Capital cost Chemical Engineering

T.J. Ward, Predesign Estimating of Capital Costs , Chemical Engineering, 17 September, pp.1 21-1 24 (1984). 

Vataviik, W. M., and R. B. Neveril, Factors for Estimating Capital and Operating Costs, Chemical Engineering, November 3, 1980, pp. 157-162. Vogel, G. A. andE. J. Martin, Hazardous Waste Incineration, Chemical Engineering, September 5, 1983, pp. 143-146 (part 1). 

In the incessant scramble to reduce capital and operating costs, chemical engineers adapted a related technique for removing benzene from benzene concentrate. For years, absorption, a gas/liquid extraction process, has been used for separations in refinery gas plants and natural gas plants. It only took a technique for using the special absorbents, the same ones used in solvent extraction, to reduce the complexity of the equipment and the processing costs. See Figure 2-5)... 

Vatavuk, W. M., and R. B. Neveril, Factors for Estimating Capital and Operating Costs, Chemical Engineering, November 3, 1980, pp. 157-162. 

Producers have developed specific cell configurations to optimise electricity consumption, cell capital, and operating costs. Pacific Engineering Corp., Kerr-McGee Chemical Corp., Chedde Pechiney, Cardox Corp., Electrochemie Turgi, American Potash and Chemical, and I. G. Earbenindustrie each has a unique cell design. 

Vogel, G. A. and E. J. Martin, Estimating Capital Costs of Facility Components, Chemical Engineering, (November 28, 1983) pp. 87-90. 

The chemical and petrochemical industries are highly capital intensive and this has two important implications for the plant designer. Before the expenditure for any plant is approved, a discounted cash flow (DCF) return on capital invested is projected (Section 9.1). The capital cost of the plant is a key factor in deciding whether the DCF return is above or below the cut-off value used by a company to judge the viability of projects. Thus, there is always strong pressure on the materials engineer not to overspecify the materials of construction. 

The rate of a chemical reaction is influenced by pressure, temperature, concentration of reactants, kinetic factors such as agitation, and the presence of a catalyst. Since the viability of a plant depends not only on reaction efficiencies but also on the capital cost factor and the cost of maintenance, it may be more economic to alter a process variable in order that a less expensive material of construction can be used. The flexibility which the process designer has in this respect depends on how sensitive the reaction efficiency is to a change in the variable of concern to the materials engineer. 

Gerrard, M. (2000) A Guide to Capital Cost Estimating, 4th edn, Institute of Chemical Engineers, Rugby. 

IChemE (1988) A New Guide to Capital Cost Estimation 3rd edn (Institution of Chemical Engineers, London). JACOBS, J. K. (1965) Hydrocarbon Proc. 44 (June) 122. How to select and specify process pumps. 

The contribution of each of these items to the total capital cost is calculated by multiplying the total purchased equipment by an appropriate factor. As with the basic Lang factor , these factors are best derived from historical cost data for similar processes. Typical values for the factors are given in several references, Happle and Jordan (1975) and Garrett (1989). Guthrie (1974), splits the costs into the material and labour portions and gives separate factors for each. In a booklet published by the Institution of Chemical Engineers, IChemE (1988), the factors are shown as a function of plant size and complexity. 

For small projects, and for simple choices between alternative processing schemes and equipment, the decisions can usually be made by comparing the capital and operating costs. More sophisticated evaluation techniques and economic criteria are needed when decisions have to be made between large, complex projects, particularly when the projects differ widely in scope, time scale and type of product. Some of the more commonly used techniques of economic evaluation and the criteria used to judge economic performance are outlined in this section. For a full discussion of the subject one of the many specialist texts that have been published should be consulted Brennan (1998), Chauvel et al. (2003) and Vale-Riestra (1983). The booklet published by the Institution of Chemical Engineers, Allen (1991), is particularly recommended to students. 

IChemE (2000) Guide to Capital Cost Estimation, 4th edn (Institution of Chemical Engineers, London). 

Figure 17.8 Energy and capital cost targets can be combined to optimize prior to design (From Smith R and Linnhoff B, 1988, ChERD,66 195 reproduced by permission of the Institution of Chemical Engineers.).

Source of Cost Data Guthrie, K.M. Capital Cost Estimating, Chemical Engineering, Mar. 24, 1969, p. 114 (see Appendix B). 

Nichols, W.T. Next Time Give the Boss a Precise Capital Cost Estimate, Chemical Engineering, June, 1951,p. 248. 

Guthrie,K.M. Capital and Operating Costs for 54 Chemical Processes, Chemical Engineering, June 15, 1970p,140. 

The data in this section are in my opinion the best available. They were developed from data presented by Kenneth M. Guthrie and first appeared in the March 24, 1969 and Jan. 13, 1969, issues of Chemical Engineering. I am very indebted to Mr. Guthrie and Chemical Engineering for allowing me to reproduce this material. All these data are based on mid 1968 costs. Examples 9-6, 9-7, and 9-8, along with the capital cost estimation of a 150,000,000 lb/yr polystrene plant, show how to use the figures and tables. 

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