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Estimation of Cost Capital - Coggle Diagram
Estimation of Cost Capital
Cost Capital
Cost associated with construction of new plant or modification to an existing plant
Type of Capital Cost Estimate
Order of Magnitude Estimate
+40%, -20%
BFD, Process Modification
Study Estimate / Major Equipment
+30, -20%
PFD, Cost Chart
Preliminary Design (Scope) Estimate
+25%, -15%
PFD, vessel sketch, equipment diagrams
Definitive (Project Control) Estimate
+15%, -7%
PFD, P&ID, all vessel sketches, equipment diagrams, preliminary isometrics
Detailed (Firm or Contractors) Estimate
+6%, -4%
Everything included (ready to go to construction phase)
Estimating Purchased Equipment Costs
Vendor Quote
Most accurate (based on specific information, requires significant engineering)
Use previous cost on similar equipment and scale for time and size
Reasonably accurate (Beware of large extrapolation, beware of foreign currency)
Use cost estimating charts and scale for time
Less accurate, convenient
Effect of Time
Time increases
Cost Increases (Inflation)
Inflation is measured by cost indexes
Chemical engineering Plant Cost Indexes(CEPCI)
Marshall and Swift Process Industry Index
Numbers based on 'basket of goods' typical for construction of chemical plants
Table 7.5
Equation for TIme Effect
C = Cost
I = Value of cost index
1,2 = Represents points in time at which costs required or known and index values known
Effect of Size
n = 0.4 0.8 typically
n 0.6 and we refer to eq(7.1) as the (6/10)'s rule
Assume all equipment have n= 0.6 in a process unit and scale up using this method for whole processes
Order of magnitude estimate
Equation 7.1
Equation 7.2
Total Cost of Plant
Purchased cost
Equipment F.O.B
Installed cost
Often 3 to 8 times larger than purchased cost
Installed Cost of equipment
Direct Project Expenses
Equipment
Material for installation
Labor for installation
Indirect Project Expenses
Freight, insurance, and taxes
-Construction overhead
-Contractor engineering expenses
Contingency and Fee
Contigency
Contractor fee
Auxiliary Facilities
Site development
Auxiliary buildings
Off-sites and utilities
Lang Factors
Use multiplier depending on type of plant to escalate equipment costs to installed cost
F lang
4.74 - Fluid processing plant
3.63 - Solid Fluid processing plant
3.10 - Solid processing plant
Lang Factors
Module Factor Approach
Direct, indirect, contingency, and fees are expressed as functions (multipliers) of purchased equipment cost at base conditions (1 bar and CS)
Each equipment type has different multipliers
Module Factor
FBM = B1 + B2FpFM
Fp = pressure factor (= 1 for 1 bar)
FM = material of construction factor (=1 for CS)
Pressure Factors
Pressure Factors
Illustrative Example
Compare Costs for shell and tube heat exhanger in 2011 with an area = 100 meter square for
Carbon Steel at 1 bar
Carbon Steel at 100 bar
Stainless Steel at 1 bar
Stainless Steel at 100 bar
Effect of Materials of Construction and Pressure on Bare Module Cost (all costs in $1000)
Bare-Module and Total-Module Costs
BM – Previously Covered
TM – Includes Contingency and Fees at 15%
and 3% of BM
Grass-Roots Costs
GR – grass-roots cost includes costs for auxiliary facilities
Use base BM costs in GR cost (1 atm and CS) since auxiliary facilities should not depend on pressure or M.O.C.
Materials of Construction
Very important
Table 7.9 – rough guide
Perry’s – good source
Capcost
Calculates costs based on input
CEPCI – use current value of 600 or latest from Chemical Engineering
Program automatically assigns equipment numbers
