Saep 341 PDF

Engineering Procedure
SAEP-341 5 May 2016

Equipment Life Cycle Cost Procedure
Document Responsibility: Pumps, Seals and Mixers Standards Committee
Contents
1 Scope.............................................................. 2
2 Applicable Equipment Types
and Required LCC Data.......................... 2
3 Applicable Documents.................................... 3
4 Instructions......................................................4
Appendix A – Calculation Methods

for Life Cycle Cost Analysis................... 10
Previous Issue: 20 October 2012 Next Planned Update: 5 May 2019

Page 1 of 21
Contact: Al-Ghamdi, Abdullah Ali (ghamaa3g) on 966-13-8809507
Copyright©Saudi Aramco 2016. All rights reserved.

Document Responsibility: Pumps, Seals and Mixers Standards Committee SAEP-341
Issue Date: 5 May 2016
Next Planned Update: 5 May 2019 Equipment Life Cycle Cost Procedure
1 Scope
This procedure provides instructions for economically evaluating major equipment

purchases with regards to their estimated total ownership cost (Life Cycle Cost) to
Saudi Aramco over a twenty (20) years period. These costs include procurement and
operation cost (energy cost and quantifiable periodic maintenance) of the equipment.
This procedure details the requirements for determining Life Cycle Costs (LCC) for
purchases of major equipment identified in Section 2. The applicable LCC analysis
Spreadsheets provide a practical vehicle for performing the required calculations.
2 Applicable Equipment Types and Required LCC Data
Equipment Required LCC Data

Specified rated load in kW (Lr), guaranteed no load
Power Transformers loss in kW at rated voltage (Li), and the guaranteed
(14-SAMSS-531) load loss in kW at the oil / air self-cooled rating for 85°C
winding temperature (Lc).
Form-Wound Induction Motor rating (kW) and guaranteed efficiency at the
Motors 500 HP & Above specified operating points defined by the driven
(17-SAMSS-502) equipment datasheet.
Form-Wound Synchronous Generator rating (kW) and guaranteed efficiency at the
Turbine Generators specified operating points defined by the driven
Form Wound Brushless Motor rating (kW) and guaranteed efficiency at
Synchronous Motors specified operating points defined by the driven
Axial and Centrifugal Guaranteed brake horsepower in kW at the specified
Compressors and operating points defined by the compressor datasheet.
Expander-Compressors LCC analysis is mandatory only for compressors of
(31-SAMSS-001) 373 kW (500 HP) driver or larger.
Guaranteed brake horsepower in kW at the specified
Integrally Geared
operating points defined by the compressor datasheet.
Centrifugal Compressors
LCC analysis is mandatory only for compressors of
(31-SAMSS-006)
373 kW (500 HP) driver or larger.
Guaranteed brake horsepower in kW at normal
Centrifugal Pumps
operating point. LCC analysis is mandatory only for
(31-SAMSS-004)
pumps of 373 kW (500 HP) or larger.
Steam consumption rates based on generated power
Steam Turbines
or horsepower required by driven equipment at the
(32-SAMSS-001,
specified operating conditions. LCC analysis is
32-SAMSS-009,
mandatory for all trains driven by Steam Turbines rated
32-SAMSS-010)
373 kW (500 HP) or larger.
Page 2 of 21
Equipment Required LCC Data

Boilers
Guaranteed efficiency at normal operating load.
(32-SAMSS-021)
Fired Heaters
Guaranteed efficiency at normal operating load.
(32-SAMSS-029)
Guaranteed Fuel Gas Consumption at Normal
Gas Turbines
Operating Point per Machine (MMBTU/Hr) at site
(32-SAMSS-100)
conditions
3 Applicable Documents
3.1 Saudi Aramco Materials System Specifications

14-SAMSS-531 Power Transformers
17-SAMSS-502 Form-Wound Induction Motors 500 HP and Above
17-SAMSS-510 Form-Wound Synchronous Turbine Generators
17-SAMSS-520 Form-Wound Brushless Synchronous Motors
31-SAMSS-001 Axial and Centrifugal Compressors and Expander
Compressors
31-SAMSS-004 Centrifugal Pumps
31-SAMSS-006 Integrally Geared Centrifugal Compressor
32-SAMSS-001 Steam Turbines for Power Generation
32-SAMSS-009 General Purpose Steam Turbines
32-SAMSS-010 Special Purpose Steam Turbines
32-SAMSS-021 Manufacture of Industrial Boilers
32-SAMSS-029 Manufacture of Fired Heaters
32-SAMSS-100 Gas Turbines
3.2 Saudi Aramco Engineering Standards

SAES-F-001 Design Criteria of Fired Heaters
SAES-G-005 Centrifugal Pumps
SAES-K-402 Centrifugal Compressors
SAES-P-113 Large Electrical Motors
SAES-P-121 Power Transformers
Page 3 of 21
3.3 Life Cycle Cost Spreadsheets
The following spreadsheets are to be used in the analysis and are available in the
Forms section of the Engineering Standards website:
LCC-001 Centrifugal Pumps (31-SAMSS-004) *
LCC-002 Centrifugal Pump-Motor Trains (31-SAMSS-004)
LCC-006 Compressor Driven by Electric Motor
LCC-007 Compressor or Pump driven by Steam Turbine
LCC-008 Steam Turbine driving Generator (STG)
LCC-015 Gas Turbines (32-SAMSS-100)
LCC-019 Induction Motors (17-SAMSS-502) *
LCC-020 Synchronous Motors (17-SAMSS-520) *
LCC-021 Synchronous Generators (17-SAMSS-510)
LCC-023 Power Transformers (14-SAMSS-531)
LCC-024 Boilers (32-SAMSS-029)
LCC-024A Dual Fuel Boilers (32-SAMSS-021)
LCC-025 Fired Heaters (32-SAMSS-029)
LCC-025A Dual Fuel Fired Heaters (32-SAMSS-029)
* These spreadsheets are to be used when buying stand-alone pumps, motors or
generators. For equipment trains (i.e., motor driven pump train, etc.), the train
work sheets are to be used.
Note: LCC spreadsheet was developed by the related Standards Committee

Chairman (SCC) and any question or needed clarification should be
addressed to him directly.
4 Instructions
4.1 SAPMT Submittal of Project Equipment Lists
Saudi Aramco Project Management Team (SAPMT) shall prepare and include
the following items in the project proposal documents:
4.1.1 A list of the Project's equipment items that are covered by the above
SAMSSs.
4.1.2 A list of equipment items subject to LCC analysis. This list is to be

included in Schedule G of the contract. A copy is to be sent to
Estimating Services Division (ESD/PMOD) so that they include
Page 4 of 21
additional allowances in the ER estimate to cover the differential in

equipment cost due to LCC analysis.
4.1.3 A list of equipment items with long lead-time delivery that may require
expedited SAPMT bid development.
4.1.4 A list of the latest applicable energy costs (EC) and discount rate (DR)
obtained from FPD. Energy cost and discount rate vary based on the
company guidelines.
4.2 Equipment Requiring SAPMT Bid Development
For Equipment Requiring SAPMT Bid Development prior to contract award

(long lead equipment), the following steps shall be implemented:
4.2.1 Upon receipt of the equipment bids, SAPMT's technical evaluation shall
ensure that the bids contain the required data needed to perform LCC
analysis.
4.2.2 SAPMT shall perform the LCC analysis by utilizing the applicable LCC
Spreadsheet (s) to determine the Life Cycle Cost for each acceptable
vendor. Other quantifiable cost factors that may significantly impact the
economic analysis (such as delivery dates) may be included in the LCC
analysis. Inclusions of supplementary cost factors require the prior
approval of the project manager and CSD's concurrence.
4.2.3 SAPMT shall submit the completed LCC spreadsheets to CSD with
supporting documents for review and comments. CSD shall provide
comments, if any, within 10 working days.
4.2.4 SAPMT shall calculate the savings (SLCC) in life cycle cost according to
the following equation:
SLCC = LCCLIB – LCCLC (1)
where:
LCCLC is the equipment life cycle cost of the vendor with the lowest
overall LCC
LCCLIB is the life cycle cost of the vendor with the lowest initial bid
(LIB)
In case of Gas Turbine in Power generation, the Purchase Order (P/O)

shall be placed with the vendor having the highest return to the company
(+NPV) which considers the revenue from electricity production.
Page 5 of 21
4.2.5 Purchase Order (P/O) shall be placed with the vendor having the lowest
LCC if SLCC is more than 5% of the Lowest Initial Bid (LIB).
4.2.6 After P/O placement, SAPMT shall submit a copy of the final LCC
Spreadsheet(s) to Estimating Services Division (ESD/PMOD) for
archiving and CSD for record.
4.2.7 If Project Management awards to a vendor, a purchase order with a

potential performance liability based on the provisions of the applicable
SAMSS (penalty clause), and the purchase order is to be transferred
(“novated”) to the successful LSTK contractor on the project, Project
Management and/or Purchasing must include provisions in the Novation
Agreement that specifically describe the liability being assumed by the
contractor.
4.2.8 The equipment shall be tested at the vendor facility for guaranteed
efficiency if required by the applicable Saudi Aramco Materials System
Specification (SAMSS) and/or the Project Contract. If the equipment
does not meet the specified efficiency, and cannot be corrected within
the test tolerance as specified in the SAMSS, a penalty shall be imposed
on the supplier as defined in the SAMSS and the Purchase order.
4.3 Equipment Not Requiring SAPMT Bid Development
For Contractor procured equipment (all non-long-lead time equipment) the

following steps shall be implemented:
4.3.1 After evaluating the vendor submittals, the Contractor shall provide the
bid technical data, required commercial data per Schedule G, and the
equipment site delivery date for each vendor to SAPMT for review.
4.3.2 SAPMT shall review the information to determine if it contains all of the
required data needed to complete the LCC analysis and shall require the
Contractor to provide any missing or unacceptable data.
4.3.3 SAPMT shall perform the LCC analysis by utilizing the applicable LCC
Spreadsheet(s) to determine the Life Cycle Cost for each acceptable
vendor. Other quantifiable cost factors that may significantly impact the
economic analysis (such as savings due to early delivery) may be
considered for inclusion in the LCC analysis. Inclusions of
supplementary cost factors require the prior approval of the project
manager and CSD's concurrence.
4.3.4 SAPMT shall submit the completed LCC spreadsheets to CSD with
Page 6 of 21
4.3.5 SAPMT shall calculate the savings (SLCC) in life cycle cost according to

where:
overall LCC
4.3.6 SAPMT shall direct the contractor to place the Purchase Order (P/O) with
the vendor having the lowest LCC if SLCC is equal to 115% or higher of the
compensation to the LSTK Contractor (refer to paragraph 4.3.7).
4.3.7 If the COMPANY directs the CONTRACTOR to purchase the

equipment from any manufacturer technically qualified by the
CONTRACTOR other than the CONTRACTOR's proposed source of
supply, the COMPANY shall compensate the CONTRACTOR for any
difference between the total delivered equipment cost of
CONTRACTOR's proposed source of supply and that of the COMPANY
directed manufacturer.
4.3.8 After P/O placement, SAPMT shall provide a copy of the final LCC
Spreadsheet(s) to the Estimating Services Division (ESD/PMOD) for
archiving and CSD for record.
efficiency if required by the applicable Saudi Aramco Materials System
does not meet the specified efficiency, and cannot be corrected within
the test tolerance as specified in the SAMSS, a penalty shall be imposed
on the contractor as defined in the SAMSS and the Project Contract.
4.4 All Direct Charge Purchases Requiring LCC Analysis
For Direct Charge (D/C) procurement of equipment, the following steps shall be
implemented:
4.4.1 The Proponent Requisition Originator shall develop the Purchase

Requisition (PR) or the Request for Quotation (RFQ) for the subject
equipment and forward it to Purchasing for bid development. If the
requested equipment requires LCC analysis as specified in the applicable
Page 7 of 21
SAMSS, the Requisition shall clearly indicate the required LCC data
which the bidders need to provide.
4.4.2 Upon receipt of the PR or the RFQ, the Proponent Requisition Originator
(PRO) shall review the indicated line items and specifications to
determine if any of the items require LCC analysis.
4.4.3 Upon receipt of bids, the Buyer shall request the Proponent Requisition
Originator to perform the technical evaluation.
4.4.4 PRO shall obtain the latest applicable energy costs (EC) and discount
rate (DR) from FPD for use in the LCC analysis. Energy cost and
discount rate vary based on the company guidelines.
4.4.5 PRO shall perform the LCC analysis by utilizing the applicable LCC
Spreadsheet(s) to determine the Life Cycle Cost for all technically and
commercially acceptable vendors.
The completed LCC spreadsheets shall be sent to CSD with all

4.4.6 The buyer shall calculate the savings (SLCC) in life cycle cost according to
where:
overall LCC cost
4.4.7 Purchase Order (P/O) placement shall be with the vendor having the
lowest LCC if SLCC is more than 5% of the Lowest Initial Bid (LIB).
4.4.8 If the equipment cost for the selected equipment is higher than the PR's
authorized limit, the Requisition Originator (Proponent) shall initiate a
Change Requisition to authorize these additional funds.
4.4.9 After P/O placement, Buyer shall submit a copy of the final LCC
Spreadsheet to Estimating Services Division (ESD/PMOD) for archiving
and CSD for record.
efficiency if required by the applicable Saudi Aramco Materials
Page 8 of 21

does not meet the guaranteed efficiency, and cannot be corrected within
the test tolerances allowed, a penalty shall be imposed upon the supplier
in accordance with the terms and conditions specified in the applicable
Purchase Order.
Revision Summary
5 May 2016 Major revision to improve Equipment Life Cycle Cost Procedure and maximize energy
conservation.
Page 9 of 21
Appendix A - Calculation Methods for Life Cycle Cost Analysis
This section is included in this SAEP for clarification purpose only. The logic is already
included in the Life Cycle Cost Spreadsheets.
A.1 Centrifugal Pumps
The Life Cycle Cost (LCC) of the centrifugal pumps is determined from the
following formula:
LCC = IC + OC (4)
where:
IC = Initial Cost, $ (Purchase order cost of all equipment being bought)
OC = Present value of Operating power Cost, $, for operating period of

20 years
= P * EF * No. of units being bought
P = Equipment Power in kW, at normal flow rate for actual fluid.
EF = Evaluation Factor ($/kW) will be shown on the data sheet and/or in

the quotation request
= PV * EC * AH
PV = Present Value based on given discount rate for 20 years equipment

life
EC = Energy Cost in $/kWh
AH = Annual operating Hours
= OF * 8760
OF = Operating Factor
= Number of Operating Units divided by the total number of units in

the same service including new and existing units.
Note: Contact the Pumps, Seals and Mixers Standards Committee Chairman for any
question or clarification.
Page 10 of 21
A.2 Electrical Motor Driven Centrifugal Pump
The Life Cycle Cost (LCC) of the electrical motor driven trains is determined
from the following formula:
LCC = IC + OC (5)
where:
IC = Initial Cost, $ (Purchase order cost of all trains being bought)

20 years
= P/(Em*EG) * EF * No. of trains being bought
P = Driven equipment Power in kW, at normal flow rate for actual

fluid.
Em = Motor Efficiency at normal operating load (decimal)
EG = Gear Efficiency at normal operating load (decimal). If there is no

gear, EG = 1

= PV * EC * AH

life
= OF * 8760

the same service including new and existing units
Note: Contact the Pumps, Seals and Mixers Standards Committee Chairman for any
Page 11 of 21
A.3 Compressor driven by Electrical Motor
The Life Cycle Cost (LCC) of the electrical motor driven trains is determined
LCC = IC + OC (5)
where:

20 years
= P * EF * No. of trains being bought
P = Normalized Power (Compressor coupling BHP) per train (kW)

= PV * EC * AH

life
AH = Annual Operating Hours = OF * 8760

Note: Contact the Compressors, Gears and Steam Turbines Standards Committee
Chairman for any question or clarification.
A.4 Electrical Motors
The Life Cycle Cost (LCC) of the electrical motors is determined from the
following formula:
LCC = IC + OC (6)
where:
IC = Initial Cost, $ (Purchase order cost of all motors being bought)
Page 12 of 21

20 years
= RP * EF * No. of motors being bought
RP = Required Power in kW
= P/Em
P = Motor load in kW, at normal operating conditions.
Em = Motor vendor's Guaranteed Efficiency at normal operating load

(decimal)

= PV * EC * AH

life
= OF * 8760

Note: Contact the Motors and Generators Standards Committee Chairman for any
A.5 Generators
The Life Cycle Cost (LCC) of the generator is determined from the following
formula:
LCC = IC + OC (7)
where:
IC = Initial Cost, $ (Purchase order cost of all generators being bought)
Page 13 of 21

20 years
= RP * EF * No. of generators being bought
RP = Required Power in kW
= P/Em
P = Generator load in kW, at normal operating conditions.
Em = Generator vendor's Guaranteed Efficiency at normal operating load

(decimal)

= PV * EC * AH

life
= OF * 8760

the same service including new and existing units.
Note: Contact the Motors and Generators Standards Committee Chairman for any
A.6 Life Cycle Cost Evaluation for Boilers and Fired Heaters
The Life Cycle Cost (LCC) of the boilers and fired heaters is determined from
the following formula:
Single Fuel Services:
LCC = IC + OC (8)
where:
IC = Initial Cost, $ (Purchase order cost of all units being bought)
Page 14 of 21

20 years
= CF * EF * No. of units being bought
CF = Consumed Fuel (Heat Release) in MMBTU/hr = L/EFF
L = Unit load (Duty) at normal condition (MMBTU/hr) provided in the

data sheet by the buyer.
EFF = Unit Efficiency (decimal) at normal condition provided by vendor.
EF = Evaluation Factor ($-hr / MMBTU) will be shown on the data sheet

and/or in the quotation request
= PV * EC * AH

life
EC = Energy Cost in $/MMBTU
OF = Operating Factor = Number of Operating Units divided by the

total number of units in the same service including new and
existing units OF = 1 for process heaters since there is no standby
process heaters.
Dual Fuel Services:
LCC = IC + OCx + OCy (9)

where:
IC = Initial Cost, $ (Purchase order cost of all units being bought)
OCx = Present value of Operating power Cost, $, for operating period of

20 years
= CFx * EFx * No. of units being bought
OCy = Present value of Operating power Cost, $, for operating period of

20 years
= CFy * EFy * No. of units being bought
CFx = Consumed Fuel (Heat Release) in MMBTU/hr = Lx/EFF
Page 15 of 21
CFy = Consumed Fuel (Heat Release) in MMBTU/hr = Ly/EFF
EFx = Evaluation Factor for fuel type x ($-hr / MMBTU) will be shown
on the data sheet and/or in the quotation request
= PV * ECx * Tx / AH
EFy = Evaluation Factor for fuel type y ($-hr / MMBTU) will be shown
on the data sheet and/or in the quotation request
= PV * ECy * Ty / AH

life
L = Unit load (Duty) at normal condition (MMBTU/hr) provided in the

data sheet by the buyer.
EFF = Unit Efficiency (decimal) at normal condition provided by vendor.
EC = Energy Cost in $/MMBTU
OF = Operating Factor = Number of operating units divided by the

number of units being bought. OF = 1 for process heaters since
there is no standby process heaters
x & y are the types if fuel that will be provided in the data sheets by buyer.
Note: Contact the Heat Transfer Equipment Standards Committee Chairman for any
A.7 Power Transformers
The Life Cycle Cost (LCC) of the power transformers is determined from the
following formula:
LCC = IC + [No. of transformers being bought * (A*Li+B*Lc)] (10)
where:
IC = Initial Cost, $ (Purchase order cost of all transformers being

bought)
A*Li = Present value of no-load loss cost in $, for operating period of

20 years
Page 16 of 21
B*Lc = Present value of load loss cost in $, for operating period of 20 years
A = No Load Loss Constant, $/kW
= PV* E1*T1

life
E1 = Energy Cost, $/kWh
T1 = Annual operating Hours, 8760 hr
Li = Manufacturer guaranteed no-load loss, kW
B = Load Loss Constant, $/kW
= 0.49 * A
Lc = Manufacturer guaranteed load loss, kW

Note: Contact the Electrical Substations Equipment Standards Committee Chairman
for any question or clarification.
A.8 Gas Turbines
The Life Cycle Cost (LCC) of the gas turbine in both mechanical drive and
power generation application, excluding the driven equipment.
For power generation units, the final NPV will consider the profit of producing
electricity. The total NPV will have positive $ figure, the highest number is the
better.
For mechanical drive, the final NPV will consider only the initial, operation,
maintenance cost. The total NPV will be shown as ($), and the lower is the
better LCC.
LCC = IC + OC + Maintenance Cost (11)

where:
IC = Initial Cost, $ (Purchase order cost of all equipment being bought)
OC = Present value of Operating Cost (Fuel, Water, Power), $, for

operating period of 20 years
OC = Number of Units *(EF*(Power Consumption) + EFGAS*(Fuel

Consumption) + EFWAT*(Water Consumption))
Page 17 of 21
+ ECLTSA * PV * Number of units
+ECPROG * PV * Number of units
P = Equipment Power in kW, at normal flow rate for actual fluid.

= PV * EC * AH

life
Fuel Consumption = For Each Turbine in MMBTU/HR
Utility Water Consumption = For Each Turbine in liter/HR
Utility Power Consumption in KWh
EFGAS = Evaluation Factor for Fuel gas in $/mmbtu
= PV*(Fuel Cost)*AH
EFWAT = Evaluation Factor for Utility Water in $/liter
= PV*(Water Cost)*AH
= OF * 8760
= Number of Operating Units divided by the total number of units

in the same service including new and existing units.
ECLTSA = if applicable Cost of Long Term Service Agreement Annually
ECPROG = if applicable Cost of Spare Parts Leas per Year
Gas Turbine Maintenance Cost Section:
LEVEL 1 Cost: Corresponds to Boroscoping Cost per Occurrence
Page 18 of 21
LEVEL 2 Cost: Corresponds to Combustion section maintenance Cost per

Occurrence
LEVEL 3 Cost: Corresponds to Hot Gas inspection and maintenance Cost

per Occurrence
LEVEL 4 Cost: Corresponds to Major Overhaul Cost per Occurrence
OCC4 = Total number of Level 4 Scheduled Maintenance during the plant

Life

Life

Life

Life
pv4 = Present Value Factor for Level 4
Total Maintenance Cost = (Level 4 Cost*pv4)
+(Level 3 Cost*pv3)
+(Level 2 Cost*pv2)
+(Level 1 Cost*pv1) (12)

Note: Contact the Gas Turbines and Diesel Engines Standards Committee Chairman
for any question or clarification.
A.9 Compressor (or Pump or Blower…etc.) driven by Steam Turbine
The Life Cycle Cost (LCC) of the Steam Turbine driven trains is determined
LCC = IC + OC (5)
Page 19 of 21
where:

20 years
= EF * S * No. of trains being bought
S = Normalized Steam Rate required per train (lb/hr)
ƞG = Gear Efficiency (Decimal) if a gearbox is used; ƞg= 1 if there is no

gear between the driver and driven equipment.
EF = Evaluation Factor ($/lb/hr) will be shown on the data sheet and/or

in the quotation request
= PV * EC * AH

life
EC = Steam Cost in $/lb
= OF * 8760

Note: Contact the Compressors, Gears and Steam Turbines Standards Committee
Chairman for any question or clarification.
A.10 Steam Turbine Driven Generator
The Life Cycle Cost (LCC) of the Steam Turbine driven Generator is
determined from the following formula:
LCC = IC + OC - RV (5)
where:
Page 20 of 21

20 years
= PV * EC * S * AH * No. of trains being bought
RV = Present Value of Revenue (or avoided cost) from the Generated

Electric Power for 20 years equipment life
= EF * P * No. of trains being bought
PV = Present Value based on discount rate for 20 years equipment life
EC = Steam Cost in $/lb
S = Normalized Steam Rate required per train (lb/hr)
= OF * 8760

= PV * EV * AH
EV = Energy Value (of Generated Power) in $/kWh

Note: Contact the Compressors, Gears and Steam Turbines Standards
Committee Chairman for any question or clarification.
Commentary Note:
The Present Value (PV) is calculated based on discount rate per the latest
company guidelines. The following formula is used to get the PV
PV=[(1+i)n-1]/[i(1+i)n], where i is the discount rate expressed as a decimal
number and n is the life of the motor (20 years).
Page 21 of 21

Saep 341 PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Saep 341 PDF

Uploaded by

Copyright:

Available Formats

Engineering Procedure

SAEP-341 5 May 2016

Appendix A – Calculation Methods

Previous Issue: 20 October 2012 Next Planned Update: 5 May 2019

Copyright©Saudi Aramco 2016. All rights reserved.

This procedure provides instructions for economically evaluating major equipment

2 Applicable Equipment Types and Required LCC Data

Equipment Required LCC Data

Equipment Required LCC Data

3.1 Saudi Aramco Materials System Specifications

3.2 Saudi Aramco Engineering Standards

3.3 Life Cycle Cost Spreadsheets

Note: LCC spreadsheet was developed by the related Standards Committee

4.1 SAPMT Submittal of Project Equipment Lists

4.1.2 A list of equipment items subject to LCC analysis. This list is to be

additional allowances in the ER estimate to cover the differential in

4.2 Equipment Requiring SAPMT Bid Development

For Equipment Requiring SAPMT Bid Development prior to contract award

In case of Gas Turbine in Power generation, the Purchase Order (P/O)

4.2.7 If Project Management awards to a vendor, a purchase order with a

4.3 Equipment Not Requiring SAPMT Bid Development

For Contractor procured equipment (all non-long-lead time equipment) the

comments, if any, within 10 working days.

SLCC = LCCLIB – LCCLC (2)

4.3.7 If the COMPANY directs the CONTRACTOR to purchase the

4.4 All Direct Charge Purchases Requiring LCC Analysis

4.4.1 The Proponent Requisition Originator shall develop the Purchase

The completed LCC spreadsheets shall be sent to CSD with all

Specification (SAMSS) and/or the Project Contract. If the equipment

Appendix A - Calculation Methods for Life Cycle Cost Analysis

A.1 Centrifugal Pumps

IC = Initial Cost, $ (Purchase order cost of all equipment being bought)

OC = Present value of Operating power Cost, $, for operating period of

= P * EF * No. of units being bought

P = Equipment Power in kW, at normal flow rate for actual fluid.

EF = Evaluation Factor ($/kW) will be shown on the data sheet and/or in

PV = Present Value based on given discount rate for 20 years equipment

EC = Energy Cost in $/kWh

AH = Annual operating Hours

= Number of Operating Units divided by the total number of units in

A.2 Electrical Motor Driven Centrifugal Pump

IC = Initial Cost, $ (Purchase order cost of all trains being bought)

OC = Present value of Operating power Cost, $, for operating period of

= P/(Em*EG) * EF * No. of trains being bought

P = Driven equipment Power in kW, at normal flow rate for actual

Em = Motor Efficiency at normal operating load (decimal)

EG = Gear Efficiency at normal operating load (decimal). If there is no

EF = Evaluation Factor ($/kW) will be shown on the data sheet and/or in

PV = Present Value based on given discount rate for 20 years equipment

EC = Energy Cost in $/kWh

AH = Annual operating Hours

= Number of Operating Units divided by the total number of units in

A.3 Compressor driven by Electrical Motor

IC = Initial Cost, $ (Purchase order cost of all trains being bought)

OC = Present value of Operating power Cost, $, for operating period of

= P * EF * No. of trains being bought

P = Normalized Power (Compressor coupling BHP) per train (kW)

EF = Evaluation Factor ($/kW) will be shown on the data sheet and/or in

PV = Present Value based on given discount rate for 20 years equipment

EC = Energy Cost in $/kWh

AH = Annual Operating Hours = OF * 8760

= Number of Operating Units divided by the total number of units in

A.4 Electrical Motors

= P/(EmEG) EF * No. of trains being bought

LCC = IC + [No. of transformers being bought * (ALi+BLc)] (10)

OC = Number of Units (EF(Power Consumption) + EFGAS*(Fuel