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Capital Cost Quinckly Calculated PDF
Capital Cost Quinckly Calculated PDF
Feature Report
Capital Costs
Quickly Calculated
Estimating capital costs early can prevent
unnecessary expenditures on dead-end projects
Gael D. Ulrich and Palligarnai T. Vasudevan
University of New Hampshire
EXPONENTIAL
TABLE 1. TYPICAL EXPONENTS FOR EQUIPMENT COST
AS A FUNCTION OF CAPACITY* SIZE-CAPACITY RELATIONS
xponential size-capacity relationships are useful for
Agitators
Size
range
1–200
Capacity Exponent
unit
kW
a
0.7
E individual equipment items and for entire processing
plants. The fixed capital of a component or plant hav-
ing one capacity is scaled to that of another capacity by
Blowers, centrifugal 50–8,000 kW 0.9 using Equation (1). This practice is known popularly as
Centrifugal pumps 0.01–270 kW 0.3 the “sixth-tenths rule” because 0.6 is a common expo-
nent. Although quick and easy to use, this rule has limita-
Compressors, reciprocating 10–2,000 kW 1.0
tions. One must know, at least, the capital cost of a plant
Belt conveyors 10–50 m 0.8 or component at one capacity. The range in exponents is
Crushers 10–1,000 kg/s 0.8 quite large, so one should have experience or know cost
estimates for at least two capacities to go on.
Drum dryers 2–100 m2 0.6
The six-tenths rule is valuable for rapid order-of-magni-
Dust collectors tude plant cost estimates where inaccuracy can be toler-
Bag filter 2–1,100 m3/s 0.9 ated. It is also useful for predicting product price as a
Multicyclone 0.1–40 m3/s 0.6
function of capacity when a capital estimate is available
Electrostatic precipitators 5–1,200 m3/s 0.8 at only one rate.
Evaporators, falling-film 30–320 m2 1.0 There is a danger of extrapolating with the six-tenths
Filters, plate and frame 1–170 m2 0.75
rule beyond its range of validity. For example, accord-
ing to Equation (1), prices decrease with equipment size.
Heat exchangers, floating 10–900 m2 0.6 This is reasonable and logical. But, with precision items,
head costs level off when a certain minimum size is reached.
Jacketed vessels 1–800 m3 0.6 Savings in materials are offset by more labor required to
Electric motors 10–8,000 kW 0.9 make miniature equipment. Prices might even go up as
size decreases further, changing a to a negative number.
Refrigeration units 5–10,000 kJ/s 0.6
Extrapolation to larger capacities is risky when predic-
Vibratory screens 1–130 kW 0.6 tions “create” equipment that is too large to be fabricated
Tanks or shipped. When any maximum size is exceeded, mul-
Floating roof 200–70,000 m3 0.6 tiple equipment items become necessary and the scaling
Spherical, 0–5 barg 50–5,000 m3 0.7 exponent a becomes unity. Holland and Wilkinson avoid
*Exponents were determined from slopes of the curves in our collection of data this problem by specifying the size range (Ref. [2], Table
found in Figures 3–61 of Chapter 5, Ref. [1]. Results are included here primar- 9–50) for which Equation (1) is valid. You are safe using
ily for illustration. It is much better to use the curves themselves in a cost
estimate. graphs such as Figure 2 if you stick with existing curves
and don’t extrapolate. ❏
same type of equipment in the same capacity. The volume of tank u is Costs of tanks are proportional not to
year but of capacity or size u. In the the volume, however, but to surface
twin taxicab example, u is 4, v is 8, and (2) area or the quantity of metal plate used
the size exponent a is unity. Although in fabrication. The area of tank u is
a is 1 for multiple taxicabs, it is usu- The volume of tank v can be similarly
(4)
ally less than unity when relating cost expressed. Dividing Equation (2) by
to size in a bus or van. its analog for tank v, the volume or ca- The area ratio of v versus u is
The same is true for chemical process pacity ratio is
equipment. This is easily demonstrated (5)
by comparing costs of two storage (3)
tanks. Assume they are spherical, made
of identical materials, but of different At Cs dollars per square meter of tank
CHEMICAL ENGINEERING WWW.CHE.COM APRIL 2009 47
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Cost index, I
Their relative cost, found by combin- 900
800
ing Equations (6) and (7), is Chemical Engineering
700
Plant Cost Index
600
(8)
500
200
and substituted into Equation (8) to US Bureau of Labor Statistics-
yield Hourly Earning Index
(Chemical & Allied Products)
(10)
100
1970 1980 1990 2000 2010 2020
Comparing Equations (1) and (10), Year
we see that the size exponent a is 2/3. FIGURE 1. A history of selected cost indices pertinent to chemical processing
In other words, doubling the size of a
spherical storage tank increases its TABLE 2. TYPICAL COSTS ASSOCIATED WITH PURCHASE AND
price by about 60%. INSTALLATION OF A HEAT EXCHANGER* IN A PROCESS MODULE
Exponents for various individual
Direct Project Expenses Cost Fraction of f.o.b. **
equipment items are listed in Table 1. equipment
For our purposes, the form of Equa-
Direct materials
tion (1) is more important than the ex-
pression itself. It tells us that plotting Equipment f.o.b. price, CP $10,000 1.0CP
capacity versus cost on log-log coordi- Materials used for installation 7,100 0.71CP
nates will yield a straight line of slope Direct labor 6,300 0.63CP
a. That is the basis for the format of Total direct materials and labor $23,400 2.34CP
Figure 2. Plots such as this one have
several advantages over equations. Indirect Project Expenses
1. The range of valid sizes is defined by Freight, insurance, taxes 1,400 0.14CP
lengths of curves. Construction overhead 4,400 0.44CP
2. Exponent a can be estimated by a Contractor engineering expenses 2,600 0.26CP
quick glance at the curves (45 deg. Total indirect project costs $ 8,400 0.84CP
slope represents an exponent of 1.0,
Bare module capital, CBM $31,800 3.18CP
for example; 30 deg. an exponent of
about 0.6, and so on). Contingency and Fee
3. Changes in a are visually obvious Contingency 4,800 0.48CP
through curvature of a line. Fee 1,000 0.10CP
(Fee-based software, such as that de-
Total contingency and fee $ 5,800 0.58CP
scribed in Ref. [3] can be used when
machine computation is preferred Total module capital $37,600 3.76CP
*Purchase price, $10,000; ** f.o.b. = free on board
over reading from a chart.)
Adjusting for inflation/deflation Index, and Salary Survey Index are For example, if the purchase price of
Predesign estimates are usually made indicators of inflationary trends in the equipment of capacity v in year r is
for products of the future but must general economy. Similar indices are CP,v,r, its price in year s is:
be assembled from prices of the past. available for chemical engineers to
Because of inflation or deflation, the scale equipment capital from one time (11)
price of a pump or filter will change as period to another.
it sits on a warehouse shelf. The Con- To use an inflation index, I, sim-
sumer Price Index, Wholesale Price ply include its ratio in Equation (1). A predicted cost index for year s is
48 CHEMICAL ENGINEERING WWW.CHE.COM APRIL 2009
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6
10
Shell and Tube Heat Exchangers
CE Plant Cost Index = 400 (Jan - 2004)
Multiple double-pipe
5
10 Floating head
Teflon tube
Scraped-wall
Purchased equipment cost, Cp ($)
3 Double-pipe Hairpin
10
multitube
All Except Teflon Tube Teflon Tube
Shell /Tube FM Shell F M
cs/cs 1.00 cs 1.0
cs/Cu 1.25 Cu 1.2
Cu/Cu 1.60 ss 1.3
2
10 cs/ss 1.70 Ni 1.4
ss/ss 3.00 Ti 3.3
cs/Ni 2.80 Max. pressure,
Ni/Ni 3.80 7 bara
a cs/Ti 7.20 F p = 1.0
CBM = CP x FBM
Ti/Ti 12.0
10
0.1 1 10 100 1,000 10,000
Exchanger surface area, A (m2)
FIGURE 2. Purchased equipment costs for shell-and-tube and double-pipe heat ex-
a
changers. Bare module factors FBM are obtained from Figure 4 using material factors
given here and pressure factor Fp from Figure 3 (cs = carbon steel, ss = stainless steel)
divided by its historic value for year r becomes shrouded with piping, struc-
to form the escalation ratio. tural steel, insulation, instruments,
A number of different indices are and other paraphernalia to form a pro-
used by cost engineers. Three of them, cess module. Because of these added
developed specifically for chemical and steps, installed cost is several times
petroleum plants, are illustrated in greater than purchase price.
Figure 1. The Nelson-Farrar index ap- To obtain overall plant capital costs,
plies particularly to petroleum refinery one can sum purchase prices for all
construction, whereas the Marshall & the equipment items on the flowsheet
Swift (M&S) and Chemical Engineer- and multiply the total by a so-called
ing (CE) indices are overall chemi- Lang factor. In a paper mill, where the
cal industry averages. Up-to-date precise, high-speed machinery is ex-
M&S and CE values are published pensive, a larger fraction of total cost
monthly on the “Economic Indicators” is invested in the original purchase.
page of Chemical Engineering (see Installation, though costly, is a smaller
p. 72), where trends, historic values, fraction of purchase price than for
and other economic data are also dis- pumps and heat exchangers. Thus, the
played. That page is reprinted as the Lang factor itself is relatively small
last of each issue, changing as newer for a paper mill, about 2.5.
data accumulate. Because of its acces- In an oil refinery, process vessels and
sibility and accuracy, the Chemical En- equipment themselves are somewhat
gineering Plant Cost Index (CEPCI) is simpler, but installation of piping, in-
favored by us. (Further information on sulation, and instruments is more ex-
the CEPCI can be found in Ref. [4–8].) pensive, creating a larger Lang factor.
Holland and Wilkinson (pp. 9–68 of
Installation costs Ref. [2]) recommend values of 3.8 for
From plots such as Figure 2, one can a plant that processes primarily solids
determine purchase prices, CP,v,r, for (for instance, a cement plant); 4.1 for a
major equipment items that appear process containing both solid and fluid
on a process flow diagram. But, each streams (a fertilizer plant, perhaps),
item must be transported to the site and 4.8 for a fluid processing plant
and placed on a foundation where it such as an oil refinery.
Circle 44 on p. 70 or go to adlinks.che.com/23013-44
1.5
Feature Report
Guthrie [9, 10] proposed individ- High pressure on shell side alone
ual “module factors,” unique to each or both tube and shell side
Pressure factor, Fp
equipment type. We like this tech-
nique because it is accurate, direct,
and relatively easy to use. In essence,
Guthrie’s approach is an efficient and
accurate way to synthesize a Lang fac-
tor for any process.
For estimates of pre-design accu-
racy, one merely needs appropriate
installation factors. Cost charts that High pressure
on tube side only
include prices and installation factors
for any equipment likely to be found
on a chemical engineering flow sheet
are provided in Figures 3–61 of Ch. 5, 1.0
Ref. [1]. 10 100
Pressure, p (barg)
Installation expenses for a heat
exchanger are listed in Table 2. In FIGURE 3. Pressure factors (ratio of purchase price of a high pressure heat ex-
this case, the bare module value of a changer to one designed for conventional pressures)
$10,000 heat exchanger is $31,800. Its
bare module installation factor FBM is sources such as Ref. [1] where installa- heat transfer surface area contributes
therefore 3.18. tion factors are provided. Look, for ex- to capital cost. We find the January
It should be emphasized that one ample, at Figures 2, 3 and 4. Assume 2004 purchase price, CP, to be $10,000
need not go through the process de- we need to estimate what a floating from Figure 2. If shell and tubes are
scribed in Table 2 to use cost data from head heat exchanger having 50 m2 made of carbon steel, FM is 1.0 from
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50 CHEMICAL ENGINEERING WWW.CHE.COM APRIL 2009
Descargado por Leonor Jiménez Montes (96leo06jm28@gmail.com)
lOMoARcPSD|5382783
30
25
Bare module factor, FBM
a
20
15
10
0
0 5 10 15 20
Pressure factor-material factor product, Fp x FM
FIGURE 4. Bare module factors are a function of material and pressure factors for
heat exchangers
the list in the lower right from Figure Severe or extreme service
2. If service pressure is below 10 barg, With compatible process streams,
the pressure factor, FP, is also 1.0, carbon steel is normally the most eco-
and, of course, their product FP FM nomical material from which to make
is unity. For this value of the abcissa, chemical equipment. But, corrosion,
one reads a bare module installation erosion, and other harsh conditions,
cs
factor FBM of 3.18 from the ordinate of often demand more expensive alloys.
Figure 4. Thus, the heat exchanger’s Extreme temperatures and pressures
contribution to the cost of its process sometimes require extra-heavy vessel
module is $10,000 3.18 = $31,800 walls or special materials.
(the value derived in Table 2.) To reflect demanding service condi-
tions, we developed special correction
a
Contingency and fee factors (denoted FBM ) that are listed in
To obtain total module cost, that is, the our cost charts. The purchase price of
total expense required to procure and an equipment item fabricated from the
install the heat exchanger in the bat- most common or base material (usually
tery limits and to make it ready for op- carbon steel) is multiplied by this spe-
eration, contingency and fee must be cial bare module factor to yield the in-
added. These, according to Guthrie’s stalled price of equipment constructed
data, are 15% and 3% of bare module from the material in question.
capital, respectively. Thus, as illus- We describe how special bare mod-
trated in Table 2, the cost of a $10,000 ule factors are derived for piping in
heat exchanger, after installation, is Ref. [11]. Figures 3 and 4 were devel-
$37,600 (3.18 1.18 = 3.76 times the oped for heat exchangers in a similar
purchase price). way. By following the path described
in Figures 2, 3 and 4, one finds that
ss
Auxiliary facilities FBM for a stainless-steel shell-and-
To derive the contribution of a heat tube exchanger is 5.8 (below 10 barg
exchanger to a grass-roots plant, its service pressure). Thus, the 2004 bare
share of site development, auxiliary module cost of a 50 m2 floating head
building, and offsite capital must be exchanger is $10,000 5.8 = $58,000
considered. Guthrie recommends an if constructed of stainless steel. With
added 30% above total module capi- a current CE Plant Cost Index in the
tal for auxiliaries. Thus, the capital range of 550, the bare module capital
cost associated with a $10,000 heat of that heat exchanger today will be
exchanger in a grass-root plant is es- approximately $58,000 (550/400) =
timated to be approximately $49,000. $80,000.
The appropriate Lang factor is thus
4.9, near the number recommended Summary and application
in Perry (pp. 9–68, Ref. [2]) for a fluid With more than 30 years experience
processing plant. teaching process design and econom-
Feature Report
Authors
Gael D. Ulrich (34R Prent-
iss St., Cambridge, MA
02140-2241; Email: gaelulrich
ics, we find that of the time and effort your path is likely to become more di- @gmail.com) is professor
required by students to estimate a rect and efficient. Even people in tech- emeritus of chemical engi-
neering at the University of
manufacturing cost, about 90% is con- nical service or sales will do their jobs New Hampshire, where he
sumed preparing a PFD and defining better when they understand the key joined the faculty in 1970.
He worked at Atomics Inter-
capital cost. Now that you have read factors that control expenses in their national Div. of North Ameri-
this article, we suggest that you apply business. In doing this exercise you can Aviation and Cabot Corp.
prior to entering teaching. He
your learning to a project near at hand. may discover you have been spending holds a B.S.Ch.E. and an M.S.Ch.E. from the
University of Utah and an Sc.D. from the Mas-
Define the capital and go the extra time on a worthless project and move sachusetts Institute of Technology. For the past
10% to estimate manufacturing eco- on to generating some of that gold you forty years, he has consulted for a number of
corporations and presided over a small contract
nomics for the product or process that are worth. ■ research firm for ten. Material in this article was
pays your salary. If you do research, Edited by Gerald Ondrey extracted from Ref. [1] published with coauthor
P. T. Vasudevan in 2004.
Palligarnai T. Vasudevan
References is Robert C. Davison profes-
sor of chemical and environ-
1. Ulrich, G.D. and Vasudevan, P.T., “Chemical 6. Matley, J., CE Plant Cost Index – Revised, mental engineering at the
Engineering Process Design and Economics, Chem. Eng., pp. 153–156, April 19, 1982. University of New Hamp-
A Practical Guide,” 2nd edition, Process Pub- 7. Matley, J. (1985), CE Cost Indexes Set Slower shire (Chemical Engineering
lishing (ulrichvasudesign.com), 2004. Pace, Chem. Eng., pp. 75-76 (April 29, 1985. Department, Kingsbury Hall,
2. Perry, J. H., Green, D.W. and Maloney, J.O., Rm W301, 33 College Road,
8. Vatavuk, W.M., “Updating the CE Plant Durham, NH 03824; Phone:
“Chemical Engineers’ Handbook, 7th Edi- Cost Index, Chem. Eng., pp. 62–70, January,
tion, McGraw-Hill, New York, 1997. 603-862-2298; Email: vasu@
2002. unh.edu) where he joined the
3. Vasudevan, P.T., and Agrawal, D., A Software 9. Guthrie, K.M., Data and Techniques for Pre- faculty in 1988. He worked
Package for Capital Cost Estimation, Chem. liminary Capital Cost Estimation, Chem. for a large petrochemical company for seven
Eng. Educ., 33, pp. 254–256, 1999. Eng., pp. 114–142, March 24, 1969. years prior to entering teaching. For the past 26
4. Hall, R.S., Matley, J., and McNaughton, K.J., 10. Guthrie, K.M., “Process Plant Estimating, years, he has worked in the areas of catalysis
Current Costs of Process Equipment, Chem. Evaluation and Control,” Craftsman, Solano and biocatalysis. He is currently collaborating
Eng., pp. 80–116, April 5, 1982. Beach, California, 1974. with researchers in Spain in the areas of hy-
5. Kohn, P.M., CE Cost Indexes Maintain drodesulfurization and enzyme catalysis. Va-
11. Ulrich, G.D. and Vasudevan, P.T., Short-cut sudevan holds a B.S.Ch.E. from Madras, India,
13-Year Ascent, Chem. Eng., pp. 189–190, Piping Costs, Chem. Eng., pp. 44–49, March
May 8, 1978. a M.S.Ch. E. from SUNY at Buffalo and a Ph.D.
2006. Ch.E. from Clarkson University.
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