Capital-cost data for processing plants

TABLE 9-48 Capital-Cost Data for Processing Plants ... 

Capital-cost data for processing plants (1990) (Continued)... 

April 1990, pp. 138-175. In the method known as the seven-tenths rule, the cost-capacity data for process plants may be correlated by a logarithmic plot similar to the six-tentlis plot for equipment. Remer and Chai compiled exponents for a variety of processes and found that the exponents ranged from 0.6 to 0.8. When the data are used to obtain a capital cost for a different-size plant, the estimated capital must be for the same process. 

Order-of-Magnitude Estimates. Unit capital cost data (dollars per aimual ton of product) are occasionally reported for chemical plants. These data can be multiphed by a selected plant capacity to estimate a capital cost. This is, however, feasible only if the reference process, conditions, and capacity are similar. 

Capital cost estimates for chemical process plants are often based on an estimate of the purchase cost of the major equipment items required for the process, the other costs being estimated as factors of the equipment cost. The accuracy of this type of estimate will depend on what stage the design has reached at the time the estimate is made, and on the reliability of the data available on equipment costs. In the later stages of the project design, when detailed equipment specifications are available and firm quotations have been obtained, an accurate estimation of the capital cost of the project can be made. 

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. 

Ultimately, the final choice of the temperature, pressure, reactant ratio and conversion at which the reactor will operate depends on an assessment of the overall economics of the process. This will take into account the cost of the reactants, the cost of separating the products and the costs associated with any recycle streams. It should include all the various operating costs and capital costs of reactor and plant. In the course of making this economic assessment, a whole series of calculations of operating conditions, final conversion and reactor size may be performed with the aid of a computer, provided that the data are available. Each of these sets of conditions may be technically feasible, but the one chosen will be that which gives the maximum profitability for the project as a whole. 

Design data and other process information are obtained during the development stage. This information is used as the basis for carrying out the additional phases of the design project. A complete market analysis is made, and samples of the final product are sent to prospective customers to determine if the product is satisfactory and if there is a reasonable sales potential. Capital-cost estimates for the proposed plant are made. Probable returns on the required investment are determined, and a complete cost-and-profit analysis of the process is developed. 

In this chapter the various components that make up the capital cost of a plant and the components of the operating costs are discussed, and the techniques used for estimating reviewed briefly. Simple costing methods and some cost data are given, which can be used to make preliminary estimates of capital and operating costs at the flow-sheet stage. They can also be used to cost out alternative processing schemes and equipment. 

The value of the index n is traditionally taken as 0.6 the well-known six-tenths rule. This value can be used to get a rough estimate of the capital cost if there are not sufficient data available to calculate the index for the particular process. Estrup (1972) gives a critical review of the six-tenths rule. Equation 6.2 is only an approximation, and if sufficient data are available the relationship is best represented on a log-log plot. Garrett (1989) has published capital cost-plant capacity curves for over 250 processes. 

The cost data base used in the capital estimates for example, cost estimaters of engineering firms which have build chemical process plants and refineries have available an extensive data bank from their experience. 

Accountants in industrial plants maintain records on actual expenditures for labor, materials, power, etc., and the maintenance and interpretation of these records is known as actual or post-mortem cost accounting. From these data, it is possible to make accurate predictions of the future cost of the particular plant or process. These predictions are very valuable for determining future capital requirements and income, and represent an important type of cost accounting known as standard cost accounting. Deviations of standard costs from actual costs are designated as variances. 

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