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    Equipment Cost Estimation

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    Laras Wuri D.
    1. The document discusses methods for estimating equipment costs using charts that plot cost versus size. The charts provide exponents that relate the cost of one size to another. 2. Inflation is accounted for using cost indexes like the Chemical Engineering Plant Cost Index. The CE Index allows adjusting the cost to a target date using monthly surveyed inflation data. 3. An example calculation is shown to estimate the purchased and installed costs of a tray column for a petrochemical plant using the information from the cost charts.

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    Equipment Cost Estimation

    Uploaded by

    Laras Wuri D.
    593 views3 pages
    1. The document discusses methods for estimating equipment costs using charts that plot cost versus size. The charts provide exponents that relate the cost of one size to another. 2. Inflation is accounted for using cost indexes like the Chemical Engineering Plant Cost Index. The CE Index allows adjusting the cost to a target date using monthly surveyed inflation data. 3. An example calculation is shown to estimate the purchased and installed costs of a tray column for a petrochemical plant using the information from the cost charts.

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    1. The document discusses methods for estimating equipment costs using charts that plot cost versus size. The charts provide exponents that relate the cost of one size to another. 2. Inflation is accounted for using cost indexes like the Chemical Engineering Plant Cost Index. The CE Index allows adjusting the cost to a target date using monthly surveyed inflation data. 3. An example calculation is shown to estimate the purchased and installed costs of a tray column for a petrochemical plant using the information from the cost charts.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    593 views3 pages

    Equipment Cost Estimation

    Uploaded by

    Laras Wuri D.
    1. The document discusses methods for estimating equipment costs using charts that plot cost versus size. The charts provide exponents that relate the cost of one size to another. 2. Inflation is accounted for using cost indexes like the Chemical Engineering Plant Cost Index. The CE Index allows adjusting the cost to a target date using monthly surveyed inflation data. 3. An example calculation is shown to estimate the purchased and installed costs of a tray column for a petrochemical plant using the information from the cost charts.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    c 

          
    
    
     
       
    
     

    Cost data are stated as purchased, delivered, or installed cost. 


    ! " !  is the price of the
    equipment FOB (free on board) at the manufacturerǯs plant. Purchased cost includes material,
    design type, design pressure, capacity, etc.  " !  is the price of the equipment plus
    delivery charges to the purchaserǯs plant FOB. Shipping, customs, packing, and another
    transportation cost is included here. #  "!  means the equipment item has been purchased,
    delivered, uncrated, and placed on a foundation in an operating department. This cost depends on
    the equipment. In common, the cost includes things like freight, crane service, foundations and
    supports, all labor, electrical, switch gear and controls, starters, etc.

    For preliminary estimation of equipment cost, estimating charts have been used by many chemical
    engineers to provide rough approximation. Even though it has many limitations compared to
    Dzdetailed engineering designdz, it serves a useful purpose for most chemical engineers. The curve is
    plotted as cost versus size data, mean that predicting the cost of another size is allowed as long as
    the information of specific size is known.

    To use the diagram, there are some indicators that must be considered:
    1. Size factoring exponents
    This is the main information obtained from the diagram.

    ‫ ʹ݁ݖ݅ݏ‬௦௜௭௘௘௫௣௢௡௘௡௧
    ܿ‫ ʹ݁ݖ݅ݏݐݏ݋‬ൌ ܿ‫ ͳ݁ݖ݅ݏݐݏ݋‬൬ ൰
    ‫ͳ݁ݖ݅ݏ‬

    The exponents are the slope of the cost versus size lines and given under each chart. DzSizedz
    here is related to parameter chosen that affect cost primarily, such as cubic feet of gas per
    minute for compressor while the others have chosen horse power. This is depends on
    author.

    2. Inflation cost indexes


    It is defined as inflation indicator made specifically for the chemical industry to correct the
    cost of each piece of equipment to the required date. The factor is known as Chemical
    Engineering Plant Cost Index (CE Index).

    ‫ݔ݁݀݊ܫܧܥ‬ǡ ‫݁ݐܽ݀ݎݑ݋ݕ‬
    ݁‫ ݁ݐܽ݀ݎݑ݋ݕݐܽݐݏ݋ܿݐ݊݁݉݌݅ݑݍ‬ൌ ݄ܿܽ‫ ݐݏ݋ܿݐݎ‬ൈ 
    ‫ݔ݁݀݊ܫܧܥ‬ሺ݂‫ݐݎ݄ܽܿ݉݋ݎ‬ሻ

    CE Index is composed of four components, weighted as follow: equipment, machinery, and


    supports (61%), erection and installation factor (22%), buildings, material, and labor (7%),
    and engineering and supervision (10%). This information is based on monthly survey and
    produced as yearly figure (average value).

    Besides CE, there are another indexes that can be used like Marshall and Swift Cost Index
    (M&S), Nelson and Farrel Index (NF), Engineering News Record Index (ENR), etc. The choice
    of index to use is based upon the industry in which the person works. For general
    construction, ENR is preferred, but NF Index is more accepted in petroleum or
    petrochemical business.

    3. Installation factor


    This factor includes estimation of total cost to purchase the equipment until it is installed
    and ready to run. Installation factor has included freight, crane service, foundations and
    supports, all labor, electrical, switch gear and controls, starters, etc. It would not only cover
    the actual mounting of the equipment itself without any of its support of auxiliary
    equipment.

    ܿ‫ ݈݁ݑ݀݋݈݈݉݀݁ܽݐݏ݄݊݅݁ݐ݂݋ݐݏ݋‬ൌ ‫ ݁ܿ݅ݎ݌݁ݏ݄ܽܿݎݑ݌‬ൈ ݅݊‫ݎ݋ݐ݂ܿܽ݊݋݅ݐ݈݈ܽܽݐݏ‬

    This factor can be seen under the estimation diagram.

    4.
    odule factor
    Almost similar with installation one, but module factor also includes all of the adjacent
    minor equipment and connections. This factor can be seen under the estimation diagram.

    ܿ‫ ݈݁ݑ݀݋݈݈݉݀݁ܽݐݏ݄݊݅݁ݐ݂݋ݐݏ݋‬ൌ ‫ ݁ܿ݅ݎ݌݁ݏ݄ܽܿݎݑ݌‬ൈ ݉‫ݎ݋ݐ݂݈ܿܽ݁ݑ݀݋‬

    For more application details about the estimation diagram, see example below.
    . Purchased cost calculation

    A petrochemical company has to do routine shut down for maintenance and quality
    inspection in one of its plant. There are equipments that must be replaced with new ones;
    one of them is tray column. It has 15 trays and diameter of 6 ft. It is constructed from 347
    stainless and bubble cap type. Tray type is turbo grid.

    In estimation diagram, the first information that can be obtained is the cost per tray. For
    column diameter about 6 ft, the cost is approximately $1000 (bubble cap). From the
    diagram it also can be seen that bubble cap type is more expensive than valve-trough one.
    After that, the calculation of final purchased cost is considered factor of material, type, and
    total of trays.

    ‫ ݐݏ݋ܿ݀݁ݏ݄ܽܿݎݑ݌‬ൌ ̈́ͳͲͲͲ ൈ ݊‫ ݎ݋ݐ݂ܿܽݎܾ݁݉ݑ‬ൈ ‫ ݎ݋ݐ݂ܿܽ݁݌ݕݐݕܽݎݐ‬ൈ ݉ܽ‫ݎ݋ݐ݂݈ܿܽܽ݅ݎ݁ݐ‬


    ‫ ݐݏ݋ܿ݀݁ݏ݄ܽܿݎݑ݌‬ൌ ̈́ͳǡͲͲͲ ൈ ͳǤʹͷ ൈ ͲǤͺ ൈ ʹǤͳ ൌ ̈́ʹͳͲͲ/tray
    Because total of trays are 11, the cost above is multiply by 11.

    ‫ ݏ݊݉ݑ݈݋ܿݕܽݎݐ݂݋ݐݏ݋ܿ݀݁ݏ݄ܽܿݎݑ݌‬ൌ ̈́ʹ͵ǡͳͲͲ

    This data is based on factors that were published in 1987, so that the cost should be
    corrected by inflation cost index to fit the current date. The index of year 1987 is 320, but
    the same index is not provided for year 2010. It can be assumed that the value is about 400.

    ͶͲͲ
    ݁‫ ͲͳͲʹݐܽݐݏ݋ܿݐ݊݁݉݌݅ݑݍ‬ൌ ̈́ʹ͵ǡͳͲͲ ൈ ൌ ̈́૛ૡǡ ૡૠ૞
    ͵ʹͲ

    R. Installed cost calculation


    To calculate installed cost of the tray column, just follow the procedure that has been
    explained before.

    ܿ‫ ݈݁ݑ݀݋݈݈݉݀݁ܽݐݏ݄݊݅݁ݐ݂݋ݐݏ݋‬ൌ ̈́ʹͺǡͺ͹ͷ ൈ ͳǤʹ ൌ ̈́૜૝ǡ ૟૞૙

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