Owner’s engineer: what they do and when it pays on an oil & gas project

An owner’s engineer is an independent engineering team that works for the project owner, not the contractor. It reviews the design, checks progress and quality, evaluates bids and advises the owner on key decisions, so the owner gets the facility it intended rather than the literal reading of the contract.

When an operator hands a project to an EPC or EPCM contractor, the contractor’s engineers work for the contract. The owner’s engineer works for you.

What does an owner’s engineer do?

• Design reviews: checks that the design meets your specifications, operating philosophy and standards, beyond the contract minimum. Typical review points are the design basis, PFDs and P&IDs, plot plans, equipment data sheets and HAZOP actions.
• Progress and quality audits: looks behind the progress report at what is actually complete, on paper and on site.
• Technical bid evaluation: compares vendor and contractor offers on scope and technical merit, not only price.
• Change and deviation review: gives an independent view when the contractor proposes a change, a deviation from specification or a shortcut.
• Decision support: prepares the technical basis for the owner’s go / no-go and investment decisions.
• Commissioning and handover support: checks that documentation, as-builts and spare parts are complete before the owner takes over.

Owner’s engineer vs EPCM contractor

When does an owner’s engineer pay for itself?

You have a small in-house engineering team.

Many producers run lean. An owner’s engineer gives you the depth of a project team without hiring one.

The project is large or unfamiliar.

A first gas plant, a new process or a new region carries risks your team has not seen before.

The contract is lump-sum (EPC).

Under a fixed price, the contractor has a natural incentive to meet the letter of the specification at the lowest cost. Someone needs to check that the letter matches your intent.

The schedule is aggressive.

Fast projects make fast decisions. An independent review costs far less than fixing a wrong decision after start-up.

Partners or lenders require it.

Joint-venture partners and lenders often want an independent technical opinion on the project.

How much does an owner’s engineer cost?

It depends on the project size and the scope of review. Because an owner’s engineer is a small, senior team, its cost is a small fraction of the EPC or EPCM contract. The comparison that matters is with the cost of one late design change, one wrong equipment selection or one month of delay.

How to choose an owner’s engineer

• Engineers with hands-on experience of your type of facility, not only document reviewers
• Clear, short reports with a recommendation, not a long list of comments
• A working style that solves problems early with the contractor instead of assigning blame late
• Independence: no commercial interest in the contractor’s work or the equipment being bought

Our leadership has worked on both sides: in design offices, in fabrication shops and running projects. That helps us see when a design will be hard to build or operate, and say so while it is still cheap to change. See Engineering, read what a project health assessment finds, or contact us about your project.

Frequently asked questions

Is an owner’s engineer the same as a project manager?

No. The owner’s project manager runs the project for the owner. The owner’s engineer provides the technical review and advice the project manager relies on. On smaller projects one firm can do both.

When should the owner’s engineer be appointed?

As early as possible, ideally before FEED or at least before the EPC contract is awarded. Most of the value comes from influencing the design basis and the contract specification.

Can the owner’s engineer also do the detailed engineering?

Normally not on the same project, because it would review its own work. It can do studies and FEED before the EPC contract and then act as owner’s engineer during execution.