Chapter 3 COST ESTIMATION
Details About Various Components Costs in FCI
(1) Purchased Equipment: Cost is important for pre-design cost estimate Sources of equipment prices, methods of adjusting prices for capacity, methods of estimating auxiliary process equipment, should be known 3 major types of equipments---(i) Processing equipments (ii) Raw materials storage and handling equipments (iii) Finished products storage and handling equip. 1st source To get accurate costs----Bids from fabricators and suppliers Fabricator’s estimates --- quick and accurate 2nd source to get costs ---- files of past purchase orders; but to be corrected to current cost index 3rd source to get costs --- Engineering Journals Estimation of equipment cost by Scaling --- useful when no cost data related to particular size of operational capacity is available; Logarithmic Relation – Six-Tenth Factor Rule is used Consider equipment, ‘a’ and ‘b’ --- same type but of different capacities, then--
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Cost of Equipment ‘a’ = Cost of equipment ‘b’ × (capacity of ‘a’ / capacity of ‘b’)0.6
Log-log plot of capacity v/s equipment cost --straight line with slope 0.6 Factor 0.6 --- to be used in absence of other information Cost-capacity concept --- should not be used beyond 10 fold range of capacity; care to be taken – both equipments are similar w.r.t. construction type, MOC, operating T & P, other pertinent variables ( Refer Table-3, CH-6, Timmerhaus --- Values of Cost Indexes for different types in different years; Table- 5, CH-6, Timmerhaus --- Typical exponent values for equipment cost v/s capacity ) Typical cost ---- 15 to 40% of FCI
(2) Purchased Equipment Installation: Involves costs for --- labor, foundations, supports, platforms, construction expenses, others directly related to erection of equip Cost – 25 to 55% of purchased equip cost ( Refer Table-6, CH-6, Timmerhaus – Installation costs for various equip as % of purchased equip cost; Refer Table-7, CH-6, Timmerhaus – Typical exponents for equipment installation labor cost v/s size;
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If exponent = 0 --- labor cost is independent of equip size e.g. tubular heat exchanger --- installed by cranes --- doesn’t matter with size or weight of equip If exponent = higher value – increasing complexity in installation e.g. carbon-steel tower --- increase in tower diameter, increases complexity in its internals (trays, down comers, etc.)
(3) Insulation Cost: Insulation factor --- important during extreme high or low Temperature Cost of Insulation for Equip and piping --- included under headings – equipment installation and piping cost resp. Involves – labor & material cost for insulation 8 to 9% of purchased equip cost or 2% of TCI
(4) Instrumentation & Control: Includes --- instrument costs, installation labor cost, auxiliary equip & material cost Amount of control required – decides total instrumentation cost 6 to 30% of purchased equip cost; may go to 50 to 70% for complex systems; in chemical plants normally it is 13% 3% of TCI Computer controls – increase instrumentation cost
(5) Piping: 3
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Includes --- costs for labor, valves, fittings, pipe, supports, etc. Includes – piping for – raw mat, intermediate product, finished product, steam, water, air, sewer & other processes 80% of purchased equip cost or 20% of FCI Its correct estimation requires --- detailed piping and flow sheet drawings Labor cost for installation of piping – 40 to 50% of total installed cost of piping Material & labor cost for pipe insulation --- 15 to 25% of total installed cost of piping Piping cost – greatly influenced by extreme T conditions of process streams Table for rough estimate of piping cost based on process plant type: ( Table -8, CH-6, Timmerhaus)
Type of % of purchased equip process Material Labor Total plant Solid 9 7 16 Solid-fluid 17 14 31 Fluid 36 30 66
% of FCI
4 7 13
(6) Electrical Installation: Includes --- costs for --- installation labor & materials for power, lighting, building service lights
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Electrical installations – major 4 components (refer table below) For ordinary chemical plant – 10 to 15% of purchased equip cost ( go up to 40% for specific projects; 3 to 10% of FCI Table for component electrical costs as % of total electrical costs ( Table-9, CH-6, Timmerhaus)
Component Power wiring Lighting Transformation & service Instrument control wiring
Range % Typical value % 25 – 50 40 7 – 25 12 9 – 65 40 3-8 5
(7) Building including Services: Includes – expenses for – labor, materials & supplies for erection of all buildings, plumbing, HVAC, lighting, etc 10 & 11% of purchased equip cost & FCI resp ( Table-10, CH-6, Timmerhaus; Cost of building including services as % of purchased equip cost
Type of process % of purchased equip cost plant New plant New unit Expansion at new site at existing at existing site site Solid 68 25 15 Solid-fluid 47 29 7 Fluid 45 5 - 18 6 5
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(8) Yard Improvements: 10 to 20% of purchased equip cost; 2 to 5% of FCI ( Table-12, CH-6, Timmerhaus, Yard improvement costs as % of FCI)
Yard improvement Range % Typical value% Site clearing 0.4 – 1.2 0.8 Roads & walks 0.2 – 1.2 0.6 Railroads 0.3 – 0.9 0.6 Fences 0.1 – 0.3 0.2 Yard & fence lighting 0.1 – 0.3 0.2 Parking areas 0.1 – 0.3 0.2 Landscaping 0.1 – 0.2 0.1 Other improvements 0.2 – 0.6 0.3 (9) Service Facilities: 30 to 80% of purchased equip cost Service facilities are function of plant physical size ( Table – 13, CH-6, Timmerhaus )
Service Facilities
Range % of Typical value FCI % of FCI 2.6 – 6.0 3.0 0.2 – 2.0 1.0 0.4 - 3.7 1.8 0.5 – 2.1 1.3 0.1 – 2.0 0.8 0.9 – 2.6 1.3
Steam generation Steam distribution Water supply, cooling, pumping Water treatment Water distribution Electric substations 6
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Electric distribution Gas supply & distribution Air compression & distribution Refrigeration 7 distribution Process waste disposal Sanitary waste disposal Communications Raw materials storage Finished product storage Fire-protection system Safety installation
0.4 – 2.1 0.2 – 0.4 0.2 – 0.3 1.0 – 3.0 0.6 – 2.4 0.2 – 0.6 0.1 – 0.3 0.3 – 3.2 0.7 – 2.4 0.3 – 1.0 0.2 – 0.6
1.0 0.3 1.0 2.0 1.5 0.4 0.2 0.5 1.5 0.5 0.4
(10) Land: Cost of land + surveys & fees – depnds upon property’s location 4 to 8% of purchased equip cost; 1 to 2% of TCI Land value – doesn’t decrease with time; so its cost should not be included in FCI while estimating certain annual costs like depreciation
(11) Engineering & Supervision: Is indirect cost in FCI 30% of purchased equip cost; 8% of total direct costs ( Table – 14, CH-6, Timmerhaus
Engineering component Engineering Drafting Purchasing
&
supervision Range % of Typical FCI value % 1.5 – 6.0 2.2 2.0 – 12.0 4.8 0.2 – 0.5 0.3 7
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Accounting, construction, cost engineering Travel & living Reproduction & communications Total engineering & supervision
0.2 – 1.0
0.3
0.1 – 1.0 0.2 – 0.5 4 - 21
0.3 0.2 8.1
(12) Construction Expenses: Part of Indirect costs 10% of total direct costs ( Table – 15, CH-6, Timmerhaus)
Component
Range % of Typical FCI value% & 1.0 – 3.0 1.7
Temporary construction operations Construction tools & rental Home office personnel in field Field pay roll Travel & living Taxes & insurance Start up materials & labor Overhead Total construction expenses
1.0 – 3.0 0.2 – 2.0 0.4 – 4.0 0.1 – 0.8 1.0 – 2.0 0.2 – 1.0 0.3 – 0.8 4.2 – 16.6
1.5 0.4 1.0 0.3 1.2 0.4 0.5 7.0
(13) Contractor’s Fees: Vary for different situations 2 to 8% of direct plant costs; 1.5 to 6% of FCI
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(14) Contingencies: Included in capital cost estimation to compensate for – unpredictable events, like storms, floods, strikes, price changes, small design changes, errors in estimation, other unforeseen expenses 5 to 15% of direct & indirect plant costs Average value is 8%
(15) Start-up Expenses: After complete construction of plant, frequently changes are made before plant can operate at maximum design conditions Changes involve — expenses for materials & equip As high as 12% of FCI; 1 time expenses only in 1st year of operation
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