Note: This article is intended to provide a general overview of the project development process for individuals seeking to understand the structured approach used in industrial projects. While some details may vary depending on the industry or organization, the fundamental principles outlined here apply broadly to ensure cost, schedule, and risk certainty.
Project development is the backbone of successful project execution, transforming initial ideas into actionable plans. From Front-End Loading (FEL) to Front-End Engineering Design (FEED), each phase of development plays a crucial role in reducing uncertainties, aligning stakeholders, and providing cost, schedule, and risk certainty. This structured approach ensures that by the time a project reaches Final Investment Decision (FID), it has a solid foundation for seamless execution.
This guide simplifies the complexities of project development by breaking down each phase—from FEL-0 to FEL-3/FEED—into key activities, objectives, and deliverables. Whether you’re planning a new facility or expanding existing operations, this roadmap will help you navigate project development with confidence and clarity.
Companion Content: Use this guide in conjunction with Streamlined Project Phases: The Deliverables That Make It Happen for a more complete picture of the subject.
Phase 1: FEL-0 – Business Opportunity Identification
Every project begins with an opportunity or problem. In FEL-0, the focus is on understanding the business drivers and determining whether the opportunity aligns with strategic objectives. The primary goal is to decide if the project is worth pursuing further.
Key Activities in FEL-0:
- Define the business need or opportunity.
- Brainstorm potential high-level solutions.
- Conduct a preliminary risk assessment to identify major challenges.
- Engage key stakeholders for input and alignment.
Deliverables:
- High-level business case: A document outlining the opportunity, strategic alignment, and potential benefits.
- Rough cost and schedule estimates: Preliminary estimates to provide a broad understanding of the investment required, typically with ±50% accuracy.
- Decision document: A go/no-go recommendation based on alignment with business objectives and feasibility.
Phase 2: FEL-1 – Conceptual Development and Feasibility Assessment
In FEL-1, the goal is to explore and evaluate various solutions to the problem or opportunity. By the end of this phase, a single, preferred option is selected for further development.
Key Activities in FEL-1:
- Develop and compare multiple options for addressing the opportunity.
- Perform high-level technical assessments of feasibility.
- Prepare rough-order-of-magnitude (ROM) cost and schedule estimates.
- Identify and assess risks for each option.
Deliverables:
- Preferred solution: A clearly identified best-fit option among the alternatives.
- Defined project scope and objectives: High-level goals and boundaries for the selected solution.
- Refined cost and schedule estimates: More accurate figures with ±30-40% precision to guide further planning.
- Risk register: A list of identified risks along with initial mitigation strategies.
Phase 3: FEL-2 – Scope Definition and Preliminary Design
In FEL-2, the chosen solution is further refined. The focus is on defining the project scope and reducing uncertainties to prepare for more detailed planning.
Key Activities in FEL-2:
- Define the project’s technical scope and boundaries.
- Create preliminary designs, such as process flow diagrams (PFDs) and equipment lists.
- Update cost and schedule estimates to ±20-25% accuracy.
- Conduct a detailed risk assessment and develop mitigation strategies.
- Outline initial execution strategies for procurement, construction, and commissioning.
Deliverables:
- Comprehensive project scope: A detailed definition of project requirements, deliverables, and boundaries.
- Preliminary designs: Including PFDs, block flow diagrams (BFDs), and preliminary equipment specifications.
- Updated cost and schedule estimates: With a higher degree of confidence, typically ±20-25% accuracy.
- Risk management plan: Detailed strategies to address identified risks.
- Preliminary execution plan: A roadmap for the procurement, construction, and commissioning phases.
Phase 4: FEL-3/FEED – Finalizing Scope, Design, and Execution Plans
FEL-3 and Front-End Engineering Design (FEED) are often treated as a single phase, where the project is finalized and prepared for execution. This phase provides the detailed design, cost certainty, and execution plans required for FID.
Key Activities in FEL-3/FEED:
- Advance designs to include technical drawings, piping and instrumentation diagrams (P&IDs), and 3D models.
- Refine cost and schedule estimates to ±10-15% accuracy.
- Develop procurement strategies, including vendor selection and bid packages.
- Prepare detailed construction plans and logistics.
- Validate risk mitigation strategies with comprehensive reviews.
Deliverables:
- Execution-ready scope: Fully developed project scope that meets all design and operational requirements.
- Detailed engineering designs: Including P&IDs, 3D models, and material specifications.
- Final cost and schedule baseline: Highly accurate estimates (±10-15%) serving as the foundation for execution.
- Vendor agreements and procurement plans: Contracts and strategies for key equipment and materials.
- Construction execution plan: Including safety, quality, and logistics strategies for seamless implementation.
Summary Table: Phases of Project Development
Phase | Key Activities | Objectives | Deliverables | Cost Estimate Accuracy |
FEL-0 | Define the business need or opportunity. Brainstorm high-level solutions. Conduct preliminary risk assessments. Engage key stakeholders. | Understand the business opportunity and align with strategic objectives. | High-level business case Rough cost and schedule estimates Go/No-Go decision document | ±50% |
FEL-1 | Develop and compare options. Perform technical feasibility assessments. Prepare ROM cost/schedule estimates. Identify and assess risks. | Select the preferred solution for further development. | Preferred solution Defined project scope and objectives Refined estimates Risk register | ±30-40% |
FEL-2 | Define technical scope. Create preliminary designs (PFDs, equipment lists). Update cost and schedule estimates. Conduct detailed risk assessment. Outline execution strategies. | Refine the project scope and reduce uncertainties for detailed planning. | Comprehensive project scope Preliminary designs (PFDs, BFDs) Updated estimates Risk management plan Preliminary execution plan | ±20-25% |
FEL-3 /FEED | Advance designs (P&IDs, 3D models). Refine cost and schedule estimates. Develop procurement strategies. Prepare construction plans. Validate risk mitigation strategies. | Finalize scope, design, and execution plans for FID. | Execution-ready scope Detailed engineering designs (P&IDs, 3D models) Final cost/schedule baseline Vendor agreements/procurement plans Construction execution plan | ±10-15% |
Achieving Final Investment Decision (FID)
At the conclusion of FEL-3/FEED, the project reaches the critical milestone of Final Investment Decision (FID). FID represents the commitment to move forward with execution, based on the detailed plans developed during FEL and FEED. To ensure a successful FID:
- Alignment: All stakeholders agree on the project’s scope, objectives, and execution plans.
- Accuracy: Cost and schedule estimates are precise, and risks are fully accounted for.
- Approvals: Permits, regulatory approvals, and other necessary authorizations are secured.
Conclusion
From FEL-0 to FEL-3/FEED, the project development process provides a roadmap for turning a concept into a fully executable project. Each phase builds on the previous one, reducing uncertainties and increasing confidence in the project’s feasibility, cost, and schedule. By following this structured approach, project teams can achieve a successful FID, paving the way for smooth execution and delivery. Whether you’re planning a new facility, expanding operations, or tackling a complex challenge, disciplined planning ensures success at every stage.
Disclaimer
The information provided in this post is for reference purposes only and is intended to serve as a guide to highlight key topics, considerations, and best practices. It does not constitute professional advice or a substitute for consulting regarding specific projects or circumstances. Readers are encouraged to evaluate their unique project needs and seek tailored advice where necessary. Please Contact Us to discuss your particular project.
