Equipment Cost Correlations

Costs are usually correlated in terms of a base cost multiplied by a ratio of sizes raised to the power n . Costj = Cost f (size2/sizefgf) . The cost is usually the FOB cost although sometimes it is the field erected cost. The size should be a cost dependent parameter that is characteristic of the specific type of equipment. The size parameter that provides the least accurate estimate is the w or capacity. In this book, sometimes several different parameters are given use the size parameter flow or capacity as a last resort. 

The guideline FOB cost is in US for a value of the Chemical Engineering Index (1957-59 = 100), CEPCI Index = 1000. The value of the CEPCI Index for the year 2003 was 395.6 so that the costs reported here are more than double the value in 2003. 

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For preliminary evaluation (Gate 1 in Table 16.1), correlations for complete processes scaled up for capacity and for time are commonly used. For a conceptual design (Gate 2), FOB equipment cost correlations based on flow rate are often used and scaled up to BM cost based on L -f M factors. For a preliminary engineering design (Gate 3), the equipment is sized more accurately based on simple rules of thumb, the cost is estimated from FOB cost correlations related to equipment size and scaled up to BM cost based on L + M factors. The process and FOB cost correlations are all of the form... 

Equipment Cost Correlations Based on Flow Rate and BM Factor Method... 

Equipment Costs. Equipment costs include the purchased cost of process and materials handling equipment, storage faciUties, waste treatment equipment, stmctures, and site service faciUties. Installation costs such as insulation, piping, painting and finishing, foundations, process stmctures, instmmentation, and electrical service connections are estimated or factored separately. Actual quoted prices from suppHers are the best data, but these are not usually available when estimates are made. The quick, inexpensive cost estimates are based largely on personal cost files, internal company cost data, or pubUshed cost correlations. 

Exponential cost correlations have been developed for individual items of equipment. Care must be taken in determining whether the cost of the eqmpment has been expressed as free on Board (FOB), delivered (DEL), or installed (INST), as this is not always clearly stated. In many cases the cost must be correlated in terms of parameters related to capacity such as surface area for heat exchangers or power for grinding equipment. There are four main sources of error in such cost correlations ... 

As an example of this technique, the estimated equipment costs for a large coal gasification project have been correlated and programmed for a computer. Thus, it is vei7 easy to get the cost of any one piece, or of many pieces of equipment, for a coal gasification or hydrocarbon processing project once the specification sheets are completed. 

Cost Indices In some cases, the cost of a piece of equipment is available from a previous study, and it is desirable to evaluate its present cost. Because of inflation and other economic changes, it is necessary to correlate equipment cost as a function of time. In this regard, cost indices are useful tools. A cost index is an indicator of how equipment cost varies over time. The ratio of cost indices at two different times provides an estimate for the extent of equipment-cost inflation between these two times. Hence,... 

The volume of the closest standard stirred tanks are 1.0 and 1.6 m while a tray drier of 0.3 m can be assumed standard. The total volume of the equipment is now 3.9 ml Thus, adding one reactor for stage I the total volume decreases from 4.6 m to 3.90 m. Depending on cost correlations for all units the economics of both arrangements can be assessed. 

Table 2.1 Typical equipment capacity delivered capital cost correlations.

Empirical cost correlations for equipment are often of the following form ... 

Charts, correlations, and tables in the sources cited earlier relate capital costs to various parameters characteristic of the equipment to be evaluated. Table B.2 lists typical parameters used to correlate equipment costs for common types of process equipment. Figure B.3 is an example of such correlations for the cost of heat exchangers as a function of exchanger area. These forms of cost curves generally appear as nearly straight lines on log-log plots, indicating a power-law relationship between capital cost and capacity, with exponents typically ranging from 0.5 to 0.8. 

All eleven references in this category relate directly to Section 6.1, the Economic Evaluation of this project. They contain capital costing methods, cost correlations, typical plant and equipment costs, and economic indicators to account for cost changes with time. 

The other references in this section all contain useful nomographs and correlations for the estimation of capital and equipment costs. 

Cost correlations provide a convenient method of estimating the capital cost of major items of equipment. Correlations are usually provided graphically as plots (log-log coordinates) of capital cost of a particular item versus capacity (e.g. volume, surface area, throughput, or power rating). Even at zero capacity, there is some cost (e.g. overheads) associated with the equipment. The cost (C) increases to infinity (i.e. slope of the curve = I), at which point it is more economic to use multiple units of the same size. For an intermediate capacity (Q) range,... 

On the other hand, efficient use of resource also should be discussed using physical units of measures as well as usage of energy. However the equipment materials such as basic metals are less substitutable than energy because each metal has inherent values. Since there is no common physical unit of measure to evaluate the material usage, the investment cost for each piece of equipment is used as a substitute in this paper. Consequently, the total investment cost should be minimized from the standpoint of resource conservation. The investment cost of each piece of equipment is correlated with the size of the equipment based on the logarithmic relationship. 

If we know the cost of a piece-of-equipment at one capacity and the capacity exponent, n, then we can calculate its cost at another capacity. We can find cost data in References [10], [13], [15], [16], and [36]. More recent cost data are contained in References [4], [30], [31], and [37]. Table 2.9 contains costs and capacity exponents of some common equipment. The correlation range given in Table 2.9 gives the size limits for each piece-of-equipment. You should not extrapolate Equation 2.6 too far beyond the limits specified. For example, from Table 2.9, the cost of a... 

There is an abundance of equipment cost data and cost correlations in the open literature, but much of it is of very poor quality. The relationship between size and cost given in equations 6.6 and 6.7 can also be used for equipment if a suitable size parameter is used. If the size range spans several orders of magnitude, then log-log plots usually give a better representation of the relationship than simple equations. 

Some of the most reliable information on equipment costs can be found in the professional cost engineering literature. Correlations based on recent data are occasionally published in Cost Engineering, which is the journal of the Association for the Advancement of Cost Engineering International (AACE International). AACE... 

The process simulators include options to estimate the size of the equipment for each process step. Historic equipment cost data have been correlated so that the equipment can be sized and cost estimated. 

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