Costing of Pipelines - 1

1. Introduction • The selection of the optimal pipeline route, diameter, material, wall thickness, pump station location, pump units and operational equipment or facilities is typically the result of economic analysis and investment capital evaluation of the most reasonable scenarios developed through the design phase. • Typically, even before the detailed design of a pipeline system has begun, an order-ofmagnitude cost study will be performed, with the goal of determining the feasibility of continuing to invest time and capital in the design phase of the project. • For a typical cross country pipeline project, the cost of pipe and its associated construction and installation costs can be as much as 80% of the capital investment , therefore , the selection of the pipe, with regard to the type of material, size etc. is very important. • A piping works engineer requires not only wide engineering knowledge – not necessarily in depth , but certainly an understanding but he must also have an understanding of engineering economics, costs of metallurgical, methods of pipe fabrication, erection and sufficient knowledge of mechanical, civil, electrical and instrumentation engineering to discuss the requirements. 2. Direct and Indirect Costs Associated with Piping • The direct cost of piping is related to the purchase and installation of piping along with accessories. i.e. it deals with raw materials, labour, energy etc. • Indirect cost includes: • Design and engineering cost, which cover the cost of design and cost of “engineering” of the piping system, purchasing, procurement and construction supervision. • Contractor‘s fees (Technology Fee)

and thus an optimum size must exist). the evaluation would be done by a specialist group. while those in the second must be based on an economical pipe size ( the smaller the pipe . therefore. some means of comparing the economic performance of piping is needed. must have some means of determining which lines justify careful cost analysis. Economic Evaluation of the Piping System • As the purpose of investing money in modern piping system is to earn money. • Making major investment decisions in the face of uncertainties that will undoubtedly exist about plant performance. complex piping systems. • For a small piping system . Paradoxically. however. it is uneconomical to make economic studies on each process line for a proposed plant. costs.• Contingency allowance. 3. 4. . More sophisticated evaluation techniques and economic criteria are needed when decisions have to be made between large. design errors etc. this is an allowance to cover for unforeseen circumstances ( labour disputes. time scale. particularly when the piping systems differ widely in scope. the decisions can usually be made by comparing the capital and operating costs. the less the pipe costs but the higher the pumping costs.). is a difficult and complex task (if not an impossible task) and in a large design organisation. etc. The designer. and for simple choices between alternative processing schemes . Economics of Pipe Diameter – Concept • The sizing of process lines can be divided into two categories Lines which do not contain pumping equipment Lines which contain pumps or compressors Lines in the first group are sized on the basis of available pressure drop. the market Government policy and the world economic situation.

on the other hand. But will the next smaller size be more economical? The only manner in which this can be determined definitely is by careful economic analysis. 20 nos. 6. If.1 Elbow 2" size. the possible savings are substantial. it is better to select the conservative size without further use of valuable time. Costing The following example will illustrate the concept of the inch-meter and the inch-dia: Q. of elbows = 2 x 2 x 20 = 80 inch dia. are to be fitted in a pipeline. Piping work progress monitoring d. then further detailed study is indicated. however. 5. Manpower planning c. of weld joints x no. Dividing the Cost of the Pipe Work The costs of process industry pipe work are usually sub-divided as below: .The designer can select a conservative line size which will definitely fulfill the requirements. is not far from the cost in the man-hours required to make the study.. If the possible saving . Q. Inch Meter and Inch Diameter Concept Purpose: The purpose of inch meter and inch diameter is : a. 2 Find out the inch meter for 20 m pipeline of 2" size Ans: Inch meter = Pipe size in inches x length in m = 2" x 20 = 40 inch meter Note : Inch meter will be more relevant in case of yard piping whereas inch dia will be more relevant in case of plant piping. To find out piping erection load b. Find out the inch dia? Ans: Inch dia : size x no.

Materials: The cost of all bought out materials . 2. Erection: The cost of erecting on-site fabricated pipe work and pressure testing. off-site fabrication. valves.3) ft/s Steam or gas line 20 d ft/s Pressure drop available (Ib/in2) / 100 ft 2. analysis and detailing. Suggested Steam Pipe Velocities in Pipe Connecting Steam Turbines SERVICE . Piping design and engineering: The cost of design work associated with the pipe work including layout studies . a velocity in excess of 20 ft/s should never be specified in order to avoid erosion of the pipe. pipe flanges. Fabrication: The cost of site fabrication . i. etc.4 0. 4. scheming . 7. done in a shop away and adjacent to site.0 Remark 0.condensing TYPICAL RANGE -ft/s 100 .STEAM Inlet to turbine Exhaust. expansion units.200 400 – 500 . fittings. This includes preliminaries. Economic Fluid Velocity (ft/s) Pipe diameter d (in) Pump discharge pipe (d/3 + 5) ft/s Pump suction pipe (d/6 + 1. 3.e. non-condensing Exhaust .1.150 175 . variation orders and error rectification if any. On suction lines to the pump.5 For liquids. the pressure drop should always be less than 50% of the total head developed by the pump.

11 4.00 9. material list etc.84 1. A-53. Relative Economics of Various Materials of Construction S.). Supports . 1 Material Carbon steel (C.No.20 % +/.S. welded galvanised Wrought iron.10 % Basis Based on %age of total plant cost Based on completed P and I’s etc. galvanised Unplasticised polyvinyl chloride Carbon steel. seamless Carbon steel (C. weld Flanged Flanged Welded 0. Fabrication 2. Final P and I.8. 1 2 3 Stage Preliminary First control Second control Accuracy +/. Fabrication / Welding 3.S. lead lined Carbon steel. drawings.). Fabrication Cost Estimation The contents of fabrication cost estimation comprise the following: 1. Material Estimation There are three main topics of pipe work estimation as mentioned below: S.79 4. all pipe work details. 10.61 1.00 Factor 2 3 4 5 6 7 Screwed Screwed Sock.76 15.25% +/. A-53. PVC lined Stainless steel Connection Welded 1.No. Welding 4.

per inch dia MS: Rs. tools. Rates for Fabrication and Erection The schedule of rates under the fabrication and erection work are established in “man hours” which should be representative of the gang time to complete the operation. tackle and consumables. c) PVC Piping: Rs. d) Cu Piping: Rs. bend etc. . Erection 2. Typical rates for various piping materials are enclosed for reference. Typical Rates for Fabrication. 60/. B and C class piping: Rs.per inch dia per metre length. The rates shall be included or excluded. 4500/. 100/. b) SS 304 piping ( Sch 5): Rs. Supports 3. 13. tackles and overheads.per MT. tools. The type of rate will depend on the client and contractor relationship on the basis of the contractor’s tenders.per inch dia Copper: Rs. Erection and Testing of Pipelines for Costing with Example a) Mild steel (MS).per inch dia f) Fabrication and erection of MS supports= Rs.per inch dia metre. 90/. Erection Cost Estimation The contents of fabrication cost estimation comprise the following: 1. e) Pipe fitting reducer. Testing of completed pipelines 12. These include labour.11. SS 304: Rs.per meter length.45/. 125/.140/. consumables. allowances for construction plant.per inch dia per metre length. 45/.

00 Factors SS Condensor tube Copper Condensor tube Rs/kg Rs/kg % % % Rs/kg Rs/kg 1.09 5.37 16.240/. SS 304 piping : 2850 inch mtr 3. PVC piping : 285 inch mtr 4.20 19.00 30.000/Typically the quantum of pipe fabrication. MS “B” and “C” class piping : 12450 inch mtr 2.62 8.36.79 40.00 1.50 140.19 .(Considering 4" dia) Q. Find out the labour cost for making a MS reducer of 2" x 4" size? Ans: MS Reducer 2" x 4" = 4x60 = Rs. Find out the labour charges for fabrication and erection of a MS pipeline of 50 NB (2") MS “B” or MS “C” of 400 m length fabrication and erection? Ans: 2 x 400 x 45 = Rs. Typical Calculation for Piping Cost Raw material Sheet width Raw material base rate Packing and forwarding Conversion Excise Sales tax/ VAT Insurance Transportation Total Cost mm Rs/kg 78.00 4.46 2.Q.88 0.29 2. Cu piping: 695 inch mtr 14. erection and testing of pipe work shall be expressed as shown below: 1.53 0.00 233.00 0.00 146.00 0.40 50.

General Scope of Work for Piping Fabrication and Erection • Fabrication. welding. cutting. and hardware i.11 93. Rs/kg Rs/kg Rs/mtr 19.e. Pipe work shall be carried out as per piping drawings/ specifications/ instructions given to construction engineer.Modvat Benefit Cost to Co. 16. If stresses developed . bends. • After hydraulic testing.81 30. fitment of non return valve. pipe. • After welding . reducers. • After painting. valves. • One in-position weld is allowed for line which cannot be welded on ground. fabrication of tees. flanges.e. • After assembly. those are to be removed and welded as per standard practice and instructions of the site co-ordinator. gaskets etc.74 15. pipeline to be hydraulically tested at pressure specified in the order. reducer.e. bends. • All raw material i. etc. • Fitment includes assembly of fittings i. pipeline to be assembled in position and with necessary clamps and supports.74 246. sockets for pressure gauges fabrication and fitment of thermowell. nut bolts. gaskets. nut. shall be supplied by client. sockets etc. finishing and grinding . valves. assembly in position as per drawing. complete pipeline to be welded by taking necessary precautions to avoid stresses. pipeline to be painted with red–oxide ( one coat).09 127. flanges.62 202. List of Tools. Tackles and Machinery Required to Carry Out the Piping Works To be arranged by contractor: . bolts.

Abrasive cutting machine 13. FF2 grinder 9. • The estimator should have the skill to draw quick and rather accurate free hand isometric sketches.F. Welders for MS Tacking 6. Highly skilled fitter for MS B and C class piping and fabrication 5. Chain block 3 MT 11 mtr. H. • Piping cost may be a headache to the estimator as he/she is asked to give the cost even before engineering and execution. Lift 7. Highly skilled fitter for SS 304 4. Winch – 5 MT 6. which will be of inestimable value. Rectifier 2. and other tools and tackles. . Supervisor 3. Grinders. Experienced Mechanical Engineer as in-charge 2.1.AG7 5. Helpers/Riggers 18. Contractor Manpower List of Piping. fabrication and erection: 1. Welders for SS TIG. G Q 4 Grinder 12. unit 3. Ropes / pulleys 8. Transformer 4. Hacksaw/Files etc. Fabrication and Erection For piping. 10. Gas cutting 17. Additional Cost Information • Piping cost may vary between 20 to 66 %. Welders for SS Tacking. Pipe voice 11. • The estimator needs to convert the preliminary flow sheet into a fair approximation of an actual design.

However. Chem. It may run to 20 percent or even more of the entire cost of the plant. including land and buildings. and may total from around 10 percent to as high as two-thirds of the cost of the equipment. pp 121-123) has now been carried much further and includes most kinds of pipes with which the chemical engineer is likely to be concerned. For this purpose the ability to make quick and rather accurate free-hand isometric sketches is of inestimable value. Dickson (Chem. It makes his problem no easier that he is often asked for a reasonable estimate long before the final plans exist and before the project engineers have any idea how much piping will actually be needed. 1947. 22. In this case. Eng. The N system was introduced by R. 20. PP 121123) 21. rather inexpensive parts.. but he must be able quickly to convert the preliminary flow sheet into a fair approximation of an actual design to know what his estimate will involve. But piping is usually complicated and often consists of a myriad of small.19. Its estimation can therefore be a headache to the estimator. N System The N system is based on the fact which has been tested many times. the estimation of the piping need not be arduous if the estimator will make use of the N system developed by the another during the last several years. that the costs of strings of pipes of different sizes but of the same material and class of pipe bear constant relations to each other. . Dickson. November.A. StepII : Then use the N factors to get the cost of the same string in the required size. he must not only be an estimator. first disclosed in Chemical Engineering (R. How to use the N System Step I : Calculate the cost of the reference sizes of the strings of pipe in question. Piping Cost Estimation Piping always represents a sizable part of the total installed cost of any process plant. Eng. Methods used for Estimation • Piece by piece method ( Detailed costing) • Finagling factor ( 40 % of equipment cost) • N system. Nov 1947. This system.A.

The Rie-Wil Co.13 Total Cost $ 65... will be to each other approximately as the N factors.00 . buttwelded. Inc. Specific acknowledgement is made to Armstrong Cork Co. The costs of different sizes of steel Pipe. then adding them all up for the total cost. schedule 40. The second consists in taking a percentage of the total cost of a project as the cost of the piping. a string of 2-in nominal diameter pipe will cost 1. * The author wishes to express his appreciation to the firms listed and to may others who prefer to remain anonymous.The N System of Calculating Piping Costs. Table 10-33 of the N factors.” is supposed to be around 40 percent. Taylor Forge and Pipe Works. This new system of estimating piping cost is quicker than the piece-by-piece.84 times as much as the same string in 1 in... and The Duriron Co. As the table shows.00 44. black. Andrews Knapp Construction Co. but who helped by furnishing cost data on which the N-factor tables are based. This percentage the “finagling factor. and more accurate than the “finagling-factor.23 7. for example. Inc. See.00 Total Cost $ 115. Johns Manville. The Saran Lined Pipe Co..00 49. for example.00 $ 208.00 22. The first requires picking of each length of pipe with its fittings and valves and pricing the material and labour costs in detail..” system.. Cooper Alloy Foundry Co. a string of such pipe of 2-in nominal diameter: Item 500’ pipe 7 fittings 2 valves Unit Cost $ 0. Take.. Knapp Mills Inc. Mundet Cork Corp.00 The same string in 1-in nominal diameter: Item 500’ pipe Unit Cost $ 0. with fittings and valves as specified.. the two methods ordinarily used by estimators.

The tables cover only the cost of putting the strings of pipe together.00 $ 119. data given here can be “factored” to the date of use by using one of the available cost variation indexes. and comparable strings were figured for 4. 208/119 = 1.000# cold-water pressure . this means that prices and costs of installation of these materials for the reference sizes only need be kept on file. first calculate the cost of the reference sizes of the strings of pipe in question. pipe as unity. Moreover. if less accurate estimating suffices. 2. pipe for 1935 was 0. screwed. and for 1949. table 10-39 was selected at random. An example of use: Assure that several strings of pipe of various sizes have been taken from the flow diagram of a small project involving some additional piping. many times the proposed lines lie on the ground or are supported on existing structures. If the N system is adopted. pipe.50 11.249. How the N-factor System Is Used: To use the tables. and then July. using first the costs of 1935. some bare. 0. These conditions are far too variable to include in any tables of costs.00 Hence. Several checks of this fact have been made. Not only has the N-factor System been tested thoroughly. pipe in terms of 1 in. The specifications of pipe. For example. counting some insulated.84. 1949.7 fittings 2 valves 4. but it also shows up satisfactorily over a period of time. The index of N-factor tables includes 66 materials and weights of piping. the N factor for 4-in.00 32. schedule 40. The costs of burying or supporting pipelines are easily calculated. instead of material and labour cost of every size of every material and wall thickness in common use. fittings and valves are: Pipe: steel. the N factor for 2-in.and 12-in. Then use the N factors to get the cost of the same string in the required size. bare Fittings: forged steel. costs. Despite the fact that the costs of each string had risen approximately 83 per cent from 1935 to 1949.248. butt-welded. black.). (Also as later explained.00 22.

. (Or take the cost from Table 10-33.. Then “factor” this cost to date of use..50 Per valve .) As in Table 10-33.00 Calculate all the strings taken from the flow diagram as 1-in....... i..... 200 # cold-water pressure Assume that the pipe is to be installed on existing support. 11..... screwed ends....... pipe of the required specifications........ the size for which N = 1..... Next.......... pipe. 4.....Valves: bronze.......... The specifications of the pipe. the installed costs may be found to be: Per foot of pipe ..... calculate the cost of hypothetical string of 1-in........ fittings and valves in Table 10-33 correspond to those required... then multiply by the N factor for the actual size: ..... giving the cost of the reference string in July.. $ 0..... First consult the index of N-factor tables..00.... The reference size.........13 Per fitting . 1949.... is 1 in..........e.......

the total cost of piping calculated by the conventional pieceby .piece system would be S764.For comparison. as shown in the following check: .

For uniformity. and the N factors (i. 1949. and to figure any string of pipe.e. relative costs compared with that of the reference size range from 0.730). for example. The comparative costs of the other sizes of the same material are then listed as multipliers of the reference size. and in all the different weight and materials of construction listed in the 66 tables.320 to 6. the N factors are all based on the reference size (or in a few cases.00. it is necessary only to . two reference sizes) for each piping specification.What Data Are Needed: The N-factor tables were derived by actual calculation of the installed costs of typical strings of pipe in all the sizes mentioned in each table. Hence. all have been calculated on the basis of July. materials and labour costs in the New York area. For each specification the costs so calculated for the several sizes have been compared with the cost of one reference size which is taken as 1. the sizes range from ½ to 12 in. In Table 10-1. The reference size is 3 in.

For this purpose. . Smith and Associates. which is widely used by estimators in dealing with plant and equipment cost variations. This means that it is necessary to keep up-to-date the cost data only for the reference size (or sizes) in each specification. The magazine Chemical Engineering regularly publishes the comparative equipment cost indexes for process industries compiled quarterly by the evaluation engineering firm of Marshall and Stevens. covering equipment costs in a wide range of industrial and commercial activities. None of these indexes applies directly to piping costs and must therefore be used with care. These are the Handy Indexes of Public Utility Costs. 1949. put out for the estate of William W. together with this firm’s 1947 industry average. Once the cost of the reference size is known. it is possible to “factor” them to the date of use by the judicious use of one or more of the available cost indexes. the costs for any other size or for several sizes can be determined immediately by multiplying by the proper N factor. are not so readily available as those mentioned. Handy by Whitman. also publishes the ENR Construction Cost Index. as well as the magazine Engineering News-Record. as far as the author knows. if a somewhat lower degree of estimating accuracy can be tolerated than is possible by having up-to-date figures. However. these figures can be used directly. although it is intended to cover only heavy construction costs. The Survey.S. Some organisations have successfully applied their own modifications to the ENR Index in using it to “factor” plant and equipment costs. Among these are several building cost indexes for various kinds of labour and for a number of basic materials. Department of Commerce. But since such costs are not likely to be stated in the future. The only indexes that actually deal with piping cost. and Benjamin L. each of the tables includes as a second part (or in some cases.figure the cost for the reference size in that particular specification. This compilation is issued every six months and lists several kinds of piping including gas mains and power plant piping. Cost Indexes: Many cost indexes are available monthly in the Survey of Current Business. 1949. 1949 costs. experience has indicated that such “factoring” can be sufficiently accurate at least for pre-construction cost estimating. Requard and Associates. as a second and third part) the detailed calculations for the reference size or sizes for these materials are based on July. since the N factors remain constant through an extremely wide range of material and labour cost variations. of Albany. Estimating without Current Data: This means also that it is unnecessary to keep up-to-date data even on the costs for the reference strings. published by the U. As long as labour and material costs do not change much from July. of Baltimore. in comparison to the index for July.

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125# Reference size: 3# . screwed. Aleoa alloy 618-T6. standard weight. 1 ½” to 12" aluminium. 1/2 “ to 12” Fittings: aluminium. gate.Table for N System Pipe: aluminium. bare. gate. welding Valves: ½” and 1" aluminium. flanged.

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