Costs major equipment

Direct Material Costs — Major Equipment Motor — Induction Type Steam Turbine Driven Air Blower Motor Driven Air Blower One Stage Expander Driven Air Blower Two Stage Expander Driven Air Blower... 

Pikulik and Diaz (1977) give a method of costing major equipment items from cost data on the basic components shells, heads, nozzles, and internal fittings. Purohit (1983) gives a detailed procedure for estimating the cost of heat exchangers. 

Early in the life of a project, information has not been developed to allow definitive cost estimates based on material takeoff and vendor quotes for equipment. Therefore, it is necessary to estimate the cost of a facility using shortcut methods. The first step is to develop or check flow-sheets, major equipment sizes, and specification sheets as described in earlier chapters. From the equipment specification sheets, the cost of each piece of equipment is estimated, using techniques discussed later. Once the major equipment cost has been estimated, the total battery limit plant cost can he quickly estimated using factors developed on a similar project. 

Once the sizes of the major equipment items are known, there are several ways to get the cost of each. By far the most accurate is to get quotations from vendors. This is difficult to do in the early stages of a project because many equipment details are not known. Also, the time between making the preliminary study and purchasing the equipment is so long that the quotation ages, and vendors cannot afford to prepare quotations on every preliminary study. However, many vendors are very cooperative in providing verbal prices or " estimating quotations. Often, the vendor is the only source for accurate cost information. 

Once the cost of each piece of major equipment is known, it must be adjusted by construction cost indexes. Due to inflation and changing competitive situations, the price of equipment changes from year to year (Reference 26). Fortunately, there are several indexes that help in estimating today s costs based on historical data. Some of these indexes are Nelson Refinery Construction Cost... 

Item 1 is the major factor in choosing continuous systems rather than batch systems for improved SCP production. Economics are improved by lower capital cost for the bioreactor (a conomica major equipment cost, see Section 4.10) and by a higher output rate. Item 3 leads to greater control of product quality. 

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. 

Ce = the total delivered cost of all the major equipment items storage tanks, reaction vessels, columns, heat exchangers, etc., fi = the Lang factor , which depends on the type of process. 

Estimate the purchase cost of the major equipment items. Use Figures 6.3 to 6.6 and Tables 6.2 and 6.3, or the general literature. 

Total purchase cost of major equipment items (PCE)... 

Major equipment estimates based on a more detailed given flowsheet that includes all of the equipment of significance roughly sized with approximate costs. Optimization using process flow simulators (refer to Chapter 15) can be employed. Figure B.2 illustrates a typical analysis for a tank. Refer to Brown (2000) for additional details. 

Labor costs associated with major equipment repairs or replacement are not included. 

The general background of process design, flowsheets, and process control is reviewed in the introductory chapters. The major kinds of operations and equipment are treated in individual chapters. Information about peripheral and less widely employed equipment in chemical plants is concentrated in Chapter 19 with references to key works of as much practical value as possible. Because decisions often must be based on economic grounds, Chapter 20, on costs of equipment, rounds out the book. Appendixes provide examples of equipment rating forms and manufacturers questionnaires. 

The fixed capital cost is estimated by first assessing the purchase cost of the major equipment items listed in Table 4.1. These costs are calculated in Appendix E, and are shown in Table 6.1. 

There is, however, an important economic factor when analysing for double jeopardy Sometimes cost considerations by the end user dictate being less conservative. However, if there is a potential that double jeopardy failure can lead to loss of life or major equipment damage, it is wise to do the capacity calculations anyway. 

Major equipment factor estimates. Major equipment factor estimates are made by applying multipliers to the costs of all major equipment required for the plant or process facility. Different factors are applicable to different types of equipment, such as pumps, heat exchangers, and pressure vessels. Equipment size also has an effect on the factors. 

Major equipment modular material cost method. The modular cost method was first established by Guthrie [2], This same methodology is applied here, but with updated and added cost factoring. 

The base cost of a major equipment module is herein defined as the specific equipment item fabrication cost, such as that of a fractionation column, a field-erected furnace, a shell/tube heat exchanger, or process pump. Each of these items will be given a fabrication cost. A figure cost curve will be presented for each major equipment item, and will have cost of the item vs. a key process variable. These key process variables could be the furnace absorbed-heat duty, the shell/tube exchanger tube surface area, and the pump discharge pressure/gpm product number. 

Determining the value of these key variables will fix a fabrication cost for the particular major equipment item. Simply refer to the particular major equipment item type in this chapter and read the cost curve at the value of the key variable. 

One more step is necessary to fix a major equipment item modular material cost. This involves the particular selection of the item materials, the operating pressure, and the equipment type. Adding all three of... 

Indirect cost. Indirect cost includes a large list of varied supporting equipment, utilities, and land for the modular major equipment cost method proposed herein. These items are commonly called offsites, which include cost of such items as roadways, land, buildings, warehouses, spare parts, maintenance shops, and electric power and water utilities. In addition to offsites, the indirect cost also includes the field-erection equipment, such as erection cranes, temporary construction buildings, welding supplies, and trucks. All of these items are necessities for the major equipment modules. 

Indirect cost normally ranges from 20 to 35% of material plus labor of the modular major equipment cost. In most cost analysis of complete processing units, the indirect cost is very significant. Indirect cost factors should therefore always be a part of the summary sheet s total cost analysis and never overlooked. For most refinery, chemical plant, and oil- and gas-treating facilities, a 25% indirect cost factor is a well-accepted number in the industry, worldwide. The 25% factor of the material plus labor is therefore advised and is used in this chapter. 

The escalation index is simply the yearly increase of the particular major equipment item, referred to Chemical Engineerings published index. The equipment cost index is 438 as of January 2001. If you are calculating an equipment cost for, say, 2007, and this same referenced cost index for that year is 450, then the cost index is 450/438, or 1.027. These yearly equipment cost index numbers, 438 and 450, come from Chemical Engineering s monthly equipment cost index. Of course, 450 is an assumed index number, since the 2007 index has not been published as of this writing. 

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