Offsite & Utility Systems

Offsite and utility systems include supporting infrastructure for major projects (e.g. captive power plants, water treatment, pipelines within a complex, storage tanks, etc.).

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These systems themselves may not generate revenue, but their delay can hold up the startup of the main facility, effectively causing the same opportunity cost as the main project.

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For example, if a refinery’s tank farm or a chemical plant’s utility unit is delayed, the entire complex might be unable to operate at capacity.

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Thus, the daily opportunity loss is linked to the primary facility’s output – often several million dollars per day for a large complex. Data specific to offsites is scarce, but such subsystems are frequently on the critical path of megaprojects. (In megaproject execution, any day of delay in achieving startup directly erodes project NPV and returns).

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We estimate only a handful of dedicated offsite/utility projects per year (many are integrated within bigger projects). Assuming perhaps ~5 projects/year that are mainly offsite/utilities, with moderate delays (~3months average), the annual lost opportunity might be on the order of <$1–2billion globally (since these delays typically manifest as part of the larger project’s delay cost).

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Daily Opportunity Loss (USD)

≈ $2–5 million per day (depending on the size of facility impacted; essentially the value of production deferred in the associated plant)

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Projects per Year (global)

~5 projects/year (major standalone offsite/utility system projects, not counting those embedded in bigger projects)

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Average Delay per Project

~3 months (≈ 90 days on average; offsites can be delayed by engineering integration issues)

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Annual Opportunity Loss (USD)

≈ $1 billion/year (order of magnitude of lost revenue, recognizing these delays usually coincide with main project delays)

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* If you are interested in our research and data sources, visit this link.