Technology Selection

You want to put up a Process Unit

Steps involved
Feasibility study Basic design Detailed engineering Procurement & construction Startup & operation

But what is missing ? - THE TECHNOLOGY

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What is technology ?
Know how based on which the unit is designed and operated to achieve the process objective

But then why a technology selection?

Answer is simple:
You do not have the technology but need one to meet your process objective Two or more parties can offer you the technology you need

Process objectives driven by:

Feedstock type/availability/quality Product type/demand/specifications

Performance requirements
Plant economics Environmental stipulations

Two Types of Process Technology Technology

Licensed

Non-licensed or Open-art
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Licensed Units
Examples
Naphtha/Diesel Hydrotreaters Catalytic Reformer

Hydrocracker
Fluid Catalytic Cracker Sulphur Recovery

Non-Licensed Process Units (Open-art Units)

Examples
Crude/Vacuum Distillation Naphtha Stabiliser/Splitter

Caustic Wash
Amine Absorption/Regeneration Sour Water Stripper

Technology Selection normally pertains to the

LICENSED UNITS

Technology Selection

Technology Evaluation

Licensor Selection

Licensor Evaluation

are synonyms
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Sources of Technology
R&D organisations working in association with design/operating companies
Example IIP, Dehradun

Operating companies having expertise in technology development

Example Shell Exxon

Licensors having laboratories, pilot facilities

Example UOP IFP
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Who can do the technology selection ?

Technology selection requires
Basic or conceptual knowledge on technology Experienced and professional approach Confidentiality of information Uniformity of yardsticks Unbiased but firm opinion Ability to stand post selection scrutiny

Job is entrusted to a party of good standing in this activity area or carried out by client himself
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Steps Involved in Technology Selection

A) Prior to Receipt of Proposals
- Finalisation of design basis, criteria & procedure

of evaluation with client Preparation of Notice Inviting Tender (NIT) or Bid Enquiry Document (BED). Finalisation of list of licensors with client Example : Chevron, UOP, Shell & IFP for Hydrocracker Setting schedule for receipt of proposals Floating of NIT
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Contents of NIT
-

Letter inviting proposals

Instructions to licensor Technical specifications

Scope of licensors services & supplies

Commercial terms & conditions Information required in technical proposal

Information required in commercial proposal

Time schedule
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Technical Specifications
Processing objective Definition of battery limits

Unit capacity Feedstock characteristics Product specifications Battery limit conditions Utilities definition Catalysts & Chemicals Unit optimisation criteria Environmental and safety considerations Specific process design guidelines
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Scope of Licensors Services & Supplies

Supply of Basic Design & Engineering Package (BDEP) Review of detailed engineering documents (to the extent necessary as per licensor) Supply of proprietary catalysts, chemicals (e.g. adsorbent) & equipment (e.g. rotary valve) Training of clients personnel in operating unit/classroom Assistance during pre-commissioning & commissioning Assistance during performance guarantee run
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Information required in technical proposal

Salient features, description, flow diagram Conformity with product specifications Main operating conditions Overall yields, material balance Catalyst details Reactor features Equipment list & broad specifications Chemicals requirements Utilities estimate Estimate of gaseous, liquid, solid effluents Plot area requirement
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Information required in commercial proposal

License fee on fully paid-up basis Fee for supply of BDEP FOB price of proprietary catalysts, adsorbents, equip. Per diem fee + local allowances for assistance during Pre-commissioning and commissioning Performance guarantee run Fee for training

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Information required in commercial proposal (contd..)

Process guarantees & liabilities Unit throughput Turndown Product yields Product specifications Catalyst life Consumption of key utilities Commercial references

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Steps involved in Selection of Technology

A) B) Receipt of Proposals Subsequent to receipt of proposals
Identification and receipt of balance information Question on technical proposal (TQs) Questions on unpriced commercial proposal (CQs) Replies to TQs & CQs from licensors Discussions with licensors Technical evaluation Opening of priced bids Commercial evaluation Recommendations to client

Typically takes 12-16 weeks after receipt of proposals

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Technical Evaluation

Proven ness of technology (Commercial references)

Technology features

Scope of work

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Technology Features to be Analysed

Feed & product characteristics Product yields Process configuration details PFD Operating conditions Catalysts/chemicals details : Availability Reactor design aspects Equipment specifications : Screen & supplement Utilities consumption Plant operation, maintenance, safety features Process guarantees
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Commercial Evaluation
Features to be analysed
-

Terms of payment Deviations in scope of work/supplies Broad equipment specifications In house data base Cost of proprietary items

Cost estimates based on

-

Product yields, utilities, catalyst life as concluded in technical evaluation Calculate Net Present Value (NPV)

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Basis for NPV Calculations

Discount rate : 12% Feedstock quantity Guaranteed yields of products Guaranteed consumption of utilities Catalyst/adsorbent quantity as given by licensors Guaranteed ultimate life of catalysts & chemicals Estimated plant cost License, BDEP, training fees Fees for assistance during detailed engg, etc. Fees for assistance during start up, etc.
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Basis for NPV Calculations (contd)

Local taxes on fees & services Custom duty, ocean freight, handling, insurance on catalysts and adsorbents Plant life : 15 years Foreign exchange rate as on date of opening of price bids

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Basis for Recommendation

95% weighted value is given for the NPV calculated and balance 5% weighted value is given for compliance to commercial terms and conditions. The proposal resulting in maximum weighted value is recommended for the selection of licensor.

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Precautions While Acquiring the Technology

Commercially proven technology from reputed licensor shall be selected. For semi commercial technology, verify the claims by licensor. For technology from operating company, check availability of adequate documents. For technology from research labs, study scale up method, process design aspects and detail engineering problems. Study contract document for legal/commercial implications. Study tall claims by plant visit.
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