Purchased equipment cost

The CE Plant Cost Index (7) is also pubHshed monthly in the Chemical Engineering]omaci A. Index values are given for various categories of equipment, installation, labor, building, and supervision, as well as a composite plant cost index. The composite index for complete plant costs, tabulated in Table 1, is frequentiy used for the translation of purchased equipment costs, even though the equipment component of the index would be better. 

Category Eactor Estimates. Various capital categories can be related to total equipment costs by factors, reported as percentages of equipment cost. Both purchased equipment costs, including pumps, tanks (qv), and instmments and deHvered equipment costs, excluding instmments, but including some off-sites, have been used in this approach (1,2). 

The ratio of the fixed capital investment to the purchased equipment cost (Lang factor) is taken as 4.83. 

The ISBL costs can be roughly estimated by multiplying the sum of the purchased-equipment costs by a certain factor, the so-called Lang factor ... 

Installation cost as a percentage of the purchased-equipment costs (after Peters and Timmermans, 1980)... 

Corrective indexes are needed to adapt old prices to the current or future situation. The purchased equipment cost in year i, C, , can be evaluated based on the purchased equipment cost in one of the former year r, Cp.r using the following expression ... 

The factorial method of cost estimation is often attributed to Lang (1948). The fixed capital cost of the project is given as a function of the total purchase equipment cost by the equation ... 

Purchased equipment costs for various types of heat exchangers. 

C HE Purchased equipment cost, n Number of years, depreciation Years... 

Example 5 Fixed Capital Investment Using the Lang, Hand, and Wroth Methods The following is a list of the purchased equipment costs for a proposed processing unit ... 

Lang method The Lang factor for a fluid processing unit starting with purchased equipment costs is 5.0. Therefore, fixed capital investment is 2,820,000 X 5.0 X 1.035 X 1.040 = 15,177,000. 

Hand method The Hand method begins with purchased equipment costs, and factors are applied from Table 9-11. 

Equipment Purchased equipment cost Hand factor Purchased equipment installed cost... 

The asterisk on the receivers and accumulators indicates that if these vessels are pressure vessels, a factor of 4.0 should be used instead of 2.5. The total purchased equipment installed is 9,538,000 for non-pressure vessels and the delivered cost is 10,015,000. Therefore, the fixed capital investment installed would be 10,015,000 x 1.035 x 1.040 = 10,780,000. Using pressure vessels increases the total purchased equipment cost 667,000 therefore, the fixed capital investment for this case including inflation would be 10,780,000 x 1.05 x 1.035 X 1.04 = 11,534,000. 

Equipment at high or low temperatures is insulated to conserve energy, to keep process conditions from fluctuating with ambient conditions, and to protect personnel who have occasion to approach the equipment. A measure of protection of the equipment metal against atmospheric corrosion also may be a benefit. Application of insulation is a skilled trade. Its cost runs to 8-9% of purchased equipment cost. 

Once the purchased equipment costs are known, the capital investment can be calculated by summing these results and using ratio factors for installation, piping, buildings, instrumentation, electric equipment, thermal isolation, indirect expenses, etc. (Chauvel, 2000). 

To the basic purchased equipment cost (including delivery to the site) of 100 are added each of the subsequent factors to make up the final total. The contractor s fee is necessary if the plant design and construction work is given to a contractor to undertake (which is very often the case, because the company needing the plant is unlikely to have the necessary engineers on its payroll). 

For the alkylation unit, purchased-equipment costs may be estimated using the equipment-specification information of Table 1 and the cost data presented in Chaps. 14 through 16 of this text. Table 2 presents these costs updated to January 1, 1990. The required fixed-capital investment for the nonbiodegradable detergent manufacturing process may be estimated from the total purchased-equipment cost using the equipment-cost ratio method outlined in Table 17 of Chap. 6. The total purchased-equipment cost is, presented in... 

Estimated purchased-equipment cost for alkylation unitf... 

Summary of purchased-equipment cost for complete process unit... 

Example 1 Estimation of fixed-capital investment using ranges of process-plant component costs. Make a study estimate of the fixed-capital investment for a process plant if the purchased-equipment cost is 100,000. Use the ranges of process-plant component cost outlined in Table 4 for a process plant handling both solids and fluids with a high degree of automatic controls and essentially outdoor operation. 

Purchased-equipment costs for vessels, tanks, and process- and materials-handling equipment can often be estimated on the basis of weight. The fact that a wide variety of types of equipment have about the same cost per unit weight is quite useful, particularly when other cost data are not available. Generally, the cost data generated by this method are sufficiently reliable to permit order-of-magnitude estimates. 

The installation of equipment involves costs for labor, foundations, supports, platforms, construction expenses, and other factors directly related to the erection of purchased equipment. Table 6 presents the general range of installation cost as a percentage of the purchased-equipment cost for various types of equipment. 

Analyses of the total installed costs of equipment in a number of typical chemical plants indicate that the cost of the purchased equipment varies from 65 to 80 percent of the installed cost depending upon the complexity of the equipment and the type of plant in which the equipment is installed. Installation costs for equipment, therefore, are estimated to vary from 25 to 55 percent of the purchased-equipment cost. 

The total cost for the labor and materials required for insulating equipment and piping in ordinary chemical plants is approximately 8 to 9 percent of the purchased-equipment cost. This is equivalent to approximately 2 percent of the total capital investment. 

The cost for piping covers labor, valves, fittings, pipe, supports, and othc rdtems involved in the complete erection of all piping used directly in the process. This includes raw-material, intermediate-product, finished-product, steam, water, air, sewer, and other process piping. Since process-plant piping can run as high as 80 percent of purchased-equipment cost or 20 percent of tied-capital investment, it is understandable that accuracy of the entire estimate can be seriously affected by the improper application of estimation techniques to this one component. 

Cost of buildings including services based on purchased-equipment cost... 

Costs for fencing, grading, roads, sidewalks, railroad sidings, landscaping, and similar items constitute the portion of the capital investment included in yard improvements. Yard-improvements cost for chemical plants approximates 10 to 20 percent of the purchased-equipment cost. This is equivalent to approximately 2 to 5 percent of the fixed-capital investment. Table 12 shows the range in variation for various components of yard improvements in terms of the fixed-capital investment. 

The total cost for service facilities in chemical plants generally ranges from 30 to 80 percent of the purchased-equipment cost with 55 percent representing... 

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