

2. Addition or deletion of equipment from the original list

SAPMT shall promptly notify FPD, in writing, of any scope

If accepted for implementation, FPD shall issue a formal letter or

D) Recording of Scope Change

All scope changes shall be recorded in a special section in the

impact, schedule impact, initiator organization, date

SAPMT shall maintain the list of the scope changes and

3.2.4 Communication Requirements

Saudi Aramco construction projects normally require both temporary

3.2.5 Safety and Security Directive (SSD)

The SSD (reference SAES-O series) shall be adhered to by all projects,

3.2.6 Preliminary Hazard Analysis (PHA)

The objective in performing PHA studies is to improve process safety

and/or minimize operability problems. The SAPMT in conjunction with

The PHA studies shall normally be conducted during the Project

For buildings, a building risk assessment shall be performed when

Any cost impact as a result of the PHA studies or building risk