Refinery Project Work Split: Engineers & EPC Contractors

This guide explains how engineers and EPC (Engineering, Procurement, and Construction) contractors typically divide work on a refinery project. You’ll learn the standard phases, where responsibilities overlap, and how to manage the handoffs to avoid delays and cost overruns. Before starting, ensure you have a clear project scope, a basic organization chart, and a contract type (lump-sum, cost-plus, or reimbursable) in mind, as these heavily influence the split.

What You’ll Need

• Project scope and basis of design documents
• Contract type and commercial model (lump-sum, reimbursable, etc.)
• Organizational chart for both owner’s engineering team and EPC contractor
• Project schedule and milestone list
• Communication and document management procedures

Step-by-Step

1. Define the project phases and deliverables. Break the project into phases: conceptual design, FEED (Front-End Engineering Design), detailed engineering, procurement, construction, and commissioning. For each phase, list the key deliverables (e.g., P&IDs, equipment datasheets, 3D models, isometrics). This becomes the basis for assigning responsibilities.
2. Clarify the owner engineer’s role. Typically, the owner’s engineering team (or a hired owner’s engineer) is responsible for the conceptual design and FEED. They define the process scheme, major equipment list, and project specifications. They also manage the overall project definition, permits, and stakeholder requirements. In many cases, the owner’s engineer also reviews and approves the EPC contractor’s work.
3. Assign the EPC contractor’s scope. The EPC contractor usually takes over after FEED is complete. Their scope includes detailed engineering (producing all drawings and specs for construction), procurement (sourcing and buying equipment and materials), and construction (building the refinery). They also handle construction management, quality control, and often commissioning support.
4. Define the interface points. Identify where the two teams interact. Common interfaces: transfer of FEED documents to the EPC contractor, review of EPC’s detailed engineering against FEED, approval of vendor lists and purchase orders, and inspection of construction work. Establish formal transmittal and review procedures for each interface.
5. Allocate procurement responsibilities. Decide who buys what. Often the EPC contractor procures all equipment and materials, but the owner’s engineer may specify critical long-lead items (e.g., reactors, compressors) and may have approval rights on vendor selection. For lump-sum contracts, the EPC contractor carries the cost risk; for reimbursable, the owner does, so the split must align with risk allocation.
6. Set up a document control system. Both teams need a shared platform for drawings, specifications, and correspondence. Define naming conventions, revision control, and approval workflows. This prevents confusion about which document is current.
7. Establish a change management process. Refinery projects always have changes. Define how changes are requested, reviewed, and approved. The owner’s engineer typically approves technical changes, while the EPC contractor manages the impact on cost and schedule. A joint change board works well.
8. Define construction supervision roles. The EPC contractor manages the construction site, but the owner’s engineer usually has a site team to monitor progress and quality. Clarify who has authority to stop work, approve inspections, and sign off on completed systems.
9. Plan for commissioning and startup. The EPC contractor often completes mechanical completion and pre-commissioning, but the owner’s operations team takes over for commissioning and startup. The owner’s engineer may act as a technical advisor during this phase. Define the handover criteria (e.g., punch list completion, systems ready) and who signs off.
10. Document the split in a responsibility matrix. Create a RACI (Responsible, Accountable, Consulted, Informed) chart for all major tasks. This makes the split explicit and reduces disputes. Review it with both teams at the start and update it as the project evolves.

Common Mistakes

• Vague scope boundaries. Not defining exactly where FEED ends and detailed engineering begins leads to rework and disputes.
• Owner’s engineer overstepping. Trying to control detailed design decisions that are the EPC contractor’s responsibility can slow progress and create conflict.
• EPC contractor assuming too much. The EPC contractor may make design changes that violate the owner’s specifications or permits, causing compliance issues.
• Poor communication on vendor documents. If the owner’s engineer doesn’t review vendor drawings in a timely manner, the EPC contractor’s schedule slips.
• Ignoring constructability reviews. The owner’s engineer may produce a design that is difficult to build; the EPC contractor should have a formal review process early.

Tips

• Hold a kickoff meeting where both teams review the responsibility matrix and sign off on it.
• Use a shared project management system to track deliverables and approvals.
• Schedule regular interface meetings (weekly or biweekly) to discuss open items.
• Agree on a dispute resolution mechanism upfront, such as escalation to a joint steering committee.
• Allow the EPC contractor to bring constructability feedback into the FEED phase to avoid costly changes later.
• Ensure the owner’s engineer has enough resources to review EPC deliverables quickly; delays in approval are a common bottleneck.

Troubleshooting

When a task falls through the cracks: First, check the responsibility matrix. If it’s not clear, convene a meeting between the two project managers to assign ownership. Update the matrix immediately to prevent recurrence.

When the EPC contractor makes a design change that affects the owner’s permit: The owner’s engineer must review and approve any change that impacts regulatory compliance. If this happens, document the change, assess the impact, and inform the permitting authority if required.

When the owner’s engineer is too slow in reviewing EPC documents: Set a maximum review turnaround time (e.g., 10 working days) and stick to it. If delays persist, escalate to senior management and consider adding resources to the review team.

When the EPC contractor claims the FEED is incomplete: The owner’s engineer should have a formal FEED completion checklist. If items are missing, work together to close them out, but be aware that extra work may lead to change orders if the contract is lump-sum.

When there is a conflict over procurement decisions: Refer to the contract’s procurement approval matrix. If the contract is silent, the EPC contractor generally has the right to procure, but the owner’s engineer should have the right to reject non-compliant equipment.

Frequently Asked Questions

Q: Who is responsible for the process design?
A: The owner’s engineer typically leads process design during FEED, but the EPC contractor’s process engineers may refine it during detailed engineering. The responsibility should be defined in the contract scope.

Q: Can the EPC contractor do the FEED?
A: Yes, but it’s less common. If the EPC contractor does FEED, they have an advantage in the detailed design, but the owner’s engineer should still review the FEED to ensure it meets the project requirements.

Q: Who manages the project schedule?
A: The EPC contractor usually owns the detailed schedule for engineering, procurement, and construction, but the owner’s engineer may maintain an overall project schedule that includes permitting and commissioning.

Q: Who is responsible for cost estimation?
A: The owner’s engineer prepares the budget estimate for the FEED, and the EPC contractor provides the definitive estimate for the construction phase. In lump-sum contracts, the EPC contractor’s bid becomes the budget.

Q: Who handles permits?
A: The owner’s engineer typically leads the permitting process, but the EPC contractor may provide technical data needed for permit applications. The owner retains legal responsibility for permits.

Q: What happens if the EPC contractor finds a design error in the FEED?
A: If it’s a genuine error, the EPC contractor should notify the owner’s engineer. The cost to fix it may be a change order if the error wasn’t reasonably discoverable during bidding. This is why a thorough FEED review is crucial.

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