Project Management of the Trans-Saharan Gas Pipeline

School of Engineering
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MATRIC No
0703621
SURNAME
McAndrew
FIRST NAME(S)
Greig
COURSE TITLE
MSc Oil & Gas Engineering
MODULE NUMBER &

TITLE
ENM230 Engineering Project Management
ASSIGNMENT TITLE
The Trans-Saharan Gas Pipeline
LECTURER ISSUING
COURSEWORK
Mohammed Kishk
I confirm: (a) the inclusion of my signature below (electronic or otherwise) certifies that the work
undertaken for this assignment is entirely my own and that I have not made use of
any unauthorised assistance.*
(b) that the sources of all reference material have been properly acknowledged.*
(c) that I accept that the School will dispose of uncollected coursework at the end of term
via the paper recycling service.
(d) that I will retain a copy of all coursework until the end of my studies.
* For
information
on
Academic
Misconduct,
refer
http://www.rgu.ac.uk/about/academic-affairs/quality-assurance-andregulations/academic-regulations-student-forms]
Signed
Greig McAndrew
Date
Word Count: 2,738

Markers Comments
Marker
Grade
to
ENM230 Project Management

For the Degree of
Msc Oil & Gas Engineering
Project Management
Trans-Saharan Gas Pipeline
GREIG MCANDREW (0703621)
Mohammed Kishk
School of Engineering and Physical Sciences
The Trans-Saharan Gas Pipeline

Greig McAndrew
MSc Oil and Gas Engineering
School of Engineering
RGU University
Garthdee House
Aberdeen
AB10 7QB
Abstract
This report discusses the project management aspect for the construction of the
Trans-Saharan Gas Pipeline. Included are detailed lists of project objectives, along
with a project scope and project deliverables. Multiple situations have been
considered with a final solution to complete the project outlined including risk
assessments and which risk management scheme has been used to mitigate these
problems.
II
Declaration
I hereby declare that the project work entitled Trans-Saharan Gas Pipeline, is a
record of an original work piece done by myself, Greig McAndrew, for Mr
Mohammed Kishk and that this project work is submitted in the partial fulfilment of
the requirement for the award in the degree of MSc Oil and Gas Engineering. The
discussions in this report have not been submitted to any other University or Institute
for the award of any degree or diploma.
Signed: Greig McAndrew

Print: Greig McAndrew
Date: 12/03/2016
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Contents
I
Abstract......................................................................................i
II
Declaration..................................................................................i
Table of Figures..............................................................................iv
Figures.......................................................................................iv
Tables........................................................................................iv
1.
Executive Summary.................................................................1
2.
Introduction...........................................................................2
2.1.
Background......................................................................2
2.2.
Project Rationale...............................................................2
3.
Project Definition....................................................................4
3.1.
Purpose............................................................................4
3.2.
Project Scope....................................................................4
3.3.
Objectives........................................................................4
3.4.
Project Deliverables...........................................................5
3.5.
Key Performance Indicators (KPI)........................................5
3.6.
Considerations..................................................................6
3.7.
Constraints.......................................................................6
3.8.
Assumptions.....................................................................6
4.
Project Development Plan.........................................................8

4.1.
Work Breakdown Structure (WBS).......................................8
4.2.
Project Schedule................................................................8
4.3.
Stakeholders.....................................................................8
4.4.
Cost Analysis...................................................................10
4.5.
Strengths, Weaknesses, Opportunities and Threats (SWOT)
Analysis.....................................................................................12
4.6.
4.6.1.
Implementation............................................................12
4.6.2.
Critical Path Analysis (CPA)............................................13
4.6.3.
Gantt Chart..................................................................14
5.
6.
Programme Evaluation and Report Technique (PERT)............12
Project Management and Organisation.....................................16

5.1.
Project Organizational Structure.........................................16
5.2.
Roles and Responsibilities.................................................17
5.3.
Responsibility Matrix........................................................18
5.4.
Controls.........................................................................19
5.5.
Communication...............................................................19
Potential Risks and Management.............................................20
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6.1.
Risk Analysis...................................................................20
6.2.
Risk Management............................................................22
7.
Conclusion............................................................................24
7.1.
Recommendations...........................................................24
8.
References...........................................................................25
9.
Appendices...........................................................................26
9.1.
Appendix 1 Gantt Chart..................................................26
9.2.
Appendix 2 Work Breakdown Outline...............................29
9.3.
Appendix 3 Responsibility Matrix.....................................30
9.4.
Risk Management - Monti Carlo Simulation..........................34
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Table of Figures
Figures
Figure
Figure
Figure
Figure
Figure
Figure
Figure
Figure
1
2
3
4
5
6
7
8
Work Breakdown Structure.................................................8

Key Stakeholders..............................................................9
Cumulative Real Cash Flow...............................................11
SWOT Analysis................................................................12
Critical Path Analysis.......................................................14
Gantt Chart....................................................................15
Organizational Breakdown Structure..................................16
Monti Carlo Simulation [6].................................................22
Tables
Table
Table
Table
Table
Table
Table
Table
Table
1
2
3
4
5
6
7
8
Sontrachs Objectives..........................................................4
Key Project Deliverables......................................................5
Key Performance Indicators.................................................6
Yearly Expenditure............................................................10
Time Estimations..............................................................13
Roles and Responsibilities..................................................17
Responsibility Matrix.........................................................18
Main Risk Considerations...................................................21
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1. Executive Summary
This report shows Sontrachs evaluation and analysis for the Algerian
section of the Trans-Saharan Gas Pipeline (TSGP) project. The project has
been halted recently due to issues with Nigerian militant opposition
groups and financing difficulties.
Information presented revalidates the importance of the TSGP and proves
its capability to not only provide profit but to also aid areas in dire need
of development.
To show the TSGPs capability, an analysis into the overall cost has been
carried out, along with a risk analysis to show potential problems with the
current project plan. The main risks are security and financial but all of
them have been presented with mitigation options. Through the use of
the Monti Carlo Simulation and other techniques, Sontrach will be able to
produce an updated project plan, which can work around these issues
and prove the viability of the TSGP.
Results of the cost analysis showed that the end of project profit was
circa $50 billion, with a maximum exposure of $15.1 billion. The
mitigation options have reduced the impact of the risks but all of them
will still require careful monitoring.
With stakeholder management plans in place and communication
strategies implemented, following the project plan will lead to each
deliverable being carried out and a successful construction and
commissioning of the TSGP by June 2022.
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2. Introduction
2.1.
Background
In 1970, an idea was proposed to build the Trans-Saharan Gas Pipeline,

which would stretch from Warri, Nigeria to Hassi RMel in Algeria [1]. This
pipeline was to be used to transport natural gas from Nigeria to Algeria to
be sold to the EU and is expected to reach a total length of approximately
4,128km.
Sontrach are the national oil and gas Company representing Algeria and
are responsible for the construction and installation for the Algerian
section of the TSGP. This section spans roughly 2310km and begins at In
Guezzam at the Niger-Algeria border (in the Touareg region), terminating
at the pipeline hub Hassi RMel in Algeria.
In 2005, Penspen Limited was brought in to complete a feasibility study
for the project. One year later this was finalised and it was noted that the
TSGP was both technically and economically feasible [2].
Once the project was shown to be viable, the energy ministers of the
three countries signed an Intergovernmental Agreement (IGA) in 2009 [3]
and the project was approved for construction, with commissioning
estimated in 2015.
Since this date, the project has been halted due to a Nigerian militant
opposition group known as the Movement for the Emancipation of the
Niger Delta (MEND). This is one of the largest militant opposition groups
within the Niger Delta region [4] and an agreement will need to be reached
with them to avoid further delays and future damage to the pipeline.
2.2.
Project Rationale
The reasons for the project to continue have been listed below:
-
Nigeria has so much gas reserves (approximately 5 trillion cubic

metres) that flaring is constantly ongoing to deal with the amount
they are producing. Eliminating this by transporting the gas to
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Algeria and then distributing it into the EU would not only produce
more revenue for the three countries but also help in the fight
-
against global warming.

5 trillion cubic metres equates to ~10 years of consumption for the
EU.
European gas fields are depleting. It is projected that by 2025,
80% of gas consumed by the EU is to be imported [2]. To fulfil the
yearly gas requirements, the EU must source their gas from other
countries, meaning for the foreseeable future, demand is likely to
remain high and the profitable forecast will not be put at risk.
As the TSGP runs through Nigeria, Niger and Algeria, it has the
additional advantage of supplying gas to these countries, as well as
Mali and Burkina Faso [2].
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3. Project Definition
3.1.
Purpose
The purpose of this document is to justify Sontrachs venture into the

construction of the Algerian section for the Trans-Saharan Gas Pipeline
based on the overall costs, risks and benefits.
Additionally, it is to request permission and funding to progress to the
initiation stage of the project to show a detailed allocation of resources
for the full length of the project.
3.2.
Project Scope
This report applies only to Sontrachs involvement in the project

initiation, planning, design and construction for the Algerian section of
the Trans-Saharan Gas Pipeline (In-Guezzam to Hassi RMel).
3.3.
Objectives
The following table lists the main objectives Sontrach aims to complete
across the 6 years it will be involved in the TSGP project:
Objectiv
Description
e
To deliver the construction of the Trans-Saharan Gas Pipeline for
1.
2.
3.
4.
5.
6.
7.
Algeria. This will act as a conduit for natural gas which is to be

transported from Nigeria to Hassi RMel.
To provide Algeria a 45% share in any revenue produced once the
pipeline is commissioned and the gas is sold to the EU.
To fully commission and handover the pipeline section to the
Algerian Government by the target date June 2022.
To reduce EUs gas dependency from Russia.
To improve surrounding developments such as towns by providing
tap in points where gas can be distributed if required.
To construct tie ins with existing storage facilities which will
connect with the Maghreb-Europe, Medgaz and Galsi pipelines.
To provide local opportunities for the Algerian population.
Table 1 - Sontrachs Objectives
The objectives listed above show the potential that the TSGP can bring
not only to stakeholders but to certain areas which are seriously
underdeveloped.
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3.4.
Project Deliverables
The table below shows the key deliverables for the project and links each
deliverable to its corresponding objective:
Objective
Deliverable
Deliver Algerias 2310km section of the Trans-Saharan Gas Pipeline
which is to have the following specifications:
1.
2.
3.
4.
5.
6.
7.
56 Diameter.
The ability to transport 30 billion cubic metres of natural gas
per year.
3 Metering stations, 6 compressor stations, 131 valves and
4 SCADA systems.
Produce revenue of approximately $2.38 billion per year.
Successful cooperation with Niger and Nigeria to get the pipeline
commissioned for June 2022.
Geopolitical benefits which will come from the diversification of
European gas suppliers.
Tap in points for the towns surrounding the TSGP.
Tie in with existing storage facility at Hassi RMel.
Employ roughly ~1000 members of the local population who may
be low on work due to the ongoing oil crisis.
Table 2 - Key Project Deliverables
The successful completion for the Algerian section of the TSGP by

Sontrach will come down to the team completing the project on time and
in budget. The finished product must be up to the Clients standards but
input from all stakeholders must be taken into consideration.
3.5.
Key Performance Indicators (KPI)
The quantifiable measurements which are to be agreed before

construction begins will reflect how successful Sontrachs management
will be. A table of the key KPIs can be seen below:
KPI
Description
A detailed Gantt chart listing key milestones has been designed
Schedule
(Annex 1) to ensure no section of the project overruns, putting

pressure on future deliverables.
With a CAPEX of $16.1 billion (post inflation) for the entire length
of the TSGP, the Algerian section has been calculated to require
Cost
$8.85 billion based on total length of the pipeline. Sontrach must

keep detailed lists of any expenditure to avoid exceeding this
Customer
budget.
The handover will only take place once all concerns of the
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Satisfactio
n
HSE
customer have been met. This will mostly come down to quality
of work and how Sontrach handled any problematic situations.
Safety is a major KPI. This covers all employees involved with
any area of the project but also towards stakeholders and the
environment.
Table 3 - Key Performance Indicators
3.6.
Considerations
Multiple routes were considered during the development of the project

plan before agreeing to run the pipeline from In-Guezzam to Hassi RMel.
The risks and overall costs for this route have been detailed throughout
the report.
3.7.
Constraints
Sontrach have very few constraints, but the ones that do exist could pose
a serious risk to the project:
1. Limited by budget. This constraint will not be as serious as others as a
detailed cost layout can be seen within this report.
2. Due to an unstable political situation in Algeria there are huge
constraints to security from terrorists.
3. Due to the oil crisis there has been almost no investment into the
industry.
4. There is very little infrastructure along the chosen route. New roads,
worker facilities and electrical lines will need to be constructed.
5. MEND plan to stop any production of the pipeline from happening,
stating they would thwart the project by sabotaging the construction
works [5].
3.8.
Assumptions
1. The full budget for the TSGP is estimated to be $16.1 billion CAPEX
and $3.1 billion OPEX after taking into consideration inflation over the
past 10 years.
2. 55% of the total budget, amounting to a CAPEX of $8.85 billion, is to
be allocated to Algeria based on pipe length.
3. To produce future cost estimations, a constant inflation rate is
assumed at 3.0%.
4. A constant gas price of $0.177/cubic metre.
5. Beneficial land compensation schemes exist in Algeria.
6. There will be no issues navigating around the Hoggar mountains.
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7. Six compression centres will need to be constructed within Algeria

based on length of the pipeline.
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4. Project Development Plan

4.1.
Work Breakdown Structure (WBS)
The project is broken down into sections with multiple tasks forming
under each. A full work breakdown outline (WBO) can be seen in
Appendix 2. To simplify matters, a work breakdown schedule has been
designed. This lists the five main sections of the WBO and shows some of
the key tasks required to complete each section:
Trans-Saharan
Gas Pipeline
1.
Develop
Project Charter
1.1
Plan Project
1.2
Execute
Project
1.3
Control
1.4
Close Project
1.5
Project Scope
1.1.1
Develop Work
Plan
1.2.1
Design
1.3.1
Project
Management
1.4.1
Client
Satisfaction
Review
1.5.1
Assign Roles
1.1.2
Work
Breakdown
Structure
1.2.2
Pipeline
Manufacture
1.3.2
Status Meeting
1.4.2
Handover
1.5.2
Revise and
Approve
Charter
1.1.3
Risk Analysis
1.2.3
Pipeline
Testing
1.3.3
Risk
Management
1.4.3
Post-Product
Review
1.5.3
Develop
Control Plan
1.2.4
Implement
Pipeline
1.3.4
Update Project
Plan
1.4.4
Pipeline
Construction
1.3.5
Figure 1 - Work Breakdown Structure
4.2.
Project Schedule
As shown in the Gantt chart (Appendix 1), the project is set to begin 4 th
of April 2016 with project handover finishing 24 th of June 2022 if the
construction is up to the Clients standards.
The pipeline life expectancy will range from 20 25 years assuming good
maintenance is carried out and any repairs are seen to immediately.
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4.3.
Stakeholders
With such a large project there are a number of stakeholders involved

with the TSGP, all of which must be consulted on how the project is
carried out and informed if there are any changes. A diagram showing
the major stakeholders can be seen in Figure 2.
Figure 2 - Key Stakeholders
One of the most influential stakeholders is the Algerian Government.

They hold the key to gain project financing and approve all ideas moving
forward. They must be included in regular meetings and monthly reports
should be issued by the project manager with key updates.
The Nigerian and Niger Governments must also be kept informed of all
tasks being carried out within Algeria. This will form a bond between the
countries ensuring problems are caught early and the blame game is not
considered.
Local communities have a stake in the project. Any land that the pipeline
runs through must either be purchased or an agreement with the
landowner to pass through their land signed and approved. Gaining
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community support is possible through local employment opportunities

which benefit the projects sustainability.
4.4.
Cost Analysis
The Algerian Government has a 45% stake in the TSGP project, with
Niger having 10% and Nigeria having the remaining 45%. The initial
budget in 2006 was $13.7 billion. Taking into consideration inflation a
2016 budget is estimated at $16.1 billion.
The Algerian section of the TSGP is the longest and therefore requires
55% of the total budget based on total length. Using this budget, the
financial manager must allocate which tasks require the most capital. A
summary of the forecasted cost breakdown can be seen in table 4 below,
detailing how much is spent each year:
Planning
(5%)
Manufacturin
g (70%)
Construction
(20%)
Miscellaneous
(5%)
2016
2017
2018
Year
2019
0.433
4.015
2.167
0.266
0.641
0.531
0.354
0.443
2020
2021
2022
Table 4 - Yearly Expenditure
In order to gain the financial backing from the Algerian Government, an

estimation into future income of the TSGP was created, detailing
maximum exposure, payback time and a net profit value (NPV) shown in
Figure 3.
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Figure 3 - Cumulative Real Cash Flow
A maximum exposure of $15.1 billion is a risk detailed within the risk

analysis (taking into account inflation and discount rate), especially since
payback is not until 2030. However, the numerous benefits detailed
previously give reason for the TSGP, along with the possible profit of $54
billion (before tax) by the end of the pipeline life in 2042, assuming a
constant gas price.
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4.5.
Strengths, Weaknesses, Opportunities and Threats (SWOT)

Analysis
Everything from an entire company to a single project should undergo a

SWOT analysis. Weaknesses and threats should be taken into special
consideration as they list what may cause a project to fail.
Figure 4 - SWOT Analysis
The diagram shown above lists some of the most important strengths,
weaknesses, opportunities and threats of the project. Each has one item
highlighted which are considered the most important aspects.
One area which must be monitored closely throughout the entire length
of the project is the plans EU has set, which aim to reduce emissions
30% by 2025. The estimated profit for the TSGP will drastically fall if EU
begins to purchase less gas.
4.6.
Programme Evaluation and Report Technique (PERT)
PERT is a common tool used in project management for statistical

analysis. It represents all the tasks which make up the project, especially
the time required to complete each task.
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4.6.1. Implementation
To produce an accurate Gantt chart and Critical Path Analysis, an
evaluation to calculate expected times for each task must be carried out.
The methodology to calculate these times can be seen below:
T e=
a+ 4 m+b
T e=Expected Time a=Most Optimistic Time
6
b=Most Pessimistic Time m=Most Likely Time
For each task this equation must be applied. A sample calculation for
Activity C is shown along with a table of values for the remaining tasks:
T e=
12+ ( 4 x 13 ) +18
6
T e=13.66
T e=14.0 weeks
Expected
Time Estimates
Activity
Predecessor
A
B
C
D
E
F
G
H
I
-A
A
B, C
D
D
E, F
G
H
Time
Optimisti
Likely
Pessimisti
c (a)
7
9
12
7
80
48
6
156
2
(m)
8
14
13
12
85
52
8
184
5
c (b)
15
28
18
19
145
80
13
190
7
9
16
14
12
94
56
9
180
5
Table 5 - Time Estimations
4.6.2. Critical Path Analysis (CPA)

From the time estimations, a critical path analysis can be carried out. The
CPA below shows the most important tasks from the Gantt chart. Working
with such a long project it is extremely easy to fall behind. The critical
path (in red) shows the tasks where delay will almost certainly lead to
project failure.
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Figure 5 - Critical Path Analysis
4.6.3. Gantt Chart

One of a project managers most useful tools leading to success of a
project is a detailed Gantt chart. Every task required for completion is
given a start and end date. Tasks must be completed within these dates
or the project will surely overrun. Milestones are also inserted to note the
end of a key section and the start of another. Figure 6 shows the
beginning and ending of Sontrachs schedule along with one of its most
important tasks, pipeline manufacturing.
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Figure 6 - Gantt Chart
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Each task is given a resource which lists who is responsible for the tasks
completion. A fully detailed Gantt chart for the TSGP can be seen in
Annex 1.
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5. Project Management and Organisation

5.1.
Project Organizational Structure
The Algerian Government were responsible for the hiring of Sontrach.

This puts them at the top of the organizational structure which can be
seen in Figure 1 below:
Algerian
Government
Sontrach
Managing
Director
Administratio
n
Admin office
Support
Group
Equipment
Supportive
Project
Management
Eng. Design
& Execution
Project
Sponsor
PM Office
Steering
Group
HSE
QA/QC
Inspectors
Engineering
Design
Testing &
Handover
SubContractors
Junior Design
Engineers
Project
Managers
Senior Design
Engineers
Project
Engineers
Health/Motio
n Supportive
Review Group
Testing
Engineers
Technicians
Figure 7 - Organizational Breakdown Structure
As the Algerian Government are the Client, they will have to be informed
about the structure. Clients often dont give much input into how
companies carry out their projects but any changes they require must be
taken into consideration. Some of the project requirements will need to
be sub-contracted out to other Algerian companies such as the pipe
manufacturing.
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5.2.
Roles and Responsibilities
Included in the OBS and Gantt chart is a list of people who are
responsible for different tasks during each section of the project. The
roles and responsibilities of the lead and additional team members can be
seen below:
Roles
Managing Director
Project Manager
Responsibilities
Responsible for all areas of the project. Makes sure the
correct person is hired for the correct position.
Oversees and controls the entire project from initiation
to handover. The project manager will monitor each
employees daily activities against the Gantt chart to
make sure they are not falling behind.
Tasked by the project manager to carry out set tasks by
Project Engineer
Environmental
Engineer
Operations Manager
a set date. Reports directly to the project manager if

any foreseeable problems arise.
Surveying and land acquisition are a large part of the
job. The entire Algerian section must be tested to
ensure the project is environmentally viable.
Required to monitor all personnel who are tasked
offsite. The business operations should require minimal
resources while still meeting the clients requirements.
Budgets and targets are set by the financial manager.
Financial Manager
All transactions going in and out of the company should

be monitored.
Throughout manufacturing, the testing and
Testing and
Commissioning
Engineer
commissioning engineer should be continuously testing

the manufactured product. Flaws need to be corrected
immediately to avoid future delays. Once the pipeline is
constructed, he/she is responsible for ensuring the
pipeline is signed off before handover.
Table 6 - Roles and Responsibilities
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5.3.
Responsibility Matrix
Project Team Members
WBS Element
Admin
Offices
Project Charter:
SubContractor
Review &
Testing
Plan Project:
Execute Project:
S
Control:
C, A
Project Management
Close Project:
R
S
Key: R = Responsible; S = Support Required; C = Must be Consulted;

A = Approval Required
Table 7 - Responsibility Matrix
Risk Analysis
Handover
Design
Engineers
Project Scope
Design
PM
Office
Other
Stakeholders
Sponsor Steering
Group
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N = Must Be Notified;
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The sample above details the major milestones and who is responsible.
Tasks often require additional support or approval before they can be
checked off. A full list of tasks and the team members responsible for
each can be seen in Appendix 3.
5.4.
Controls
A project manager uses a variety of controls to ensure the projects

success. These range from simple scheduling to cost and risk
management. The managing director should oversee these where
possible.
5.5.
Communication
Communication is required throughout the entire length of the project,

amongst a wide range of parties both internally and externally. All
members linked to the project are responsible for their individual tasks
but are also responsible for reporting back to their respected superior.
Internally, the communication between the team rests with the Project
Manager, who must ensure most stakeholders are kept up-to-date in
regards to each task or milestone.
Consistent information must be provided to all parties outwith the project
team. Specific external party members who must be included in this
communication are:
Stakeholders
Manufacturers
Local communities
Contractors
Ensuring both external and internal members of the project are up to

date with completed tasks or setbacks allows everyone to have input if
they feel the project is heading in the wrong direction. Corrections can
then be made if required, reducing possible delays.
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6. Potential Risks and Management

6.1.
Risk Analysis
With a project this large, a risk analysis is required. The risks mentioned
below can either cause serious damage to both the pipeline and
environment or will cause issues with the timeline, leading to delays and
inevitable project failure:
Type of Risk
Description
Mitigation
Continual risk
management and
Environmental
Damage to the environment will

lead to bad media attention
surveys completed by
the environmental
engineers team will be
carried out.
Budget plans are set at
the beginning of the
Insufficient funds due to delays

or estimation of costs
project. Additional funds

should be set aside for
any further requirements
such as
decommissioning.
A deal can be made early
Financial
on with the manufacturer

Rise in material price and
inflation may cause serious
issues with budget
to agree a fixed price

should changes be
required to the pipeline.
Inflation is taken into
account during costing.
Maximum Exposure of $15.1

billion across 6 years of
--
construction for the entire TSGP

Government
Natural
Possible delays with permits and

approvals
These tasks are to be

carried out immediately
Natural disasters could delay or
to avoid future delays.

Very difficult to mitigate.
potentially destroy the project
Trenches can be built but
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depending on the
severity of the disaster it
may be unavoidable.
Regular contact and
Loss of Partnership
updates are required,

along with the occasional
conceding to other ideas.
Regular meetings either
Organizational
Separate teams in each country
not communicating enough
in person or through
video conferencing will
keep all teams up to
date.
This is an uncertainty
Political
Possible strike action will delay

the project
and will only occur if

there are problems
within the workforce.
Safety plans are in place
to prevent accidents. A
Accidents during construction
medical team will be on

call at all times in case of
Security
an emergency.
Defence contractors will
Terrorism or war
be required to ensure the

project has its highest
chance of survival.
Quality testing is carried
out throughout the
Technological
Quality risk and rework
manufacturing process to
correct any issues before
it is too late.
Table 8 - Main Risk Considerations
To minimise the potential impacts, Sontrach must monitor each risk

continuously throughout the entire life of the project.
6.2.
Risk Management
To help manage these risks, a risk management scheme must be

implemented. The Monte Carlo Simulation is widely used in project
management and a layout can be seen below:
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Figure 8 - Monti Carlo Simulation
[6]
This simulation builds up a risk analysis through thousands of

recalculations using a probability distribution. The risk breakdown
structure (RBS) is broken down into probability and impact factors which
are then analysed.
Once the critical risks have been highlighted, a risk management strategy
is selected and then monitored. The mitigation option was used in table 7
which aids in lowering the severity of each risk.
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7. Conclusion
This report focuses on the benefits and possibilities that are created by
the construction of the Trans-Saharan Gas Pipeline, along with current
setbacks and recommendations to ensure project survivability. The main
conclusion from this report is that the increasing demand of gas required
from the EU will produce a large profit margin for the three Governments
involved with the project.
Under developed areas are also set to benefit from the installation as
tap-in points will be made available to distribute natural gas to
neighbouring towns as well as countries such as Mali and Burkina Faso.
With many employees currently out of work due to the on-going oil crisis,
this project will help provide local employment opportunities. In order to
proceed to construction, it is recommended that a representative of
Nigeria reasons with MEND in order to halt their future plans of
destroying the pipeline. It is then possible to begin construction and by
2022 have the pipeline continuously flowing 30 billion cubic metres of gas
each year for the next 20 years.
7.1.
Recommendations
1. The feasibility study concluded in 2006 that the TSGP is not only
financially beneficial but will also lead to more opportunities,
improving much of Nigeria, Niger and Algeria. This will only be the
case if the militant opposition group MEND can be brought into an
agreement not to interfere with future construction. It is
recommended that a meeting is held to discuss changes they suggest
to the project to allow construction to continue without interference.
2. Due to the EU lowering emissions 30% by 2025, there is a possibility
that once construction is complete, the estimated profit and amount of
gas being sold will be dated. It is recommended that whilst
construction is carried out, additional plans are designed to sell gas to
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more countries in case the EU continues to purchase most of its gas

from Russia.
8. References
(1) - Fabi R. Nigeria, Algeria Agree to Build Sahara Gas Link.
[Homepage on the Internet]. Reuters; 2009 [updated 2009 July
3rd; cited 2016 March 9th]. Available from:
http://uk.reuters.com/article/nigeria-algeria-pipelineidUKL345766620090703?sp=true
(2) - Nigeria - Algeria Pipeline Feasibility/Needs Assessment
(3) - Awhotu E. Nigerian, Algerian Officials Discuss Saharan Gas
Pipeline. [Homepage on the Internet]. 2009 [updated 2009
February 20th; cited 2016 March 09]. Available from:
http://downstreamtoday.com/
(X(1)S(cd4vcf55luw30xvsgcx00w45))/news/article.aspx?
a_id=15259&AspxAutoDetectCookieSupport=1
(4) - Watkins E. Nigerian Militants Threaten Proposed Trans-Sahara
Gas Line. [Homepage on the Internet]. Oil & Gas Journal; 2007
[updated 2007 July 7th; cited 2015 March 11th]. Available from:
http://www.ogj.com/articles/2009/07/nigerian-militants.html
(5) - Conan L. The Trans-Saharan Gas Pipeline: An Overview of the
Threats to its Success and the Means to Prevent its Failure. 2011;
(6) - Mubin S, Mubin G. Risk Analysis for Construction and Operation
of Gas Pipeline Projects in Pakistan. 2008
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9. Appendices
9.1.
Appendix 1 Gantt Chart
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9.2.
Appendix 2 Work Breakdown Outline
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9.3.
Appendix 3 Responsibility Matrix

Project Team Members
WBS Element
Other
Stakeholders
Sponsor Steering
Group
Admin
Offices
PM
Office
Design
Engineers
SubContractor
Review &
Testing
1. Initiation
1.1.
Project Charter:
1.1.1. Project Scope

1.1.1.1.
1.1.1.2.
Identify
Objectives
Identify
Deliverables
1.1.1.3.
WBS
1.1.1.4.
Feasibility
Study
1.1.1.5.
Assign Roles
2.1.1. Revise WBS
2.1.2. Develop Gantt

Chart
2.1.3. Develop Budget
2.
Plan Project:
2.1.
Develop Work
Plan
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2.1.4. Risk Analysis
2.1.5. Detail Route
Design
C, A
3.1.1. Define Stages
2.1.6. Geotechnical
Survey
2.1.7. Environmental
Survey
2.1.8. Permits
Acquisition
2.1.9. Land
Acquisition
2.1.10.
Infrastru
cture Setup
2.1.11.
Identify
Manpower
Deployment
2.2.
Control Plan
2.2.1. Develop Quality

Control Plan
2.2.2. Develop
Communication
Plan
2.2.3. Finalise Project
Plan
3.
Execute Project:
3.1.
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3.1.2. Design Pipeline
3.1.3. Develop
Prototype
3.2.
3.2.1. Confirm Spec.
3.2.2. Schedule
3.2.3. Tendering
3.2.4. Ordering
3.2.5. Sub Orders
3.2.6. Manufacturing
3.2.7. Inspection
3.2.8. Review Quality
3.3.
Testing
3.4.
Implementatio
n
3.4.1. Transport
3.5.
Manufacturing
Construction
3.5.1. Monitor
Equipment
3.5.2. Assign
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Manpower
3.5.3. Construction
3.5.4. Testing
3.5.5. Commissioning
4.
Control:
4.1.
4.2.
4.3.
5.
Project
Management
Risk
Management
Update Project
Plan
Close Project:
5.1.
Satisfaction
Review
5.2.
Handover
Key: R = Responsible; S = Support Required; C = Must be Consulted;

A = Approval Required
9.4.
Risk Management - Monti Carlo Simulation
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N = Must Be Notified;
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Type of Risk
Probability
Impact
Rating
Description
Damage to the environment

Environmental
35
will lead to bad media

attention
Mitigation
Continual risk
New Rating
management and
surveys completed by
the environmental
18
engineers team will be

carried out.
Budget plans are set at
Financial
the beginning of the

4
28
Insufficient funds due to

delays or estimation of costs
project. Additional
funds should be set
14
aside for any further

requirements such as
decommissioning.
A deal can be made
early on with the
Rise in material price and

6
48
inflation may cause serious

issues with budget
manufacturer to agree
a fixed price should
changes be required to
18
the pipeline. Inflation is

taken into account
--
--
--
Maximum Exposure of $15.1

billion across 6 years of
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during costing.
--
--
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construction for the entire

TSGP
These tasks are to be
Government
21
Possible delays with permits

and approvals
carried out
immediately to avoid
future delays.
Very difficult to
Natural disasters could delay
Natural
8-10
8-10
mitigate. Depending on
or potentially destroy the
the severity of the
project
disaster it may be
--
unavoidable.
Regular contact and
updates are required
2
16
Loss of Partnership
along with the
occasional conceding to
other ideas.
Regular meetings
Organizational
Separate teams in each
6
Political
24
21
country not communicating
either in person or
through video
enough
conferencing will keep
Possible strike action will
all teams up to date.

This is an uncertainty
delay the project
and will only occur if

there are problems
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12
--
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within the workforce.

Safety plans are in
place to prevent
5
25
Accidents during
construction
accidents. A medical
team will be on call at l
10
times in case of an
Security
emergency.
Defence contractors
will be required to
6
36
Terrorism or war
ensure the project has
20
its highest chance of

survival.
Quality testing is
carried out during the
Technological
18
Quality risk and rework
manufacturing process
to correct any issues
before it is too late.
36 | P a g e

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School of Engineering

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MSc Oil & Gas Engineering

MODULE NUMBER &

ENM230 Engineering Project Management

The Trans-Saharan Gas Pipeline

Word Count: 2,738

ENM230 Project Management

GREIG MCANDREW (0703621)

School of Engineering and Physical Sciences

The Trans-Saharan Gas Pipeline

Signed: Greig McAndrew

Trans-Saharan Gas Pipeline

Key Performance Indicators (KPI)........................................5

Project Development Plan.........................................................8

Work Breakdown Structure (WBS).......................................8

Critical Path Analysis (CPA)............................................13

Programme Evaluation and Report Technique (PERT)............12

Project Management and Organisation.....................................16

Project Organizational Structure.........................................16

Roles and Responsibilities.................................................17

Trans-Saharan Gas Pipeline

Appendix 1 Gantt Chart..................................................26

Appendix 2 Work Breakdown Outline...............................29

Appendix 3 Responsibility Matrix.....................................30

Risk Management - Monti Carlo Simulation..........................34

Trans-Saharan Gas Pipeline

Work Breakdown Structure.................................................8

Trans-Saharan Gas Pipeline

Trans-Saharan Gas Pipeline

In 1970, an idea was proposed to build the Trans-Saharan Gas Pipeline,

Nigeria has so much gas reserves (approximately 5 trillion cubic

Trans-Saharan Gas Pipeline

against global warming.

Trans-Saharan Gas Pipeline

The purpose of this document is to justify Sontrachs venture into the

This report applies only to Sontrachs involvement in the project

Algeria. This will act as a conduit for natural gas which is to be

The successful completion for the Algerian section of the TSGP by

Key Performance Indicators (KPI)

The quantifiable measurements which are to be agreed before

(Annex 1) to ensure no section of the project overruns, putting

$8.85 billion based on total length of the pipeline. Sontrach must

Trans-Saharan Gas Pipeline

Multiple routes were considered during the development of the project

Trans-Saharan Gas Pipeline

7. Six compression centres will need to be constructed within Algeria

Trans-Saharan Gas Pipeline

4. Project Development Plan

Work Breakdown Structure (WBS)

Figure 1 - Work Breakdown Structure

Trans-Saharan Gas Pipeline

With such a large project there are a number of stakeholders involved

Figure 2 - Key Stakeholders

One of the most influential stakeholders is the Algerian Government.

Trans-Saharan Gas Pipeline

community support is possible through local employment opportunities

Table 4 - Yearly Expenditure

In order to gain the financial backing from the Algerian Government, an

Trans-Saharan Gas Pipeline

Figure 3 - Cumulative Real Cash Flow

A maximum exposure of $15.1 billion is a risk detailed within the risk