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    Processing Plants & Process Engineering

    From risk analysis, allocation and management through to performance functionality and operation, we assist with all issues involved in engineering projects – whether energy, oil and gas, civil, mechanical, electrical or process plant, for example, chemical and pharmaceutical – as well as in drafting specialist agreements and negotiating contract terms. Our partners have been involved in projects inside and outside their own jurisdictions and have experience in the UK, US and Latin America, Central and Eastern Europe, the Middle East, Africa, the Caribbean, Australia and Asia Pacific.

    A robust plan for the construction of industrial facilities demands that processing facilities must be constructed to perform to a guaranteed level. A unique and highly technical solution – often previously untried – will be required from specialist manufacturers, contractors and suppliers. Integrating these approaches in contractual arrangements is key to keeping the focus on achieving output performance.

    We are familiar with the large number of contractual approaches that can be taken to construct a process plant facility. EPC contracting is one approach and other options include having a supply contract, design agreement, project management agreement and construction contract.

    We understand the need for absolute performance and the interface between cost, risk and delivery regardless of the means of procurement or the contracts that are used to construct the facility.

    We have expertise in dealing with the range of contracts that can form the basis of the transaction including:

    • Joint venture agreements between sponsors, contractors and equity provider 
    • Construction contractors 
    • Finance agreements, including project financing 
    • Operation and maintenance agreements 
    • Supply agreements for the feedstock to the process plant 
    • Off-take agreements governing the sale of the product of the project
    • Risk Management and EPC contracts
    Risk Management and EPC Contracts

    Engineering, procurement and construction (EPC) contracts are the most common form of contract used to undertake construction works by the private sector on large scale and complex process plant projects. The major advantage is single point responsibility.

    Under an EPC contract, a contractor is obliged to deliver a complete facility to a developer who needs only “turn a key” to start operating the facility, hence EPC contracts are sometimes called “turnkey construction contracts.” In addition to delivering a complete facility, the contractor must deliver that facility for a guaranteed price by a guaranteed date and it must perform to the specified level. Failure to comply with any requirements will usually result in the contractor incurring monetary liabilities.

    We understand the necessity of EPC contracts for an owner, operator or joint venture partner in their creation of a complex processing facility. At the same time, we recognize and fully appreciate the perceived risks from a contractor’s perspective. We have also worked with a range of funders and have an unparalleled insight into the intricacies from the perspective of the funder. We understand that any approval of the provision of project financing either from a lender, equity provider or the sponsor’s boardroom, depends on factors including having a fixed completion date, a fixed price, limited technology risk, guaranteed output, damages for delay and a number of forms of security from the contractor and its parent, all of which depend on the robustness of the terms of the contract.

    Our experience includes advising on UK and international projects for process plant involving power stations, oil refineries, pipelines, networks and supply agreements. The size and international scope of our practice coupled with our industry knowledge puts us at the forefront of legal advisers in the sector and our approach gives our clients access to teams of lawyers who combine market knowledge with an international perspective.

    • Energy from waste contractor – Advising in relation to downstream contracts on merchant plant facilities and PPP-based contracts based on MF/1 and IChemE standard forms. 
    • EPC contractor – Advising on an EPC contract for the construction of a US$6 billion pearl gas to liquid plant in Ras Lafan, Qatar. 
    • One of the largest food process plant owners in Europe – Advising on its NEC form of contract. 
    • EPC contractor – Advising on an EPC contract for the construction of a US$500 million power and process plant in India. 
    • Large chemicals manufacturer – Advising on the design and construction and engineering, procurement and construction management of a paint manufacturing facility. 
    • Veolia Water Solutions – Advising the client, under an NEC option C, target cost contract, on a contract for the construction of a waste treatment facility. Claims in relation to defective design and/or workmanship. 
    • Major contractor – Advising on its contract under PPC2000 for the construction of a major drug manufacturing facility in the north of England for a hospital trust. 
    • Major pharmaceutical company employer – Advising on a turnkey contract for the production of a pharmaceutical plant using an amended IChemE form of contract. 
    • Saudi Arabia-based company – Advising on the construction of a waste treatment facility to be constructed in Qatar – bespoke form of contract.