Nelson-Farrar Cost Indices

YEAR MATERIAL EQUIP. LABOUR INDEX NE EACTOR 

Location factors developed through US DoE Studies relative to US Gulf. 

Climate/Terrain Benign difficult difficult extreme 

Examples US Gulf Urban Australia Remote FE Offshore 

---

The Nelson-Farrar cost index is published in the first issue of each month of Oil and Gas Journal, and not considered to be suitable for refineries and process units that are older than five years. 

Official website of Oil and Gas Journal containing the Nelson-Farrar cost index. 

Construction costs in the petroleum industry are the basis of the Nelson-Farrar construction index. The total index percentages are weighted as follows skilled labor, 30 common labor, 30 iron and steel, 20 building materials, 8 and miscellaneous equipment, 12. An index value of 100 is used for the base year of... 

Selecting the right escalation index is often difficult, as different published indices can appear to be applicable. For instance, when escalating the capital cost of a refinery hydrosulfurization unit, should one use the CEPCI, the Nelson-Farrar Refinery Index, or a combination of the two indexes The decision often rests as much on engineering judgment as it does on hard data. 

Table 9-42 presents information on some cost indices for the United States. Engineering News-Record updates its construction-cost index in March, June, September, and December. The Oil and Gas Journal gives the Nelson-Farrar refinery indices in the first issue of each quarter. The Chemical Engineering plant-cost index and Marshall and Swift equipment-cost index are given in each issue of the pubhcation Chemical Engineering. Derivation of the base values is referred to in the respective publications. 

Nelson-Farrar index of operating labor cost (wages plus benefits) 1955- 1999 (1956 = 100). 

Marshall Ml Swift InsblbJkagiljpaMiit indexes, 1926 = 100 Eng. ntfews-Record construction index Nelson-Farrar refinery construction Chemical engineering plant cost index... 

For use with process-equipment estimates and chemical-plant investment estimates, the Marshall and Swift equipment cost indexes and the Chemical Engineering plant cost indexes are recommended. These two cost indexes give very similar results, while the Engineering News-Record construction cost index, relative with time, has increased much more rapidly than the other two because it does not include a productivity improvement factor. Similarly, the Nelson-Farrar refinery construction index has shown a very large increase with time and should be used with caution and only for refinery construction. 

---