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Capital Cost Estimation

 NMSU Chemical Engineering
        Ch E 452
Outline

•   Types of estimates
•   Adjusting costs for changes in capacity
•   Adjusting costs for changes in time
•   Total plant cost estimates
    –   Direct, indirect, etc.
    –   Lang Factors
    –   Module cost approach
    –   Effect of temperature and pressure
• Capcost program
Capital Cost Estimate Types

• 1. Order of Magnitude Estimate (Feasibility)
   – + 40%, - 20%
   – BFD , Process Modification
• 2. Study Estimate / Major Equipment
   – + 30%, - 20%
   – PFD , Cost Chart
Capital Cost Estimates Types (cont’d)

• 3. Preliminary Design (Scope) Estimate
   – + 25%, - 15%
   – PFD , vessel sketches , equip. diagrams
• 4. Definitive (Project Control) Estimate
   – + 15%, - 7%
   – PFD , P&ID, all vessel sketches, equip. diagrams,
     preliminary isometrics
Capital Cost Estimates Types (cont’d)

• 5. Detailed (Firm or Contractors) Estimate
   – + 6%, - 4%
   – Everything included – ready to go to construction phase


• Estimate low so actual cost will be high (+)
• Estimate high so actual cost will be low (-)
• Why is + # > - #.?
Cost of Estimate – See Also Table 7.2


Accuracy
             1
                  2
                      3
                          4
                               5

           Cost of Estimate (Time)
Factored Estimates

• Total Plant Capital Cost CTM (Fixed Capital
  Investment, FCI) can be estimated by a factored
  estimate.
• In a factored estimate, one first estimates the cost of
  individual pieces of equipment, then estimates the
  total installed cost by multiplying by factors.
Definitions
CoP,i    Purchased cost equipment i (base conditions)
FoBM,i   Bare module $ factor (base conditions).
CoBM,i   BM equipment cost (base conditions).
FBM,I    BM factor corrected for not CS 1atm
CBM,I    Bare module equipment cost
FM       Materials factor (1 for carbon steel)
FP       Pressure factor (1 for pressure ~1 atm)
CTM      Total module cost (addition to existing plant)
CGR      Grass roots cost (new plant, new site)
Estimating Purchased Equipment Cost
• Vendor quote
   – Most accurate
      • based on specific information
      • requires significant engineering
• Use previous cost on similar equipment
  and scale for time and size
   – Reasonably accurate
      • beware of large extrapolation
      • beware of foreign currency
• Use cost estimating charts and scale for time
   – Less accurate
   – Convenient
Effect of capacity on cost
• A equipment cost attribute                                n
• C purchased cost
                                           Ca        Aa
• n cost exponent                          Cb        Ab
   – typically 0.4-0.8
   – Often use n = 0.6, then refer to eqn as the 6/10ths rule
   – 6/10ths rule can be used to scale up an entire process
• a unit with required attribute
• b unit with base attribute
   Exponents tabulated in numerous sources, such as Perry's
   Chemical Engineer's Handbook
   In general, the larger the equipment, the lower the cost of
   equipment per unit of capacity
Example 1

• A New Plant Ordered a Set of Floating Head Heat
  Exchangers (Area = 100 m2) cost $92,000. What
  Would Cost be for a Heat Exchanger for Similar
  Service if Area = 50 m2 and n = 0.44 ?
Example 1 - Solution

     Ca æ Aa ö
                   n
                                            æ Aa ö   n

       =ç ÷                          Ca = Cbç ÷
     Cb è Ab ø                              è Ab ø

             æ 50 ö0.44
       92,000ç     ÷              Ca $67,300
             è 100 ø
100 m2 Exchanger is not twice as expensive as a 50 m2 exchanger

                       Economy of Scale
Effect of Time

• Time increases – cost increases (inflation)
• Inflation is measured by cost indexes - Figure 7.3
   – Chemical Engineering Plant Cost Index (CEPCI)
   – Marshall and Swift Process Industry Index
• Numbers based on “basket of goods” typical for
  construction of chemical plants - Table 7.5
Effect of time on cost

                               C 2 I2
                                  =
•   I   cost index             C1 I1
•   C    purchased cost
•   1    base time when cost is known
•   2    time when cost is desired
Cost Indicies
• Marshall & Swift Equipment Cost Indexes
   – all-industry equipment index - arithmetic average of indexes for 47
     different types of industrial, commercial, and housing equipment
   – based on an index value of 100 for the year 1926
   – account for cost of machinery and major equipment plus costs for
     installation, fixtures, tools, office, and minor equipment
• Engineering News-Record Construction Cost Index
   – indicates variance in labor rates and materials costs for industrial
     construction
   – one of three basis’ used: 100 for 1913, 1949 or 1967
• Nelson-Farrar Refinery Construction Cost Index
   – petroleum industry construction costs
   – basis - 100 for 1946
Marshall & Swift Equipment Cost
             Index
Marshall & Swift Equipment Cost
             Index
Chem. Engr. Plant Cost Index (CEPCI)
• construction costs for chemical plants
• equipment, machinery and supports, 61%; erection and
  installation labor, 22%; buildings, materials, and labor, 7%;
  engineering and supervision, 10%
• major components subdivided as: fabricated equipment, 37%;
  process machinery, 14%; pipe, valves, and fittings, 20%;
  process instruments and controls, 7%; pumps and
  compressors, 7%; electrical equipment and materials, 5%;
  structural supports, insulation and paint, 10%
• basis - 100 for 1957-1959
Chemical Engineering Plant Cost Index from 1950 to 2010

700


600


500


400


300


200


100


 0
  1950   1960       1970        1980        1990        2000          2010
Table 7.5: The Basis for the Chemical Engineering Plant Cost Index
       Components of Index                    Weighting of Component (%)
 Equipment, Machinery and Supports:
 (a) Fabricated Equipment                     37
 (b) Process Machinery                        14
 (c) Pipe, Valves, and Fittings               20
 (d) Process Instruments and Controls         7
 (e) Pumps and Compressors                    7
 (f) Electrical Equipment and Materials       5
 (g) Structural Supports, Insulation, Paint   10
                                              100   61% of total

 Erection and Installation Labor              22


 Buildings, Materials, and Labor              7


 Engineering and Supervision                  10


   Total                                      100
Example 2

• Cost of vessel in 1993 was 25,000, what is estimated
  cost today?

                    Inow               551
Cnow      C1993                 25,000
                    I1993              359
Example 3 - Accounting for Time and Size

• 2 heat exchangers, 1 bought in 1990 and the other in
  1995 for the same service
                   A                  B
    Area =        70 m2             130 m2
    Time=         1990              1995
    Cost =        17 K              24 K
      I =         358               381
Example 3 (cont’d)

• What is the Cost of a 80 m2 Heat Exchanger Today ?

• Must First Bring Costs to a Common Time
                                   551
     A = 70        C A 2010     17           26
                                   358
                                   551
     B = 130       CB 2010      24           37
                                   381
Example 3 (cont’d)

C KAn
          n                    log 37 log 26
26 K 70                  n                          0.57
              n
                              log 130 log 70
37 K 130
                             C       26
                    K          n      0.57
                                             2.31
                             A      70
                  0.57
C 2.31 80                    28.1
Total Cost of Plant

• Purchased cost – equipment f.o.b.
   – f.o.b. – freight (free) on board
      • commonly used when shipping goods to indicate who pays loading
        and transportation costs, and/or the point at which the
        responsibility of the goods transfers from shipper to buyer
• Installed cost – Often 3 to 8 times larger than
  purchased cost
Installed Equipment Cost (Table 7.6)

• 1. Direct Project Expenses
   – Equipment
   – Material for installation
   – Labor for installation


• 2. Indirect Project Expenses
   – Freight, insurance, and taxes
   – Construction overhead
   – Contractor engineering expenses
Installed Equipment Cost (cont’d)

• Contingency and Fee
   – Contingency
   – Contractor fee


• Auxiliary Facilities
   – Site development
   – Auxiliary buildings
   – Off-sites and utilities
Equipment Costs
• Purchased cost Cpo is typically estimated by an
  equation of form:
            o                                                2
     log10 Cp     K1 K 2 log10 A            K3 log10 A
   – where Ki are a series of constants associated with the type
     of equipment being costed, and
   – A is the capacity (independent variable) of the unit

• Cpo is the base condition cost (i.e., for carbon steel at
  atmospheric condition)
Equipment Costs
                            Heat Exchanger                                  K1       K2       K3
                            Fixed tube, sheet, or U tube                 4.3247     -0.303   0.1634
                            Floating Head                                4.8306    -0.8509   0.3187
                            Bayonet                                      4.2768    -0.0495   0.1431
                            Kettle Reboiler                              4.4646    -0.5277   0.3955

               10000000
                                fixed tube sheet
                                floating head
                                bayonet
                                kettle reboiler
                                                                                  K values taken from the
                1000000
                                                                                  CAPCOST® program
cost, U.S. $




                 100000




                  10000
                          100                      1000                  10000

                                  exchanger area (sq ft) (capacity, A)
Chapter 7 capital cost estimation
Module Costing Technique
• The bare module cost CBM is the sum of the direct and indirect costs
  associated with equipment purchase and installation.
      • The bare module cost CBM can be found from the expression:

                 CBM = CP FBM = CP (B1 + B2FMFp)
    – CP is the purchased cost of the base condition (most common
      material, usually carbon steel, operating at ambient pressure)
    – FBM is a multiplicative factor called the bare module cost factor that adjusts
      for all of the previously discussed costs, as well as for specific materials of
      construction (FM) and for actual operating pressures (Fp).
    – B1 and B2 are factors that are dependent on equipment-type.
    – The superscript is used to denote base condition factor (i.e, carbon steel and
      ambient pressure operation).
Pressure Factors
• A pressure factor Fp,vessel for a vessel of diameter D and
  operating at pressure P (in units of bar) is based the
  ASME code for pressure vessels.
• Assuming a maximum allowable carbon steel stress of
  944 bar, a 90% weld efficiency, a minimum allowable
  vessel thickness of ¼", and a corrosion allowance of ⅛"
                            P 1D
                                        0.00315
                       2 850 0.6 P 1
            Fp, vessel
                                0.0063
• For pressures below -0.5 barg, Fp,vessel = 1.25
• For all other process log F C C log P             C3 log10 P
                                                                 2
                              10 p    1   2   10
  equipment,
Module Factor Approach – Pressure
             Factors




  Figure 7.6 Pressure Factors for Carbon Steel
  Vessels
Module Factor Approach – Pressure
             Factors
Material Factors
     material          FM    .
   carbon steel        1.0
stainless steel clad   1.7
  stainless steel      3.1
    nickel clad        3.6
      nickel           7.1
   titanium clad       4.7
     titanium          9.4
Direct Project Expenses
                               CDE = CP + CM + CL
                          CDE = CP (1 +        M)(1     +   L)
• Equipment f.o.b. cost CP
    – purchased cost of equipment at manufacturer's site (free on board)
• Materials required for installation CM =         M   CP
    – includes all piping, insulation and fire proofing, foundations and structural
      supports, instrumentation and electrical, and painting associated with the
      equipment.
• labor to install equipment & mat'l CL =      L   (CP + CM) = CP   L   (1 +   M)
    – all labor associated with installing the equipment and materials
Indirect Project Expenses
                              CIDE = CFIT + CO + CE
                  CIDE = CP (1 +         M)    (   FIT   +   L   O   +   E)

• Freight, insurance, taxes CFIT =       FIT   (C0 + CM)
    – includes all costs for shipping equipment and materials to the plant site
• Construction overhead CO =        O   CL
    – includes fringe benefits, sick leave, vacation; labor burden such as social
      security and unemployment insurance, etc.; and salaries and overhead for
      supervisory personnel
• Contractor engineering expense CE =              E   (CP + CM)
    – includes salaries and overhead for engineering, drafting, and project
      management personnel
Bare Module Cost
• Substitution and collection of like terms:
                     CBM = CIDE + CDE
     CBM = CP (1 +    M)   (1 +   L   +   FIT   +   L   O   +   E)



• Sum of Direct and Indirect costs for a process unit
Contingency and Fee
• A contingency factor covers unforeseen
  circumstances (15% for well understood systems)
    CCont =   ContCBM

         = CP (1 +      M)   (1 +   L   +   FIT   +   L O+   E   Cont




• Contractor Fee (typically assumed to be 3%)
    CFee =    FeeCBM

        = CP (1 +       M)   (1 +   L   +   FIT   +   L O+   E   Fee
Total Module Cost

• Total cost for purchase and installation of a process
  unit, CTM
                   CTM = CBM + CCont + CFee
           CTM = CP FBM + CP                    Cont   + CP   Fee



   CTM = CP (1 +   M)(1   +   L   +   FIT   +   L O+     E     Fee   +   Cont)
Bare Module Cost for
                    nonbase conditions
• Pressure Factors (FP) – calculated from expression specific to type of
  vessel (see Appendix A)
• Materials of Construction Factors (FM) – simple mutiplicative factor based
  on relative cost of material to base case material
    – Carbon steel (base case)
    – Low-alloy steel (low/moderate)
    – Stainless steel, Aluminium and Copper and their alloys (moderate)
    – Titanium and Nickel and their alloys (high)

               CBM = CP FP FM = CP [FP FM (1+fP&I)+FBM -1-fP&I]
   where fP&I represents fraction of installation associated with piping and instrumentation
Grass Roots Cost (new site)
• Includes costs for site development, auxiliary
  buildings, and off-sites and utilities. Such facilities
  depend typically on materials of construction and/or
  operating pressure, and can range from 20 to 100%
  of the base module cost. A value of 50% is a good
  starting point to assume.

                  CGR = CTM + 0.5 CBM,i
      summation is performed over all n process units in the design
CAPCOST®

• CAPCOST® is a Microsoft Excel program for
  estimating bare module, total module, and grass
  roots costs of complex chemical plants.
Lang Factors

• Table 7.7
• Use multiplier depending on type of plant to escalate
  equipment costs to installed costs
• Flang = 4.74     Fluid processing plant
        = 3.63     Solid-Fluid processing plant
        = 3.10     Solid processing plant
Lang Factors (cont’d)

                    n
CTM        FLang          C pi
                    i 1


Total Module Cost         Purchased Cost of Major Equipment
                                From Preliminary PFD
                          (Pumps, Compressors, vessels, etc.)

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Chapter 7 capital cost estimation

  • 1. Capital Cost Estimation NMSU Chemical Engineering Ch E 452
  • 2. Outline • Types of estimates • Adjusting costs for changes in capacity • Adjusting costs for changes in time • Total plant cost estimates – Direct, indirect, etc. – Lang Factors – Module cost approach – Effect of temperature and pressure • Capcost program
  • 3. Capital Cost Estimate Types • 1. Order of Magnitude Estimate (Feasibility) – + 40%, - 20% – BFD , Process Modification • 2. Study Estimate / Major Equipment – + 30%, - 20% – PFD , Cost Chart
  • 4. Capital Cost Estimates Types (cont’d) • 3. Preliminary Design (Scope) Estimate – + 25%, - 15% – PFD , vessel sketches , equip. diagrams • 4. Definitive (Project Control) Estimate – + 15%, - 7% – PFD , P&ID, all vessel sketches, equip. diagrams, preliminary isometrics
  • 5. Capital Cost Estimates Types (cont’d) • 5. Detailed (Firm or Contractors) Estimate – + 6%, - 4% – Everything included – ready to go to construction phase • Estimate low so actual cost will be high (+) • Estimate high so actual cost will be low (-) • Why is + # > - #.?
  • 6. Cost of Estimate – See Also Table 7.2 Accuracy 1 2 3 4 5 Cost of Estimate (Time)
  • 7. Factored Estimates • Total Plant Capital Cost CTM (Fixed Capital Investment, FCI) can be estimated by a factored estimate. • In a factored estimate, one first estimates the cost of individual pieces of equipment, then estimates the total installed cost by multiplying by factors.
  • 8. Definitions CoP,i Purchased cost equipment i (base conditions) FoBM,i Bare module $ factor (base conditions). CoBM,i BM equipment cost (base conditions). FBM,I BM factor corrected for not CS 1atm CBM,I Bare module equipment cost FM Materials factor (1 for carbon steel) FP Pressure factor (1 for pressure ~1 atm) CTM Total module cost (addition to existing plant) CGR Grass roots cost (new plant, new site)
  • 9. Estimating Purchased Equipment Cost • Vendor quote – Most accurate • based on specific information • requires significant engineering • Use previous cost on similar equipment and scale for time and size – Reasonably accurate • beware of large extrapolation • beware of foreign currency • Use cost estimating charts and scale for time – Less accurate – Convenient
  • 10. Effect of capacity on cost • A equipment cost attribute n • C purchased cost Ca Aa • n cost exponent Cb Ab – typically 0.4-0.8 – Often use n = 0.6, then refer to eqn as the 6/10ths rule – 6/10ths rule can be used to scale up an entire process • a unit with required attribute • b unit with base attribute Exponents tabulated in numerous sources, such as Perry's Chemical Engineer's Handbook In general, the larger the equipment, the lower the cost of equipment per unit of capacity
  • 11. Example 1 • A New Plant Ordered a Set of Floating Head Heat Exchangers (Area = 100 m2) cost $92,000. What Would Cost be for a Heat Exchanger for Similar Service if Area = 50 m2 and n = 0.44 ?
  • 12. Example 1 - Solution Ca æ Aa ö n æ Aa ö n =ç ÷ Ca = Cbç ÷ Cb è Ab ø è Ab ø æ 50 ö0.44 92,000ç ÷ Ca $67,300 è 100 ø 100 m2 Exchanger is not twice as expensive as a 50 m2 exchanger Economy of Scale
  • 13. Effect of Time • Time increases – cost increases (inflation) • Inflation is measured by cost indexes - Figure 7.3 – Chemical Engineering Plant Cost Index (CEPCI) – Marshall and Swift Process Industry Index • Numbers based on “basket of goods” typical for construction of chemical plants - Table 7.5
  • 14. Effect of time on cost C 2 I2 = • I cost index C1 I1 • C purchased cost • 1 base time when cost is known • 2 time when cost is desired
  • 15. Cost Indicies • Marshall & Swift Equipment Cost Indexes – all-industry equipment index - arithmetic average of indexes for 47 different types of industrial, commercial, and housing equipment – based on an index value of 100 for the year 1926 – account for cost of machinery and major equipment plus costs for installation, fixtures, tools, office, and minor equipment • Engineering News-Record Construction Cost Index – indicates variance in labor rates and materials costs for industrial construction – one of three basis’ used: 100 for 1913, 1949 or 1967 • Nelson-Farrar Refinery Construction Cost Index – petroleum industry construction costs – basis - 100 for 1946
  • 16. Marshall & Swift Equipment Cost Index
  • 17. Marshall & Swift Equipment Cost Index
  • 18. Chem. Engr. Plant Cost Index (CEPCI) • construction costs for chemical plants • equipment, machinery and supports, 61%; erection and installation labor, 22%; buildings, materials, and labor, 7%; engineering and supervision, 10% • major components subdivided as: fabricated equipment, 37%; process machinery, 14%; pipe, valves, and fittings, 20%; process instruments and controls, 7%; pumps and compressors, 7%; electrical equipment and materials, 5%; structural supports, insulation and paint, 10% • basis - 100 for 1957-1959
  • 19. Chemical Engineering Plant Cost Index from 1950 to 2010 700 600 500 400 300 200 100 0 1950 1960 1970 1980 1990 2000 2010
  • 20. Table 7.5: The Basis for the Chemical Engineering Plant Cost Index Components of Index Weighting of Component (%) Equipment, Machinery and Supports: (a) Fabricated Equipment 37 (b) Process Machinery 14 (c) Pipe, Valves, and Fittings 20 (d) Process Instruments and Controls 7 (e) Pumps and Compressors 7 (f) Electrical Equipment and Materials 5 (g) Structural Supports, Insulation, Paint 10 100 61% of total Erection and Installation Labor 22 Buildings, Materials, and Labor 7 Engineering and Supervision 10 Total 100
  • 21. Example 2 • Cost of vessel in 1993 was 25,000, what is estimated cost today? Inow 551 Cnow C1993 25,000 I1993 359
  • 22. Example 3 - Accounting for Time and Size • 2 heat exchangers, 1 bought in 1990 and the other in 1995 for the same service A B Area = 70 m2 130 m2 Time= 1990 1995 Cost = 17 K 24 K I = 358 381
  • 23. Example 3 (cont’d) • What is the Cost of a 80 m2 Heat Exchanger Today ? • Must First Bring Costs to a Common Time 551 A = 70 C A 2010 17 26 358 551 B = 130 CB 2010 24 37 381
  • 24. Example 3 (cont’d) C KAn n log 37 log 26 26 K 70 n 0.57 n log 130 log 70 37 K 130 C 26 K n 0.57 2.31 A 70 0.57 C 2.31 80 28.1
  • 25. Total Cost of Plant • Purchased cost – equipment f.o.b. – f.o.b. – freight (free) on board • commonly used when shipping goods to indicate who pays loading and transportation costs, and/or the point at which the responsibility of the goods transfers from shipper to buyer • Installed cost – Often 3 to 8 times larger than purchased cost
  • 26. Installed Equipment Cost (Table 7.6) • 1. Direct Project Expenses – Equipment – Material for installation – Labor for installation • 2. Indirect Project Expenses – Freight, insurance, and taxes – Construction overhead – Contractor engineering expenses
  • 27. Installed Equipment Cost (cont’d) • Contingency and Fee – Contingency – Contractor fee • Auxiliary Facilities – Site development – Auxiliary buildings – Off-sites and utilities
  • 28. Equipment Costs • Purchased cost Cpo is typically estimated by an equation of form: o 2 log10 Cp K1 K 2 log10 A K3 log10 A – where Ki are a series of constants associated with the type of equipment being costed, and – A is the capacity (independent variable) of the unit • Cpo is the base condition cost (i.e., for carbon steel at atmospheric condition)
  • 29. Equipment Costs Heat Exchanger K1 K2 K3 Fixed tube, sheet, or U tube 4.3247 -0.303 0.1634 Floating Head 4.8306 -0.8509 0.3187 Bayonet 4.2768 -0.0495 0.1431 Kettle Reboiler 4.4646 -0.5277 0.3955 10000000 fixed tube sheet floating head bayonet kettle reboiler K values taken from the 1000000 CAPCOST® program cost, U.S. $ 100000 10000 100 1000 10000 exchanger area (sq ft) (capacity, A)
  • 31. Module Costing Technique • The bare module cost CBM is the sum of the direct and indirect costs associated with equipment purchase and installation. • The bare module cost CBM can be found from the expression: CBM = CP FBM = CP (B1 + B2FMFp) – CP is the purchased cost of the base condition (most common material, usually carbon steel, operating at ambient pressure) – FBM is a multiplicative factor called the bare module cost factor that adjusts for all of the previously discussed costs, as well as for specific materials of construction (FM) and for actual operating pressures (Fp). – B1 and B2 are factors that are dependent on equipment-type. – The superscript is used to denote base condition factor (i.e, carbon steel and ambient pressure operation).
  • 32. Pressure Factors • A pressure factor Fp,vessel for a vessel of diameter D and operating at pressure P (in units of bar) is based the ASME code for pressure vessels. • Assuming a maximum allowable carbon steel stress of 944 bar, a 90% weld efficiency, a minimum allowable vessel thickness of ¼", and a corrosion allowance of ⅛" P 1D 0.00315 2 850 0.6 P 1 Fp, vessel 0.0063 • For pressures below -0.5 barg, Fp,vessel = 1.25 • For all other process log F C C log P C3 log10 P 2 10 p 1 2 10 equipment,
  • 33. Module Factor Approach – Pressure Factors Figure 7.6 Pressure Factors for Carbon Steel Vessels
  • 34. Module Factor Approach – Pressure Factors
  • 35. Material Factors material FM . carbon steel 1.0 stainless steel clad 1.7 stainless steel 3.1 nickel clad 3.6 nickel 7.1 titanium clad 4.7 titanium 9.4
  • 36. Direct Project Expenses CDE = CP + CM + CL CDE = CP (1 + M)(1 + L) • Equipment f.o.b. cost CP – purchased cost of equipment at manufacturer's site (free on board) • Materials required for installation CM = M CP – includes all piping, insulation and fire proofing, foundations and structural supports, instrumentation and electrical, and painting associated with the equipment. • labor to install equipment & mat'l CL = L (CP + CM) = CP L (1 + M) – all labor associated with installing the equipment and materials
  • 37. Indirect Project Expenses CIDE = CFIT + CO + CE CIDE = CP (1 + M) ( FIT + L O + E) • Freight, insurance, taxes CFIT = FIT (C0 + CM) – includes all costs for shipping equipment and materials to the plant site • Construction overhead CO = O CL – includes fringe benefits, sick leave, vacation; labor burden such as social security and unemployment insurance, etc.; and salaries and overhead for supervisory personnel • Contractor engineering expense CE = E (CP + CM) – includes salaries and overhead for engineering, drafting, and project management personnel
  • 38. Bare Module Cost • Substitution and collection of like terms: CBM = CIDE + CDE CBM = CP (1 + M) (1 + L + FIT + L O + E) • Sum of Direct and Indirect costs for a process unit
  • 39. Contingency and Fee • A contingency factor covers unforeseen circumstances (15% for well understood systems) CCont = ContCBM = CP (1 + M) (1 + L + FIT + L O+ E Cont • Contractor Fee (typically assumed to be 3%) CFee = FeeCBM = CP (1 + M) (1 + L + FIT + L O+ E Fee
  • 40. Total Module Cost • Total cost for purchase and installation of a process unit, CTM CTM = CBM + CCont + CFee CTM = CP FBM + CP Cont + CP Fee CTM = CP (1 + M)(1 + L + FIT + L O+ E Fee + Cont)
  • 41. Bare Module Cost for nonbase conditions • Pressure Factors (FP) – calculated from expression specific to type of vessel (see Appendix A) • Materials of Construction Factors (FM) – simple mutiplicative factor based on relative cost of material to base case material – Carbon steel (base case) – Low-alloy steel (low/moderate) – Stainless steel, Aluminium and Copper and their alloys (moderate) – Titanium and Nickel and their alloys (high) CBM = CP FP FM = CP [FP FM (1+fP&I)+FBM -1-fP&I] where fP&I represents fraction of installation associated with piping and instrumentation
  • 42. Grass Roots Cost (new site) • Includes costs for site development, auxiliary buildings, and off-sites and utilities. Such facilities depend typically on materials of construction and/or operating pressure, and can range from 20 to 100% of the base module cost. A value of 50% is a good starting point to assume. CGR = CTM + 0.5 CBM,i summation is performed over all n process units in the design
  • 43. CAPCOST® • CAPCOST® is a Microsoft Excel program for estimating bare module, total module, and grass roots costs of complex chemical plants.
  • 44. Lang Factors • Table 7.7 • Use multiplier depending on type of plant to escalate equipment costs to installed costs • Flang = 4.74 Fluid processing plant = 3.63 Solid-Fluid processing plant = 3.10 Solid processing plant
  • 45. Lang Factors (cont’d) n CTM FLang C pi i 1 Total Module Cost Purchased Cost of Major Equipment From Preliminary PFD (Pumps, Compressors, vessels, etc.)