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Performance-based decisions shaping petrochemicals projects

LIFE-CYCLE COSTING
Project evaluation has shifted from a capital expenditure-driven approach towards a total cost of ownership model that considers long-term operational performance alongside construction costs

LIFE-CYCLE COSTING Project evaluation has shifted from a capital expenditure-driven approach towards a total cost of ownership model that considers long-term operational performance alongside construction costs

13th March 2026

By: Devina Haripersad

Creamer Media Features Reporter

     

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Engineering design choices, brownfield upgrades and changing regulatory requirements are reshaping the way in which petrochemical and storage infrastructure projects are being executed, says engineering, procurement and construction management (EPCM) project delivery alliance KGA EPC Projects.

The company’s work is increasingly starting to focus on integrating engineering design with long-term operational performance.

The engineering phase is critical to determining project outcomes, with the company developing designs based on simplifying processes and the selection of suitable materials and equipment, notes KGA EPC Projects MD Carl Pretorius.

“Clients are focused on reducing unnecessary expenditure and waste, which encourages solutions aligned with project requirements rather than overly complex technical approaches. So, the life-cycle cost analysis is applied to assess long-term value, while engineering and project management teams follow value improvement practices throughout execution.”

The company’s project activity has been more concentrated in brownfield and retrofit environments of late, and Pretorius confirms that many projects involve upgrading ageing infrastructure, including obsolete pipelines and existing operating facilities.

“Improvements have included introducing alternative cooling sources and upgrading systems such as programmable logic controllers and motor control centres.”

He adds that collaboration with clients throughout the project phases is essential when balancing capital expenditure with long-term operating considerations.

“Integrated design development and equipment procurement decisions help reduce total cost of ownership over the life of an asset . . . our project teams will then draw on [their] experiences  [to evaluate] technology and execution strategies.”

However, working within existing facilities presents technical constraints that differ from greenfield developments. “Many of these plants were designed decades ago, without the modern specifications or regulations in mind, making integration a significant challenge.”

Some operational teams may also prefer maintaining uniform technologies across their facilities, which can slow changes in specific areas requiring improvement, while limited or inaccurate operational data further complicates upgrades, often extending startup periods owing to redesigns during commissioning, he explains.

Meanwhile, Pretorius asserts that regulatory pressures and sustainability targets are influencing project scope and engineering specifications must be updated to allow for such.

“Project evaluation has shifted from a capital expenditure-driven approach towards a total cost of ownership model. Environmental requirements are, therefore, addressed from early project stages all the way up to asset or facility disposal, which then influences the material and equipment selection decisions.”

Pretorius identifies that there are numerous retrofit opportunities for EPCM contractors across Africa, as operators tend to opt to modernise existing infrastructure when expanding their downstream production facilities. 

EPCM contractors must align engineering execution with evolving operational, regulatory and sustainability expectations, as project delivery moves beyond construction towards supporting sustainable performance.



Edited by Nadine James
Features Deputy Editor

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