General Overview of a

Project

CHE 141
What is a Project?

A planned and organized undertaking to achieve a certain

goal.

For a Chemical Engineer, this can range from small instruments to

very huge plant…

 Installation of a pressure gauge on the pump discharge line for

process monitoring.

 Installation of additional shell and tube heat exchanger on a feed

preheat train for energy conservation.

 Design and construction of a petroleum refinery complex to

supply the local demand for fuels.
Phases of a Project

1. Feasibility Study and Conceptual Study

 Demand for the product and availability of raw materials
 General process concept (Block Flow Diagram)
 Class 5 Estimate

2. Front-end Engineering Design (FEED) or Basic Engineering

Design
 Design Basis (i.e. capacity of equipment, design conditions,
operating conditions)
 Preliminary specification of equipment and vessels
 Process Flow Diagram (PFD) and FEED Piping & Instrumentation
Diagram (P&ID)
 Class 3-4 Estimate
Phases of a Project

3. Detail Engineering, Procurement and Construction (EPC)

 Mechanical, civil / structural and electrical design details
 EPC P&IDs (for construction and as-built)
 Procurement of equipment and materials:
a. Issuance of Bid Documents to Equipment Vendors
b. Bid Evaluation and Clarification
c. Vendor Selection
d. Issuance of Purchase Order (PO)
e. Delivery of Equipment and Construction Materials
 Construction activities
 Class 1-2

4. Commissioning / Startup
 Performance test runs and operational optimization
Class 5 Estimate
Class 5 Estimate
Class 5 Estimate
Class 4 Estimate
Class 4 Estimate
Class 4 Estimate
Class 4 Estimate
Class 4 Estimate
Class 3, 2, 1 Estimates

Actual equipment vendor quotations

including potential change orders.
Influence of Design Decisions on Project Cost

3. Detail Engineering, Procurement and Construction (EPC)

 Mechanical, civil, electrical design details
 Procurement of equipment and materials:
a. Issuance of Invitation to Bid (ITB)
b. Equipment Vendor Selection
c. Issuance of Purchase Order
d. Delivery of Equipment
 Installation of equipment, structures, piping, instruments

4. Commissioning / Start-up
 Performance test run, operational optimization, production

Towler, et. al. 2008. “Chemical Engineering Design”

Factors to Consider in Project Cash Flow Diagram

1. Capital Investment
2. Operating Expenses or Production Cost
a. Utility Cost
b. Labor Cost
c. Raw materials and other consumables such as
catalysts and chemicals
d. Waste disposal cost
3. Revenues
4. Taxes
Economic Evaluation of Projects

1. Simple Pay-back Time

2. Return of Investment (ROI)

3. Net Present Value (NPV)

Economic Evaluation of Projects

4. Internal Rate of Return (IRR)

Note: Calculated IRR should be higher than other investment options.

Sample Problem

Propylene is a valuable product which can be produced by

either Catalytic Cracking or Thermal Cracking. Evaluate
which option is more attractive to pursue. Assume a project
life of 10 years.

Options CAPEX OPEX REVENUE

Process A 100 M US$ 2 M US$ / YR 20 M US$ / YR
Process B 70 M US$ 5 M US$ / YR 15 M US$ / YR
Heat and Material Balance (HMB)

Towler, et. al. 2008. “Chemical Engineering Design”

Process Flow Diagram (PFD)

Towler, et. al. 2008. “Chemical Engineering Design”

Piping & Instrumentation Diagram (P&ID)

The P&ID shows the arrangement of the process equipment, piping,

pumps, instruments, valves and other fittings. It should include the
following:
1. All process equipment, identified by an equipment number.
2. All pipes, identified by a line number.
3. All valves, control and block valves, with an identification
number.
4. Ancillary fittings that are part of the piping system.
5. Pumps, identified by a suitable code number.
6. All control loops and instruments with an identification number.

International standard symbols for instruments, controllers and valves

are given by Instrumentation Systems and Automation Society.
 Piping & Instrumentation Diagram (P&ID)

Refer to Towler, et. al.

2008. “Chemical
Engineering Design” for
other symbols.
General Design Considerations
Basic Engineering Design Data is a document which typically
contain the following:
1.Codes and Standards
2.Units of Measurement
3.Unit and Equipment Numbering
4.Plant or Unit Definition
5.Battery Limit Requirements
6.Site and Meteorological Data
7.Utility Conditions
8.Environmental and Safety Requirements
9.Equipment and Design Considerations
10.Economic Evaluation Criteria