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Chapter 5
Chapter 5
Chapter 5
Types of Capital Cost Estimate
For a Class 4 estimate, from Table 5.2, the expected accuracy range is between 3 and
12 times that of a Class 1 estimate. A Class 1 estimate can be expected to vary from
+6% to -4%. We can evaluate the narrowest and broadest expected capital cost
ranges as:
Lowest Expected Cost Range
High value for actual plant cost ($2.0 x 106)[1 + (0.06)(3)] = $2.36 X 106
Low value for actual plant cost ($2.0 x 106)[1 - (0.04)(3)] = $1.76 x 106
The actual expected range would depend on the level of project definition and effort. If
the effort and definition are at the high end, then the expected cost range would be
between $1.76 and $2.36 million. If the effort and definition are at the low end, then
the expected cost range would be between $1.04 and $3.44 million.
Example 5.2
Compare the costs for performing an order-of-magnitude estimate and a detailed
estimate for a plant that cost $5.0 x 106 to build.
Solution :
For the order-of-magnitude estimate, the cost of the estimate is in the range of
0.015% to 0.3% of the final cost of the plant:
Vendor quote
Most accurate
Convenient
Effect of Size (Capacity)
n
Ca Aa
(5.1)
Cb Ab Cost Exponent
Ca KAa n (5.2)
Cb
where K
Ab n
Effect of Capacity on Purchased Equipment Cost
Ca K Aan
where
K Cb Abn
Effect of Size (Capacity) cont.
Example 5.3 :
Use the six-tenths-rule to estimate the % increase in purchased
cost when the capacity of a piece of equipment is doubled.
Using Equation 5.1 with n = 0.6:
The larger the equipment, the lower the cost of equipment per
unit of capacity.
Economy of Scale
Example 5.4
Compare the error for the scale-up of a heat exchanger by a
factor of 5 using the six-tenth- rule in place of the cost exponent
given in Table 5.3.
I2
C2 C1
I1
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 Time on Purchased Equipment Cost
Effect of Time on Purchased Equipment Cost
Example 5.6
The purchased cost of a heat exchanger of 500 m2 area in 1990 was $25,000.
a. Estimate the cost of the same heat exchanger in 2001 using the two indices
introduced above.
b. Compare the results.
Total 100
Example 5.7
The capital cost of a 30,000 metric ton/year isopropanol plant in
1986 was estimated to be $7 million. Estimate the capital cost of a
new plant with a production rate of 50,000 metric tons/year in 2001.
Off-sites and COff raw material and final product storage &
utilities loading & unloading facilities; all equipment
necessary to supply required process utilities;
central environmental control facilities; and
fire protection systems
Capital Cost Modules
1. Total Module Cost (Lang Factor)
2. Bare Module Cost
Lang Factor
n
CTM FLang C pi
i 1
FBM = B1 + B2FpFM
o
FBM B1 B2
C p C op Fp FM
Bare Module Cost
F 1 M 1 L FIT LO E
0
BM
Example 5.9
The purchased cost for a carbon steel heat exchanger operating
at ambient pressure is $10,000. For a heat exchanger module
given the following cost information:
Item % of Purchased Equipment Cost
Equipment 100.0
Materials 71.4
Labor 63.0
Freight 8.0
Overhead 63.4
Engineering 23.3
Using the information given above, determine the equivalent cost
multipliers given in Table 5.8 and the following:
0
a. Bare module cost factor, FBM
b. Bare module cost, C BM0
Item % of Purchased Cost Multiplier Value of Multiplier
Equipment Cost
Equipment 100.0 1.0
Materials 71.4 M 0.714
Labor 63.0 L 0.63/(1+0.714)=
0.368
Freight 8.0 FIT 0.08/(1+0.714)=
0.047
Overhead 63.4 0.634/0.368/
O
(1+0.714)= 1.005
Engineering 23.3 E 0.233/(1+0.714) =
0.136
FBM = B1 + B2FpFM
o
FBM B1 B2
C p C op Fp FM
Bare Module Cost Factor
For Heat Exchangers, Process vessels, and pumps
Material Factor, FM, for these equipment are obtained from Figure A.8
along with Table A.3.
( P 1) D
0.0315
2 850 0.6( P 1)
FP ,vessel for tvessel 0.0063m
0.0063
If FP is less than 1, then FP= 1.0
These data are also presented in the form of graphs in Figures A.1-A.7
Illustrative Example
Compare Costs for
1. Shell-and-tube heat exchanger in
CGR 0.50 o
CBM CTM
all equip