Risk Management in the LPG Refrigerated Green Terminal Project for Sustainable Development Goals

The LPG Refrigerated Green Terminal Project for Sustainable Development Goals seeks to enhance national stock resilience and reduce reliance on leased refrigerated LPG floating storage by a State-Owned Oil and Gas Company. Various challenges were encountered throughout the project, including resident demonstrations causing schedule disruptions, delays in project design due to client approval processes, and disparities in land data during tendering and implementation phases, among others. This research aims to identify the most critical risk by assessing the number of priority risks and risk categories. Effective risk management is pivotal in achieving project objectives. The methodology employed encompasses Fault Mode and Effect Analysis (FMEA), a 3D Risk Matrix, and a Pareto Diagram, supplemented by Analytical Hierarchy Process (AHP) software for risk weight determination. The study reveals a minimum Risk Priority Number (RPN) of 6, signifying low-risk severity, infrequent risk occurrence, and the company’s ability to detect these risks. Conversely, the highest RPN is recorded at 36, indicating significant risk severity, frequent risk occurrence, and challenges in risk detection by the company.


Introduction
The LPG Refrigerated Green Terminal Project for Sustainable Development Goals encountered various challenges, for instance, disruptions to the schedule caused by protests from local residents, delays in project design due to client approval document holdups, and discrepancies in land data between the tender phase and project execution, among other issues.
Within the dynamic process of construction projects, various risks can impact productivity, performance, quality, and cost parameters [1].Typically, these risks fall upon the project owner unless transferred or assumed by another party.Consequently, risk management is imperative for organizations as it plays a pivotal role in achieving project objectives [2].A highly effective approach for assessing the reliability of products or processes is Failure Mode and Effect Analysis (FMEA), which serves as a valuable tool for identifying and prioritizing significant risks [3,4].Thus, proactive measures are essential for pre-emptively addressing issues before they materialize.
Risks can be handled in a way that is reduced, transferred to other responsible activities or parties, absorbed, and avoided by implementing quality control practices and procedures [1].ISO 31000 is a generic risk management standard.This standard has a broader and conceptual perspective [2].This standard aims to guide industries to manage different types of risk from different industries with different organizational sizes, types, complexity, structures, activities, and locations [3].This standard can be implemented in several fields, such as in power plants [4][5][6][7][8][9][10].Research on the oil and gas sector still needs to be developed even though the ocean renewable energy sector is being researched a lot [11][12][13][14][15].This research was conducted to identify, analyse, and evaluate risks to be given treatment to reduce the impact of risks regarding ISO 31000:2018.The risk obtained will be assessed using the FMEA method to compute the Risk Priority Number (RPN) and the risk matrix to categorize the existing risk.Subsequently, the most critical risk will be chosen through the Pareto chart approach.In order to mitigate potential consequence, preventive measure will be applied to the identified risks.

ISO 31000:2018
This study cites ISO 31000:2018 as it is a versatile standard applicable across industries.ISO 31000 is designed not to standardize risk management practices among companies but to offer supportive standards for implementing risk management that align with company objectives.The risk management process involves methodically applying policies, procedures, and practices to various activities, including communication, consultation, contextual setting, risk assessment, management, review, documentation, monitoring, and reporting [19,20].This process is illustrated in Figure 2. In Figure 4, it is known that the process of performing risk management has several stages, namely: 1. Communication and consultation 2. Scope, context, and criteria 3. Risk assessment The risk evaluation needs to be conducted in a methodical and cooperative manner, based upon the insights and perspectives of stakeholders.
• Risk identification Hazard distinguishing proof points to discover, recognize, and depict dangers that might help or avoid the organization from accomplishing its destinations.Significant, exact, and up-todate data is basic in distinguishing dangers.Organizations can utilize different methods to recognize instabilities influencing one or more goals.

• Risk analysis
The reason for the chance investigation is to get the nature of the hazard and its characteristics.
Hazard examination includes considering vulnerability, sources of chance, results, probability, occasions, scenarios, controls, and their viability.The detail and complexity of the chance investigation can vary depending on the reason for the examination, the accessibility and unwavering quality of the data, and the accessible assets.Expository strategies can be carried out qualitatively, quantitatively or a combination of those, depending on the circumstances and the objectives.arranging, and executing hazard treatment, evaluating the adequacy of given chance treatment, and choosing whether the remaining chance is satisfactory.

Monitoring and review
The reason of observing and survey is to guarantee and progress the quality and viability of handle plan, execution, and comes about.Continuous observing and intermittent survey of the hazard administration prepare, and it comes about ought to be a arranged portion of the chance administration handle, with clearly characterized obligations.Observing and audit ought to be carried out at all prepare stages, counting arranging, gathering, and dissecting data, recording comes about, and giving criticism.The comes about of observing and survey ought to be consolidated into all administration exercises, estimations, and announcing of the organization's execution.

Recording and reporting
The hazard administration handle and it comes about ought to be recorded and detailed through fitting components.Recording and detailing point to communicate hazard administration exercises and comes about over the organization, give data for choice making, progress chance administration exercises, and help partner intuitive.

Fault Mode and Effect Analysis (FMEA)
FMEA was developed by the aerospace industry in the 1960s and is known as a design methodology with proven reliability and strict safety requirements.Ford implemented FMEA for production, design, safety and regulatory compliance in the automotive industry by the late 1970s.As a result, FMEA is further adopted by many industrial practices, such as aerospace, military, automobile, electrical, mechanical, and semiconductor [16].The primary aim of FMEA is to proactively prevent the potential failure of a new design, process, or system in meeting specified requirements within defined conditions, including objectives and constraints.Additionally, FMEA aims to enhance design and testing methodologies to eliminate failures, ultimately leading to the development of highly competitive products [3].In the case of Process FMEA, it identifies and mitigates failures, their effects, and associated risks within a process or product [21].FMEA involves two distinct stages, which are: 1. Evaluating the risk of failure There are three determining factors to evaluate the risk and consequences of the failure: • Severity : The extent of consequences resulting from a failure • Occurrence : The likelihood or frequency of failure • Detection : The probability of identifying a failure before the consequences are realized 2. Assessing the Risk Priority Number (RPN) Perform the calculation of the Risk Priority Number using the following formula:

3D risk matrix
In a two-dimensional risk analysis, the risk is assigned an indicative level for Likelihood, Cost of Impact or Time of Impact.The higher the product or letter combination, the more attention is paid to the risk; thus, mitigation measures are designed.However, the risk is more complex in the real world, and twodimensional risk analysis can only be used as a steppingstone.The 3D risk matrix makes it possible to consider risk in the space formed between the coordinates, which is pyramidal in shape.This pyramid is formed from the edges of the cube (coordinates) and the inner surface between the edges, allowing the use of decimal numbers for the magnitude of Likelihood, Cost of Impact, or Time of Impact [17].

Pareto chart
As stated by Vilfredo Pareto in 1895, the Pareto principle states, 'In any set of elements controlled, small fraction chosen, in terms of the number of elements, always accounts for the large fraction in terms of effect'.This principle proposes that approximately 80% of the total impact of errors in any industry scenario stems from a small number of error types, referred to as 'vital few'.While the remaining 20% of impacts come from other types of errors, known as 'many trivial'.This concept was later popularized as "Pareto Analysis" [18].
Pareto analysis is instrumental in the initial phase of Six Sigma analysis, helping identify the most critical faults among the 'vital few.'These 'vital few' errors are investigated to determine their root causes, enabling proactive measures to prevent or mitigate their impact.Pareto analysis is pivotal in guiding quality problem-solving efforts and identifying crucial success factors for Six Sigma implementation.It is essential to emphasize that the utility of Pareto analysis results hinges on the data's source being a stable process.
The stages in conducting a risk evaluation using the Pareto Chart are as follows [3]: 1. Determine the level of importance between risks.The level of risk importance is carried out by comparing one risk to another.2.Then, the assessment results of the importance of this risk are entered into the AHP software to produce output in the form of risk weights.This software is a program that is used as a tool to assist decision-making by AHP method.By structuring a hierarchy of various considerations to develop weights or priorities, The AHP method is effective to solve complex problems [19].3. Next, the risk value is calculated by multiplying the Risk Priority Number with the previous risk weight.4.Then, the risk value is divided by the total risk value to obtain the percentage of each risk. 5. Calculating accumulated risk is carried out by adding the percentage of the risk with the previously accumulated risk.6.According to Pareto Chart theory, 20% of the total risk will be selected, which will provide 80% of the impact so that the risk can then be selected for risk treatment.

Risk treatment
Risk avoidance or prevention can be employed as an internal control for the identified risk.Risk avoidance is commonly enforced when the risk is deemed crucial enough.It is done by proactively avoiding actions that will lead to the identified risk.Evaluation and monitoring of the application of the chosen risk management technique are critical to determining the effectiveness of the option [20].

Risk identification
In this stage, risk identification is carried out to identify, find, and describe risks in the LPG Refrigerated Green Terminal Project for Sustainable Development Goals.This risk identification process is carried out by the company listed in the risk register.The risk register used in this study is a risk register from October 2020 -July 2021.The data obtained from the risk register is a list of risks, causes, and impacts of risk, a severity, occurrence, and detection rating.The company determines severity, occurrence, and detection rating by referring to the risk criteria determined by the company.

Risk assessment
Risk analysis seeks to determine the nature and characteristics of the individual risk.In this stage, two methods will be used: FMEA and 3D Risk Matrix.FMEA is used to find the RPN obtained from probability, consequences, and detection.The calculation results of the RPN are shown in Table 1.The FMEA will measure any risk associated with the failure of critical process inputs but will not indicate what level should be defined as an acceptable or assumed risk.Therefore, a risk matrix is used to determine the risk level from the occurrence frequency and consequences arising from the risk.
In this study, a 3D risk matrix is used because a 2-dimensional risk matrix is insufficient to describe the risk's actual complexity.There are three components in the 3D risk matrix, namely severity, occurrence, and detection.Each component is on a different axis, namely the x, y, and z axes.
The color of the risk category in the risk matrix is determined by calculating the first and third quartile of the obtained RPN.Data in the first quartile indicate that the risk is included in the low category, while the risk in the third quartile indicates that the risk is included in the high-risk category [21].Based on Table 1 and Figure 3, the results of the analysis are as follows: 1. Risk with Low-Risk Category Through the calculation of the RPN and the Risk Matrix, four risks are in the low-risk category, which means that the risk is easy to detect and has a small impact.The probability of the risk occurring is small.The risk in the low category has an RPN value of 6 to 12.The risk with the smallest RPN is the risk of potential loss of fence work having an RPN of 6, then the risk of work accidents when climbing the vertical ladder with an RPN of 8, and the risk of lack of construction equipment and experienced local labor and hydrotest blocked by RPN 12.

Risk with Medium Risk Category
From the results of the calculation of the RPN and the Risk Matrix, six risks are in the moderate risk category, which means that the risk is not easy to detect, has a moderate impact, and the probability of the risk occurring is moderate.The risk with this medium category has an RPN value of 16 to 24, namely the risk of delays in the tank schedule and requests for maintenance/storage of Minutes of Handover of Work 2 with RPN 16, the risk of terminating project activities with RPN 18, as well as the risk of hydrotest tank inefficiency, delays in all engineering project designs, and loss of procurement costs with RPN 24.

Risk with High-Risk Category
Three risks are in the high-risk category, which means that the risk is difficult to detect or even cannot be detected, has a high impact, and the probability of the risk occurring is high.Risks in this category have a RPN of 36, the risks with the highest RPN include the risk of inefficiency from tank work, increase in plate material prices, and Mechanical completion delays due to the rainy season with an RPN of 36.

Risk evaluation
Due to the risk originating from various departments (areas) within the company, it is essential to do a risk weight assessment to determine the level of importance of each risk.The risk weight assessment is carried out by comparing the importance of one risk to another.The level of importance assigned to each risk is subjective to the authors.In determining the calculation of risk weights, the AHP software is used.Then the risk weight can be processed into a risk value.Table 2 shows which risks need treatment.According to the Pareto Chart method, the risk will be selected with a total of 80% of the total accumulated risk.After sorting from the highest risk percentage to the lowest, then 20% of the total risk is selected because it is the risk that impacts 80% of the overall risk [18].
In Table 2, five risks are included in 80% of the total accumulated risk, namely the risk of increasing plate material prices, mechanical completion delays due to the rainy season, inefficiencies from tank work, inefficiencies in hydrotest tanks, and delays in the overall engineering design project.Then, risk number 5 was also chosen because it has the same risk value as risk values number 3 and 4. Meanwhile, other risks are not treated because they do not have a significant impact on project continuity.The calculation results in Table 2 can then be arranged into a Pareto diagram.Based on the diagram in Figure 4, the X-axis shows the number of risks.The total risk value located on the left Y axis shows the most influential risk value according to the predetermined weight in the form of a blue bar graph.The higher the blue bar, the higher the total risk value.While the accumulated risk is shown on the Y axis on the right, showing the cumulative value of risk, which is also represented through the Pareto line (yellow color).

Risk treatment
In this stage, the risks that have been previously selected are then treated as these risks.Risk treatment is given to minimize the impact that will arise from the risk.Risk treatment is determined by having discussions with company experts.The following is the treatment given for the selected risks:

Document approval should be done as early as possible
The sooner the document is approved, the faster the EPC process will be carried out to avoid the risk of delays.

Client/owner team placed together with contractor engineers
This placement is done so that the party representing the contractor and the owner/client can communicate effectively so that, if necessary, approvals and others can be carried out directly, effectively and efficiently.Accelerate the formation of the engineering team With the formation of an engineering team, the earliest process in EPC, namely engineering, will be completed more quickly, which of course, will affect the start of the procurement process to construction Create records and Technical Query for proof of Change Order on design changes If every change that appears in the field is recorded, submitted, and approved quickly, project delays can be avoided, and any changes can be directly executed in the project Adding engineering team manpower/manhours With the addition of the number of workers and the work duration, the project's work process will be more likely to be completed on time or even before the deadline for completion Make notifications or reminders to the owner regularly This needs to be done to prevent delays in document approval and others that can delay the implementation of project work

Loss of procurement costs
Review the contract again and submit a price increase claim to the owner If there is an unavoidable price increase, the company can file a price increase claim to the owner to cover the additional costs incurred so that no losses occur Benchmarks of similar projects By doing benchmarking, the company can find out the standard market prices that are commonly used in similar projects.This will be very useful to avoid buying at a price that exceeds the standard benchmark Make a Purchase Order before the plate price increases This is done to avoid an increase in the price of materials/equipment from a predetermined price so that there is no inefficiency in procurement costs 1298 (2024) 012034 IOP Publishing doi:10.1088/1755-1315/1298/1/01203411

Conclusion
The lowest RPN with a value of 6 is the risk of potential loss of fence work.In contrast, the highest RPN with a value of 36 is the risk of inefficiency from tank work, the increase in plate material prices, and the mechanical completion delays due to the rainy season.Six risks were identified as the 'vital few' through the Pareto Diagram method: the risk of increasing plate material prices, mechanical completion delays due to the rainy season, inefficiencies from tank work, inefficiencies in hydrotest tanks, delays in overall engineering design projects, and loss of procurement costs.These risks are then selected for treatment.The treatment given to the risk of rising plate material prices is to monitor the movement of exchange rates and bank interest rates.The treatment given for the risk of delay of mechanical completion due to the rainy season is a night work permit on site, maximizing pre-fabrication, and documenting delayed work for EOT (Extension of Time) claims.The treatment given for the risk of inefficiency from tank work is to propose another vendor for the procurement of the tank foundation heating system.The treatment given for the risk of inefficiency in the hydrotest tank is to propose using seawater for hydrotest.The treatment given for the risk of delay in the entire engineering design project is to approve documents as early as possible, place the client/owner team together with the main contractor engineer, accelerate the formation of the engineering team, create records and TQ for evidence, add manpower/manhours to the engineering team, and make a reminder to the owner.The treatment given for the risk of loss of procurement costs (material/equipment inefficiency) is reviewing contracts and submitting price increase claims, benchmarking similar projects, and conducting PO before the plate price increases.
As mentioned earlier, the project's objectives are enhancing national stock resilience and reducing dependencies on leasing the Refrigerated LPG floating storage in Remen Village, Jenu District, Tuban Regency, East Java.This project has a scope of work covering civil with the scope of fencing work, Double Wall Tank (DWT) tank foundation work, and spherical tank foundation work.The scope of mechanics includes DWT tank erection work, accessories, spherical tank work, and accessories.Also, the scope of testing and commissioning includes hydro test work, NDT work, mechanical test work, and Nitrogen purging work with a contractual duration of 30 months from October 2019 to March 2022.This study obtained data from the October 2020 -July 2021 risk register.From October 2020 to July 2021, the tasks executed in this project encompassed the assembly and welding of both the external and internal shells, the construction of the roof, the elevation of the roof's air components, and the installation of the base for Double Wall Tanks T-201 and T-301.Additionally, the project involved the erection, inspection, and testing activities associated with Spherical Tanks V-101 and V-102.

Table 1 .
Calculation Results using the FMEA method.