CHAPTER 7

Estimation of Capital Costs

KMM 422E
2024 Spring

Prof.Dr. Hale GÜRBÜZ

12/02/2024
 Introduction
1. Estimating Capital Cost: money to build a new chemical
plant
2. Estimating Operating Cost: money to operate a chemical
plant
3. Estimating Process Profitability: several distinct types of
composite values which combine capital and operating cost
4. Selecting a “best process” from competing alternatives
5. Estimating the economic value of making process changes
and modifications to an existing processes
6. Quantifying uncertainty when evaluating the economic
potential of a process

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Capital cost relates to the costs associated with construction
of a new plant or modifications to an existing chemical
manufacturing plant.

7.1. Classifications of Capital Cost Estimates

There are five generally accepted classifications of capital
cost estimates.
1. Detailed estimate
2. Definitive estimate
3. Preliminary estimate
4. Study estimate
5. Order-of-magnitude estimate
Different level of information are required to
perform each of these estimates
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Table 7.1. Summary of Capital Cost Estimating Classifications

Class 5: Order-of-Magnitude (also known as Ratio or

Feasibility) Estimate

Data: This type of estimate typically relies on cost

information for a complete process taken from previously
built plants.

This cost information is then adjusted using appropriate

scaling factors, for capacity, and for inflation, to provide
the estimated capital cost.

Diagrams:
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Normally requires only a block flow diagram.
Prof.Dr. Hale GÜRBÜZ
Class 4: Study (also known as Major Equipment or
Factored) Estimate
Data: List of the major equipment of the process (all
pumps, compressors and turbines, columns and vessels,
fired heaters, and exchangers).
Each piece of equipment is roughly sized and the
approximate cost determined.
The total cost of equipment is then factored to give the
estimated capital cost.
Diagrams: Based on PFD and costs from generalized
charts.
Note: Most individual student designs are in this category.
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Class 3: Preliminary Design (also known as Scope)
Estimate
Data: Requires more accurate sizing of equipment than
used in the study estimate.
In addition, approximate layout of equipment is made
along with estimates of piping, instrumentation, and
electrical requirements. Utilities are estimated.
Diagrams: Based on PFD
Includes vessel sketches for major equipment, preliminary
plot plan, and elevation diagram.
Note: Most large student group designs are in this
category.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
Class 2: Definitive (also known as Project Control)
Estimate

Data: This type of estimate requires preliminary

specifications for all the equipment, utilities,
instrumentation, electrical, and off-sites.

Diagrams: Final PFD, vessel sketches, plot plan, and

elevation diagrams, utility balances, and a preliminary
P&ID.

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Class 1: Detailed (also known as Firm or Contractor’s)
Estimate
At the end of a detailed estimate, the plant is ready to go
to the construction stage
Data:
• Complete engineering of the process and all related off-
sites and utilities.
• Vendor quotes for all expensive items will have been
obtained.
Diagrams: Final PFD and P&ID, vessel sketches, utility
balances, plot plan and elevation diagrams, and piping
isometrics (All diagrams are required to complete the
construction of the plant if it is built).
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 Table 7.2. The accuracy range and the approximate cost for
performing each class of estimate
Class of Level of Project Typical Methodology Expected Preparation
Estimate Definition Purpose of (Estimating Accuracy Range Effort
(as % of Estimate Method) (+/– Range (Relative to
Complete Relative to Best Lowest Cost
Definition) Index of 1) Index of 1)
C5 Order-of- 0% to 2% Screening or Stochastic 4 to 20 1
magnitude Feasibility (probabilistic)
estimate or Judgment
C4 Study 1% to 15% Concept Study Primarily 3 to 12 2 to 4
estimate or Feasibility Stochastic
C3 10% to 40% Budget, Mixed but 2 to 6 3 to 10
Preliminary Authorization, Primarily
estimate or Control Stochastic
C2 Study 30% to 70% Control or Primarily 1 to 3 5 to 20
estimate Bid/Tender Deterministic
C1 Detailed 50% to 100% Check Deterministic 1 10 to 100
estimate Estimate or
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Bid/Tender
 The accuracy range associated with each class of estimate and
the costs associated with carrying out the estimate are ranked
relative to the most accurate class of estimate (Class 1).
 In order to use the information in Table 7.2, it is necessary to
know the accuracy of a Class 1 estimate.
 For the cost estimation of a chemical plant, a Class 1
estimate (detailed estimate) is typically +6% to –4%
accurate  the true cost of building the plant would likely
be in the range of 6% higher than and 4% lower than the
estimated price.
 Likewise, the effort to prepare a Class 5 estimate for a
chemical process is typically in the range of 0.015% to
0.30% of the total installed cost of the plant [1,2].

12/02/2024 Prof.Dr. Hale GÜRBÜZ

 Example 7.1
 The estimated capital cost for a chemical plant using the study
estimate method (Class 4) was calculated to be $2 million. If
the plant were to be built, over what range would you expect
the actual capital estimate to vary?
Class of Level of Project Typical Methodology Expected Preparation
Estimate Definition Purpose of (Estimating Accuracy Range Effort
(as % of Estimate Method) (+/– Range (Relative to
Complete Relative to Best Lowest Cost
Definition) Index of 1) Index of 1)
Class 4 1% to 15% Concept Study Primarily 3 to 12 2 to 4
or Feasibility Stochastic

 The expected accuracy range is between 3 and 12 times that of

a Class 1 estimate.
 Class 1 estimate can be expected to vary from +6% to –4%.
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 Example 7.1
The actual expected
 Lowest Expected Cost Range range would depend
 High value for actual plant cost on the level of project
definition and effort.
($2.0 × 106)[1 + (0.06)(3)] = $2.36 × 106
 Low value for actual plant cost Effort and definition
are at the high end
($2.0 × 106)[1 – (0.04) (3)] = $1.76 × 106

 Highest Expected Cost Range

 High value for actual plant cost
($2.0 × 106)[1 + (0.06)(12)] = $3.44 × 106
 Low value for actual plant cost Effort and definition
are at the low end
($2.0 × 10 )[1 – (0.04)(12)] = $1.04 × 10
6 6

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Reason of underestimated capital costs: the failure to
include all of the equipment needed in the process.

Typically, as a design progresses, the need for additional

equipment is uncovered, and the estimate accuracy
improves.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

Example 7.2 Compare the costs for performing an order-of-
magnitude estimate and a detailed estimate for a plant that cost
$5.0 × 106 to build.

 For the order-of-magnitude estimate, the cost of the estimate is

in the range of 0.015% to 0.3% of the final cost of the plant:
Highest Expected Value: ($5.0 × 106)(0.003) = $15,000
Lowest Expected Value: ($5.0 × 106)(0.00015) = $750

 For the detailed estimate, the cost of the estimate is in the range
of 10 to 100 times that of the order-of-magnitude estimate.
For the lowest expected cost range:
Highest Expected Value: ($5.0 × 106)(0.03) = $150,000
Lowest Expected Value: ($5.0 × 106)(0.0015) = $7500
For the highest expected cost range:
Highest Expected Value: ($5.0 × 106)(0.3) = $1,500,000
Lowest Expected Value:
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($5.0 × 106)(0.015) = $75,000
Prof.Dr. Hale GÜRBÜZ
What is the cost of making an estimate?

 Capital cost estimates are essentially paper-and-pencil

studies. Therefore, it indicates the personnel hours
required in order to complete the estimate.

 Greater detail is required for the more accurate

estimating techniques.

 If greater accuracy is required in the capital cost

estimate, then more time and money must be
expended in conducting the estimate.

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What cost estimation technique is appropriate?
 Cost estimates are performed at each stage of the
evolution of a chemical process leading to the final
design and construction of a chemical plant.
 There are many tens to hundreds of process systems
examined at the block diagram level for each process
that makes it to the construction stage.
 Most of the processes initially considered are screened
out before any detailed cost estimates are made.
 Two major areas dominate this screening process: the
process must be both technically sound (reliable) and
economically attractive.

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 Preliminary feasibility estimates (order-of-magnitude or
study estimates) are made to compare many process
alternatives.
 More accurate estimates (preliminary or definitive
estimates) are made for the most profitable processes
identified in the feasibility study.
 Detailed estimates are then made for the more promising
alternatives that remain after the preliminary estimates.
 Based on the results from the detailed estimate, a final
decision is made whether to go ahead with the
construction of a plant.

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7.2. Estimation of Purchased Equipment Costs
 To obtain an estimate of the capital cost of a chemical
plant, the costs associated with major plant
equipment must be known.
 It is assumed that a PFD for the process is available
(similar to the one discussed in detail in Chapter 1-HDA
process):
 PFD includes material and energy balances with each
major piece of equipment identified
 materials of construction selected
 the size/capacity roughly estimated from conditions
on the PFD.
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7.2. Estimation of Purchased Equipment Costs
 The most accurate estimate of the purchased cost of a
piece of major equipment is provided by a current price
quote from a suitable vendor (a seller of equipment).
 The next best alternative is to use cost data on
previously purchased equipment of the same type.
 Another technique, sufficiently accurate for study and
preliminary cost estimates, utilizes summary graphs
available for various types of common equipment.
 Any cost data must be adjusted for any difference in
unit capacity and also for any elapsed time since the
cost data were generated.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

7.2.1. Effect of Capacity on Purchased Equipment Cost
 The most common simple relationship between the
purchased cost and an attribute of the equipment related
to units of capacity (Equation 7.1.)
A=Equipment cost attribute
C=Purchased cost
n= Cost exponent
a refers to equipment with the required
attribute
b refers to equipment with the base
attribute

 The equipment cost attribute is the equipment parameter

that is used to correlate capital costs.
 The equipment cost attribute is most often related to the
unit capacity, and the term capacity is commonly used to
describe and identify this
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Prof.Dr. Hale GÜRBÜZ
Table 7.3. Typical Values of Cost Exponents for a Selection of
Process Equipment
Range of Equipment Units of
Type Correlation Capacity Cost Exponent n
Reciprocating compressor
with motor drive 0.75 to 1490 kW 0.84
Heat exchanger shell and
tube carbon steel 1.9 to 1860 m2 0.59
Vertical tank carbon steel 0.4 to 76 m3 0.30
Centrifugal blower 0.24 – 71 std m3/s 0.60
Jacketed kettle glass lined 0.2 to 3.8 m3 0.48

 A description of the type of equipment used

 The units in which the capacity is measured
 The range of capacity over which the correlation is valid
 The cost exponent (values shown for n vary between 0.30 and 0.84)
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Eq. 7.1 can be rearranged to give Eq. 7.2
C a  KA an where K  C b /A nb
The log of Ca is plotted versus the log of Aa. (A straight line with
a slope of n when.)
The typical cost of a single-stage blower versus the capacity
(volumetric flowrate)The value for the cost exponent, n,
from this curve is 0.60.

Figure 7.1. Purchased Cost of a Centrifugal Air Blower

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 The value of the cost exponent, n, varies depending on the class
of equipment being represented.
 The value of n for different items of equipment is often around
0.6.
 Replacing (n) in Equation 7.1 by 0.6 provides the relationship
referred to as the six-tenths rule.
0.6
Ca  A a 
  
Cb  A b 

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Example 7.3. Use the six-tenths rule to estimate the
percentage increase in purchased cost when the capacity of a
piece of equipment is doubled.

Using Equation 7.1 with n = 0.6→Ca/Cb = (2/1)0.6 = 1.52

% increase = ((1.52 – 1.00)/1.00)(100) = 52%
This simple example illustrates a concept referred to as the
economy of scale: Even though the equipment capacity was
doubled, the purchased cost of the equipment increased by only
52%.

 Special care must be taken in using the six-tenths rule for a

single piece of equipment.
 The cost exponent may vary considerably from 0.6.
 The use of this rule for a total chemical process is more reliable
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Example 7.4. Compare the error for the scale-up of a
reciprocating compressor by a factor of 5 using the six-
tenths rule in place of the cost exponent given in Table 7.3.

 Cost ratio using six-tenths rule (i.e., n=0.60)=5.00.60 = 2.63

 Cost ratio using (n = 0.84) from Table 7.3 = 5.00.84 = 3.86

% Error = ((2.63 – 3.86)/3.86)(100) = –32 %

12/02/2024 Prof.Dr. Hale GÜRBÜZ

 Another way to think of the economy of scale is to consider the
purchased cost of equipment per unit capacity.
 Equation 7.2 Ca  KA an can be rearranged to give the following
relationship:
Ca
 Equation 7.3  KA an -1
A
 If Equation 7.3 is plotted on log-log coordinates, the resulting curve
will have a negative slope.
 The meaning of the negative
slope is that as the capacity of a
piece of equipment increases,
the cost per unit of capacity
decreases.
 This, of course, is a consequence
of n < 1 but also shows clearly
Figure 7.2. Purchased Cost per Unit of
how the economy of scale
Flowrate of a Centrifugal Air Blower
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works.
Prof.Dr. Hale GÜRBÜZ
 For many equipment types, the simple relationship in
Equation 7.1 is not very accurate, and an equation that is
second order in the attribute is used.

 It is necessary to have cost information on the equipment at

some “base case” in order to be able to determine the cost of
other similar equipment. This base-case information must
allow for the constant, K, in Equation 7.2, to be evaluated.

 This base case cost information may be obtained from a

current bid provided by a manufacturer for the needed
equipment or from company records of prices paid for
similar equipment.
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Example 7.5. The purchased cost of a recently acquired heat
exchanger with an area of 100 m2 was $10,000.

Determine:
a) The constant K in Equation 7.2
b) The cost of a new heat exchanger with area equal to 180 m2

From Table 7.3: n = 0.59

a) K = Cb/(Ab)n = 10,000/(100)0.59 = 661 {$/(m2)0.59}

b) Ca = (661)(180)0.59 = $14,100

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7.2.2. Effect of Time on Purchased Equipment Cost
 The time at which the cost data were reported (2007) is given
on the figure (Figures 7.1 and 7.2) .
 Question: How to convert this cost into one that is accurate
for the present time?
 To take changing economic conditions (inflation) into account,
it is essential to be able to update the costs taken from past
records or published correlations.

C=Purchased cost, I=Cost Index

Subscripts:1 refers to base time when cost is
known,2 refers to time when cost is desired
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 There are several cost indices used by the chemical industry
to adjust for the effects of inflation.
 Several of these cost indices are plotted in Figure 7.3.
• All indices show similar
inflationary trends with time.
• The indices most generally
accepted in the chemical
industry and reported in the
back page of every issue of
Chemical Engineering are:
• Marshall and Swift
Equipment Cost Index
Figure 7.3. The Variations in Several
Commonly Used Cost Indexes Over • Chemical Engineering
15 Years (1992–2006) Plant Cost Index.
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Table 7.4 provides values for both the Marshall and Swift Equipment Cost
Index and the Chemical Engineering Plant Cost Index from 1991 to 2006.
Table 7.4. Values for the Chemical Engineering Plant Cost Index and the Marshall and Swift Equipment Cost
Index from 1991 to 2006

Year Marshall and Swift Equipment Cost Index Chemical Engineering Plant Cost Index
1991 931 361
1992 943 358
1993 964 359
1994 993 368
1995 1028 381
1996 1039 382
1997 1057 387
1998 1062 390
1999 1068 391
2000 1089 394
2001 1094 394
2002 1104 396
2003 1124 402
2004 1179 444
2005 1245 468
2006
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 https://www.toweringskills.com/financial-analysis/cost-indices/

CEPCI

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 Unless otherwise stated, the Chemical Engineering Plant Cost
Index (CEPCI) will be used in this text to account for inflation.
 This is a composite index, and the items that are included in the
index are listed in Table 7.5.
Table 7.5. The Basis for the Chemical Engineering Plant Cost Index
Components of Index Weighting of Component (%)
Equipment, Machinery, and Supports
a. Fabricated equipment 37
b. Process machinery 14
c. Pipe, valves, and fittings 20
d. Process instruments and controls 7
e. Pumps and compressors 7
f. Electrical equipment and materials 5
g. Structural supports, insulation, and paint 10

100 61 % of total
Erection and installation labor 22
Buildings, materials, and labor 7
Engineering and supervision 10
Total 100
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12/02/2024 Prof.Dr. Hale GÜRBÜZ

Example 7.6. (The purchased cost of a heat exchanger of 500 m2 area
in 1992 was $25,000.
a. Estimate the cost of the same heat exchanger in 2006 using the
two indices introduced above.
b. Compare the results.
From Table 7.4 1992 2006
Marshal and Swift Index 943 1302
Chemical Engineering Plant Cost Index 358 500

a.
Marshal and Swift: Cost = ($25,000)(1302/943) = $34,518
Chemical Engineering: Cost = ($25,000)(500/358) = $34,916

b.
Average Difference: (($34,518 – 34,916)/(($34,518 + 34,916)/2)(100)
= –1.1%
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7.3. Estimating the Total Capital Cost of a Plant
 The capital cost for a chemical plant must take into
consideration many costs other than the purchased cost of
the equipment.
 As an analogy, consider the costs associated with building a
new home. The purchased cost of all the materials that are
needed to build a home does not represent the cost of the
home.
 The final cost reflects:
 the cost of property
 the cost for delivering materials
 the cost of construction
 the cost of a driveway
 the cost for hooking up utilities, and so on.
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7.3. Estimating the Total Capital Cost of a Plant

Table 7.6. Factors Affecting the Costs Associated with Evaluation

of Capital Cost of Chemical Plants
Factor Associated with the Installation of
Equipment Symbol Comments
1. Direct Project Expenses
a. Equipment f.o.b. cost (f.o.b. = free on CP Purchased cost of equipment at
board) manufacturer’s site.
b. Materials required for installation CM Includes all piping, insulation and
fireproofing, foundations and
structural supports, instrumentation
and electrical, and painting
associated with the equipment.
c. Labor to install equipment and CL Includes all labor associated with
material installing the equipment and
materials mentioned in (a) and (b).

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Table 7.6. Cont.

Factor Associated with the

Symbol Comments
Installation of Equipment
2. Indirect Project Expenses
Includes all transportation costs for
shipping equipment and materials to the
a. Freight, insurance, and taxes CFIT plant site, all insurance on the items
shipped, and any purchase taxes that may
be applicable.
Includes all fringe benefits such as
vacation, sick leave, retirement benefits,
etc.; labor burden such as social security
b. Construction overhead CO
and unemployment insurance, etc.; and
salaries and overhead for supervisory
personnel.
Includes salaries and overhead for the
c. Contractor engineering
expenses CE engineering, drafting, and project
management personnel on the project.
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Table 7.6. Cont.

Factor Associated with the

Symbol Comments
Installation of Equipment
3. Contingency and Fee
A factor to cover unforeseen
circumstances. These may include loss
a. Contingency CCont of time due to storms and strikes, small
changes in the design, and unpredicted
price increases.
This fee varies depending on the type of
b. Contractor fee CFee
plant and a variety of other factors.

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Table 7.6. Cont.

Factor Associated with the

Symbol Comments
Installation of Equipment
4. Auxiliary Facilities
Includes the purchase of land; grading and excavation
of the site; installation and hookup of electrical, water,
a. Site development CSite
and sewer systems; and construction of all internal
roads, walkways, and parking lots.
Includes administration offices, maintenance shop and
b. Auxiliary buildings CAux control rooms, warehouses, and service buildings (e.g.,
cafeteria, dressing rooms, and medical facility).
Includes raw material and final product storage; raw
material and final product loading and unloading
facilities; all equipment necessary to supply required
c. Off-sites and utilities COff process utilities (e.g., cooling water, steam generation,
fuel distribution systems, etc.); central environmental
control facilities (e.g., waste water treatment,
incinerators, flares, etc.); and fire protection systems.
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The estimating procedures to obtain the full capital cost of
the plant

 If an estimate of the capital cost for a process plant is

needed and access to a previous estimate for a similar plant
with a different capacity is available, then the principles
already introduced for the scaling of purchased costs of
equipment can be used.

1. The six-tenths rule (Equation 7.1 with n set to 0.6) can be

used to scale up or down to a new capacity.
2. The CEPCI should be used to update the capital costs
(Equation 7.4).

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 The six-tenths rule is more accurate in this application
than it is for estimating the cost of a single piece of
equipment.
 The increased accuracy results from the fact that multiple
units are required in a processing plant.
 Some of the process units will have cost coefficients, n, less
than 0.6. For this equipment the six-tenths rule
overestimates the costs of these units.
 In a similar way, costs for process units having coefficients
greater than 0.6 are underestimated.
 When the sum of the costs is determined, these differences
tend to cancel each other out.

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 The Chemical Engineering Plant Cost Index (CEPCI) can
be used to account for changes that result from inflation.

 The CEPCI values provided are composite values that

reflect the inflation of a mix of goods and services
associated with the chemical process industries (CPI).

 In a similar manner to the consumer price index issued

by the government, the CEPCI represents a “basket” of
items directly related to the costs associated with the
construction of chemical plants.

 The index is directly related to the effect of inflation on

the cost of an “average” chemical plant

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Example 7.7.
The capital cost of a 30,000 metric ton/year isopropanol plant
in 1992 was estimated to be $23 million. Estimate the capital
cost of a new plant with a production rate of 50,000 metric
tons/year in 2007 (assume CEPCI = 500).

Cost in 2007 =(Cost in 1992)(Capacity Correction)(Inflation

Correction)
= ($23,000,000)(50,000/30,000)0.6(500/358)
= ($23,000,000)(1.359)(1.397) = $43,644,000

In most situations, cost information will not be available

for the same process configuration; therefore, other
estimating techniques must be used.

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7.3.1. Lang Factor Technique

 The Lang Factor method is a simple technique to estimate

the capital cost of a chemical plant
 The total cost is determined by multiplying the total
purchased cost for all the major items of equipment by
a constant.
 The major items of equipment are those shown in the
process flow diagram.
 The constant multiplier is called the Lang Factor.

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 Plants processing only fluids have the largest Lang Factor,
4.74

 Plants processing only solids have a factor of 3.10.

Combination fluid-solid systems fall between these two
values.

 The greater the Lang Factor, the less the purchased costs
contribute to the plant costs.

 For all cases, the purchased cost of the equipment is less

than one-third of the capital cost of the plant.

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Example 7.8.
Determine the capital cost for a major expansion to a fluid
processing plant that has a total purchased equipment cost of
$6,800,000.

Capital Costs = ($6,800,000)(4.74) = $32,232,000

 Lang Factor estimating technique is insensitive to changes in
process configuration, especially between processes in the
same broad categories shown in Table 7.7.
 It cannot accurately account for the common problems of
special materials of construction and high operating pressures.

A number of alternative techniques are available:All

require more detailed calculations using specific price
information for the individual units/equipment.
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 7.3.1. Lang Factor Technique
Table 7.7. Lang Factors for the Estimation of Capital Cost for Chemical
Plant (from References [6, 7, 8])
Capital Cost = (Lang Factor)(Sum of Purchased Costs of All Major
Equipment)
Type of Chemical Plant Lang Factor = FLang
Fluid processing plant 4.74
Solid-fluid processing plant 3.63
Solid processing plant 3.10
The capital cost calculation is determined using Equation 7.5
n
C TM  FLang  C p,i
where
7.5 CTM is the capital cost (total module) of the plant
i 1 Cp,i is the purchased cost for the major equipment units
n is the total number of individual units
Flang is the Lang Factor (from Table 7.7)
12/02/2024 Prof.Dr. Hale GÜRBÜZ
 https://www.matche.com/equipcost/Default.html
7.3.2. Module Costing Technique
 The equipment module costing technique is a common
technique to estimate the cost of a new chemical plant.
 It is generally accepted as the best for making preliminary
cost estimates and is used extensively
 This costing technique relates all costs back to the
purchased cost of equipment evaluated for some base
conditions.
 Deviations from these base conditions are handled by
using multiplying factors that depend on the following:
1. The specific equipment type
2. The specific system pressure
3. The specific materials
12/02/2024
of construction
Prof.Dr. Hale GÜRBÜZ
7.3.2. Module Costing Technique
 Equation 7.6 is used to calculate the bare module cost for
each piece of equipment. C BM  C 0p FBM 7.6
CBM = bare module equipment cost: direct and indirect costs for
each unit
FBM = bare module cost factor: multiplication factor to account for
the items in Table 7.6 plus the specific materials of construction and
operating pressure
C 0p = purchased cost for base conditions: equipment made of the
most common material, usually carbon steel and operating at near
ambient pressures
 The bare module cost is the sum of the direct and indirect
costs shown in Table 7.6.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

7.3.3. Bare Module Cost for Equipment at Base Conditions
The conditions specified for the base case are
1. Unit fabricated from most common material, usually carbon
steel (CS)
2. Unit operated at near-ambient pressure
Equation 7.6 is used to obtain the bare module cost for the base
conditions.
For these base conditions, a superscript zero (0) is added to the
bare module cost factor and the bare module equipment cost.
Table 7.8 provides the relationships and equations for the direct,
indirect, contingency, and fee costs based on the purchased cost
of the equipment.
These equations are used to evaluate the bare module factor.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
 Table 7.8. Equations for Evaluating Direct, Indirect, Contingency, and Fee Costs
Factor Basic Equation Multiplying Factor to Be Used with Purchased Cost, Cp0
1. Direct
a. Equipment Cp 0 = Cp 0 1.0
b. Materials CM=αMCp0 αM
c. Labor CL=αL(Cp0 +CM) (1.0 + αM)αL
Total Direct CDE=Cp0 +CM+ CL (1.0 + αM)(1.0 + αL)
2. Indirect
a. Freight, etc. CFIT=αFIT(Cp0 +CM) (1.0 + αM)αFIT
b. Overhead CO = αOCL (1.0 + αM)αLαO
c. Engineering CE=αE(Cp0 +CM) (1.0 + αM)αE
Total Indirect CIDE = CFIT + CO + CE (1.0 + αM)(αFIT + αLαO + αE)
Bare Module CBM0 =CIDE+CDE (1.0 + αM)(1.0 + αL + αFIT + αLαO + αE)
3. Contingency and
Fee
a. Contingency Ccont= αContCBM0 (1.0 + αM)(1.0 + αL + αFIT + αLαO + αE)αCont
b. Fee CFee= αFeeCBM0 (1.0 + αM)(1.0 + αL + αFIT + αLαO + αE)αFee
Total12/02/2024
Module Fee (1.0
CTM=CBM0 +Ccont+CProf.Dr. + αM)(1.0 + αL + αFIT + αL αO + αE)(1.0 + αCont + α Fee)
Hale GÜRBÜZ
Column 1: Lists the factors given in Table 7.6.
Column 2: Lists equations used to evaluate each of the costs.
These equations introduce multiplication cost factors, αi. Each
cost item, other than the purchased equipment cost, introduces
a separate factor.
Column 3: For each factor, the cost is related to the
purchased cost by an equation of the form

C XX  C 0p f(α i, j, k,... ) 7.7

The function, f(αi, j, k...), is given in column 3 of Table 5.8.

The bare module factor is given by
F0BM=(1.0 + αL + αFIT + αLαO + αE) (1.0 + αM)
12/02/2024 Prof.Dr. Hale GÜRBÜZ
Example 7.9.
The purchased cost for a carbon steel heat exchanger operating at
ambient pressure is $10,000. For a heat exchanger module,
Guthrie [9, 10] provides the following cost information.
Item % of Purchased Equipment Cost
Equipment 100.0
Materials 71.4
Labor 63.0
Freight 8.0
Overhead 63.4
Engineering 23.3

Using the information given above, determine the equivalent cost

multipliers given in Table 7.8 and the following:
a. Bare module cost factor, F°BM
b. 12/02/2024
Bare module cost, C°BM Prof.Dr. Hale GÜRBÜZ
Example 7.9.
% of Purchased Cost Multiplier
Item Equipment Cost (Table 7.8) Value of Multiplier
Equipment 100.0 1.0
Materials 71.4 αM 0.714
Labor 63.0 αL 0.63/(1 + 0.714) = 0.368
Freight 8.0 αFIT 0.08/(1 + 0.714) = 0.047
Overhead 63.4 αO 0.634/0.368.(1 + 0.714) = 1.005
Engineering 23.3 αE 0.233/(1 + 0.714) = 0.136
Bare Module 329.1

F0BM=(1.0 + αL + αFIT + αLαO + αE) (1.0 + αM)

a. Using Equation 7.8,
F°BM =(1 + 0.368 + 0.047 + (1.005)(0.368) + 0.136)(1 + 0.714) = 3.291
b. From Equation 7.6,
C°12/02/2024
BM=(3.291)($10,000) = $32,910
Prof.Dr. Hale GÜRBÜZ
 We do not need to repeat the procedure in Example 7.9 in
order to estimate F°BM for every piece of equipment.
 This has already been done for a large number of equipment
modules, and the results are given (Appendix A)
 In order to estimate bare module costs for equipment,
purchased costs for the equipment at base case conditions
(ambient pressure using carbon steel) must be available along
with the corresponding bare module factor and factors to
account for different operating pressures and materials of
construction.
 These data are made available for a variety of common
gas/liquid processing equipment (Appendix A)

12/02/2024 Prof.Dr. Hale GÜRBÜZ

Example 7.10.
 Find the bare module cost of
a floating-head shell-and-
tube heat exchanger with a
heat transfer area of 100 m2 at
the end of 2006.
 The operating pressure of the
equipment is 1.0 bar, with
both shell-and-tube sides
constructed of carbon steel.
 The cost curve for this heat
exchanger is given in log-log plot of cost per unit area
versus area is nonlinear.
Appendix A, Figure A.5. In general this will be the case, and a
second order polynomial is normally
used to describe this relationship.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
 Example 7.10.
 From Figure
Cp0(2001)=($250)(100)= $25,000
 The bare module cost for shell-and-tube heat
exchangers is given by Equation A.4
CBM = CP°[B1+B2FPFM] (A4)
The values of B1 and B2 for floating-head heat exchangers
from Table A.4 are 1.63 and 1.66, respectively.
The pressure factor is obtained from Equation A.3
log10 FP = C1 + C2 log10 P + C3 (log10 P)2 (A.3)
From Table A.2, for pressures <5 barg, C1 = C2 = C3 = 0
From Equation A.3, Fp = 1.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
12/02/2024 Prof.Dr. Hale GÜRBÜZ
Table A.2,

Using data in Table A.3 for shell-and-tube heat exchangers with both
shell and tubes made of carbon steel (Identification Number = 1) and
Figure A.8, FM = 1.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

12/02/2024 Prof.Dr. Hale GÜRBÜZ
 Substituting this data into Equation A.4 gives
CBM = CP°[B1+B2FPFM](A4)
C0BM (2001)= CP°(2001)[1.63+1.66(FP =1)(FM =1)]=3.29 CP°
C0BM (2001)=3.29 (25,000)=$82,300
C0BM (2006)= C0BM (2001)(500/397)=$103,590

12/02/2024 Prof.Dr. Hale GÜRBÜZ

 CAPCOST

12/02/2024 Prof.Dr. Hale GÜRBÜZ

12/02/2024 Prof.Dr. Hale GÜRBÜZ
12/02/2024 Prof.Dr. Hale GÜRBÜZ
12/02/2024 Prof.Dr. Hale GÜRBÜZ
7.3.4. Bare Module Cost for Nonbase Case Conditions
 For equipment made from other materials of construction
and/or operating at nonambient pressure, the values for FM
and FP are greater than 1.0.
 In the equipment module technique, these additional costs
are incorporated into the bare module cost factor, FBM. The
bare module factor used for the base case, F0BM , is replaced
with an actual bare module cost factor, FBM, in Equation 7.6.
C BM  C 0p FBM 7.6

 The information needed to determine this actual bare module

factor is provided in Appendix A.
 The effect of pressure on the cost of equipment is considered
first.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
Pressure Factors
 As the pressure at which a piece of equipment operates
increases, the thickness of the walls of the equipment will
also increase.
 For example, consider the design of a process vessel. Such
vessels, when subjected to internal pressure (or external
pressure when operating at vacuum) are subject to rigorous
mechanical design procedures.
 For the simple case of a cylindrical vessel operating at
greater than ambient pressure, the relationship between
design pressure and wall thickness required to withstand the
radial stress in the cylindrical portion of the vessel, as
recommended by the ASME :

12/02/2024 Prof.Dr. Hale GÜRBÜZ

Pressure Factors
 Wall thickness required to withstand the radial stress in the
cylindrical portion of the vessel, as recommended by the
ASME :

t is the wall thickness in meters,

P is the design pressure (bar),
D is the diameter of the vessel (m),
S is the maximum allowable working pressure (maximum allowable stress) of
material (bar),
E is a weld efficiency
CA is the corrosion allowance (m).

12/02/2024 Prof.Dr. Hale GÜRBÜZ

Pressure Factors
 The weld efficiency is dependent on the type of weld and the
degree of examination of the weld. Typical values are from
1.0 to 0.6.
 The corrosion allowance depends on the service, and typical
values are from 3.15 to 6.3 mm (0.125 to 0.25 inches).
However, for very aggressive environments, inert linings
such as glass and graphite are often used to protect the
structural metal.
 The maximum alloable working pressure of the material of
construction, S, is dependent not only on the material but also
on the operating temperature.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

Typical values of S are given for
common materials of construction
 For typical carbon steel the
(Figure 7.5) maximum allowable stress drops
off rapidly after 350°C.
 However, for stainless steels
(ASME SA-240) the decrease in
maximum allowable stress with
temperature is less steep, and
operation up to 600–650°C is
possible for some grades.
 For even higher temperatures and
very corrosive environments,
when the lining of vessels is not
practical, more exotic alloys such
as titanium and titanium-based
alloys and nickel-based alloys
may be used.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
 The relationship between cost of a vessel and its operating
pressure is a complex one.
 However, with all other things being constant, the cost of
the vessel is approximately proportional to the weight of
the vessel, which in turn is proportional to the vessel
thickness.
 From Equation 7.9, it is clear that as the operating pressure
approaches 1.67SE, the required wall thickness, and hence
cost, becomes infinite.

 The thickness of the vessel for a given pressure will increase

as the vessel diameter increases.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

  The y-axis shows the ratio of the
vessel thickness at the design
pressure to that at ambient
pressure
 The x-axis is the design pressure.
 A corrosion allowance of 3.15 mm
(1/8 inch) and a value of S = 944
bar (13,700 psi) are assumed.
Figure 7.6. Pressure Factors  It is also assumed that the vessel is
for Carbon Steel Vessels designed with a minimum wall
thickness of 6.3 mm (1/4 inch).
 A minimum wall thickness is
often required to ensure that the
vessel does not buckle under its
own weight or when being
transported.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
 The equation for FP for process vessels is given by Equation 7.10.

 D is the vessel diameter in m, P is the operating pressure in barg,

CA is the corrosion allowance (assumed to be 0.00315 m), and tmin
is the minimum allowable vessel thickness (assumed to be 0.0063
m).
 A value of S = 944 bar has been assumed for carbon steel. As the
operating temperature increases, the value of S decreases (see
Figure 7.5) and the accuracy of Fp drops.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

 Pressure factors for different equipment are given in Appendix A,
Equation A.3, and Table A.2.
 These pressure factors are presented in the general form given by
Equation A.3

log10 FP = C1 + C2 log10 P + C3 (log10 P)2 (A.3)

 This equation is clearly different from Equation 7.10 for process
vessels.
 Moreover, the value predicted by this equation (using the appropriate
constants) gives values of FP much smaller than those for vessels at
the same pressure.
 This difference arises from the fact that for other equipment, the
internals of the equipment make up the major portion of the cost.
 Therefore, the cost of a thicker outer shell is a much smaller fraction
of the equipment cost than for a process vessel, which is strongly
dependent on the weight of the metal.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
Example 7.11.
a. Repeat Example 7.10 except consider the case when the operating
pressures in both the shell- and the tube-side are 100 barg.
b. Explain why the pressure factor for the heat exchanger is much
smaller than for any of the process vessels shown in Figure 7.6
Solution
a.
From Example 7.10, Cp0(2001) = $25,000, FP = 1

From Table A.2, for 5<P<140 barg, C1 = 0.03881, C2 = –0.11272,

C3 = 0.08183

Using Equation A.3 and substituting for P=100 barg and the above
constants,

log10FP=0.03881– 0.11272log10(100) + 0.08183[log10(100)]2 = 0.1407

FP = 100.1407 = 1.383
12/02/2024 Prof.Dr. Hale GÜRBÜZ
Example 7.11.
From Equation A.4:
CBM (2001)=CP°(2001)[1.63+1.66(1.383)(1)]=$98,100
CBM (2006)= CBM (2001)(500/397)=$123,590
b. Compared with Figure 7.6, this pressure factor (1.383) is
much less than any of the vessels at P = 100 barg. Why?
• The cost of a shell-and-tube heat exchanger is associated
with the cost of the tubes that constitute the heat exchange
surface area
• Tubing is sold in standard sizes based on the BWG
(Birmingham wire gauge) standard. Tubes for heat
exchangers are typically between 19.1 and 31.8 mm (3/4 and
1-1/4 inch) in diameter and between 2.1 and 0.9 mm (0.083
and 0.035 inch) thick, corresponding to BWGs of 14 to 20,
respectively.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
Example 7.11.
• Using Equation 7.9, the maximum operating pressure of a 25.4
mm (1 inch) carbon steel tube can be estimated (assume that CA
is zero) as follows.
BWG Thickness (t) P (from Eq. 7.9) (barg)
(mm)
20 0.889 59.1
18 1.244 81.8
16 1.651 106.9
14 2.108 134.1

• It is evident that even the thinnest tube normally used for heat
exchangers is capable of withstanding pressures much greater than
atmospheric. Therefore, the most costly portion of a shell-and-tube
heat exchanger (the cost of the tubes) is relatively insensitive to
pressure.
• The pressure factors for this type of equipment are much smaller
than those for process vessels at the same pressure.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
 The purchased cost of the equipment for the heat exchanger in
Example 7.11 would be CP(2006) = ($25,000)(1.383) (500/394)
= $43,880.
 If this equipment cost were multiplied by the bare module factor
for the base case, the cost would become CBM = ($43,880)(3.29)
= $144,360. This is 16% greater than the $123,590 calculated in
Example 7.11.
 The difference between these two costs results from assuming,
in the latter case, that all costs increase in direct proportion to
the increase in material cost. This is far from the truth. Some
costs, such as insulation, show small changes with the cost of
materials, whereas other costs, such as installation materials,
freight, labor, and so on, are impacted to varying extents.
 The method of equipment module costing accounts for these
variations in the bare module factor.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
Materials of Construction (MOCs)
 The choice of what MOC to use depends on the chemicals that
will contact the walls of the equipment.
 As a guide, Table 7.9, may be used for preliminary MOC
selection.
 However, the interaction between process streams and MOCs can
be very complex and the compatibility of the MOC with the
process stream must be investigated fully before the final design
is completed.
 Many polymeric compounds are nonreactive in both acidic and
alkaline environments. However, polymers generally lack the
structural strength and resilience of metals.
 Nevertheless, for operations at less than about 120°C in corrosive
environments the use of polymers as liners for steel equipment or
incorporated into fiberglass structures (at moderate operating
pressures) often gives the most
12/02/2024 economical
Prof.Dr. Hale GÜRBÜZ solution.
Materials of Construction (MOCs)

A = acceptable; B = acceptable up to 30°C; C = caution, use under limited

conditions; N = not recommended; no entry = information is not available.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

Materials of Construction (MOCs)
 The most common MOCs are still ferrous alloys, in particular
carbon steel.
 Carbon steels are distinguished from other ferrous alloys such as
wrought and cast iron by the amount of carbon in them.
 Carbon steel has less than 1.5 wt% carbon, can be given varying
amounts of hardness or ductility, is easy to weld, and is cheap.
 Carbon steel is still the material of choice in the CPI when
corrosion is not a concern.
 Low-alloy steels (chromium between 4 and 9 wt%).
 Stainless steels (high-alloy steels- > 12 wt% chromium )
 Nonferrous alloys :Aluminum and its alloys, copper and its
alloys, nickel and its alloys, titanium and its alloys
The combination of operating temperature and operating
pressure
12/02/2024
will also affect theProf.Dr.
choice of MOC.
Hale GÜRBÜZ
Materials of Construction (MOCs)
Table 7.10. Relative Costs of Metals Using Carbon Steel as the Base Case
Material Relative Cost
Carbon steel Base case (lowest)
Low-alloy steel Low to moderate
Stainless steel Moderate
Aluminum and aluminum alloys Moderate
Copper and copper alloys Moderate
Titanium and titanium-based alloys High
Nickel and nickel-based alloys High

To account for the cost of different materials of construction, it is

necessary to use the appropriate material factor, FM, in the bare
module factor.
This material factor is not simply the relative cost of the material of
interest to that of carbon steel.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
Materials of Construction (MOCs)
 The cost to produce a piece of equipment is not directly
proportional to the cost of the materials.
 For example, the cost of a process vessel.
 The purchased cost (or at least the manufacturing cost) can
be broken down into factors relating to the cost of
manufacturing the equipment.
 Many of these costs will be related to the size of the vessel
that is in turn related to the vessel’s weight, Wvessel.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

Materials of Construction (MOCs)
Table 7.11. Costs Associated with the Manufacture of a Process Vessel
Factors Associated with the Relationship relating Cost to vessel weight, Wvessel
Manufacturing Cost of a
Vessel
Direct Expenses
Cost of raw materials βRM Wvessel
Machining costs βMC Wvessel
Labor costs βL Wvessel
Indirect Costs
Overhead βOH βL Wvessel
Engineering expenses βE(βRM + βMC)Wvessel
Contingencies βCont Wvessel
Total manufacturing cost [βRM+ βMC+ βL+ βOH βLl+ βE (βRM + βMC) + βCont]
Wvessel
12/02/2024 Prof.Dr. Hale GÜRBÜZ
 Materials of Construction (MOCs)
Materials factors for the process equipment : Appendix A, Tables
A.3–A.6, and Figures A.18 and A.19.

These figures are constructed using averaged data from the following
sources: Peters and Timmerhaus [2], Guthrie [9, 10], Ulrich [5],
Navarrete [11], and Perry et al. [3].

12/02/2024 Prof.Dr. Hale GÜRBÜZ

Example 7.12.
Find the bare module cost of a floating-head shell-and-tube
heat exchanger with a heat transfer area of 100 m2 for the
following cases.
a. The operating pressure of the equipment is 1 barg on both
shell and tube sides, and the MOC of the shell and tubes is
stainless steel.
b. The operating pressure of the equipment is 100 barg on
both shell and tube sides, and the MOC of the shell and tubes
is stainless steel.
From Example 7.10, Cp0 (2001) = $25,000 and Cp0(2006) =
$25,000 (500/397) = $31,490.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

Example 7.12.
a. From Example 7.10, at 1 barg, FP = 1
From Table A.3 for a shell-and-tube heat exchanger made of
SS, Identification No. = 5 and using Figure A.8, FM = 2.73

From Equation A.4,

CBM(2006) = Cp0[B1 + B2FPFM] = $31,490[1.63 + 1.66(1.0)(2.73)]
= $194,000

b. From Example 7.11 for P = 100 barg, FP = 1.383

From (a) above, FM = 2.73
Substituting these values in to Equation A.4,
CBM(2006)= Cp0[B1+B2FPFM]= $31,490[1.63 + 1.66(1.383)(2.73)]
= $248,600

12/02/2024 Prof.Dr. Hale GÜRBÜZ

The last three examples all considered the same size heat
exchanger made with different materials of construction and
operating pressure.
The results are summarized below.
Example Pressure Materials FBM Cost
7.10 ambient CS tubes/shell 3.29 $103,590
7.11 100 barg CS tubes/shell 3.93 $123,590
7.12a ambient SS tubes/shell 6.16 $194,000
7.12b 100 barg SS tubes/shell 7.90 $248,600

The cost of the equipment is strongly

dependent on the materials of construction
and the pressure of operation.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

7.3.5. Combination of Pressure and MOC Information to Give the
Bare Module Factor, FBM, and Bare Module Cost, CBM
In Examples 7.10–7.12, the bare module factors and costs were
calculated using Equation A.4. CBM = CP°[B1+B2FPFM]

The form of this equation is not obvious, and its derivation is based on
the approach used by Ulrich [5]:

Cost of equipment=Cp0[FPFM] (at operating conditions) 7.11

Cost of equipment installation= Cp0[F0BM -1] (for base conditions)

7.12

This cost is calculated by taking the bare module cost, at base

conditions, and subtracting the cost of the equipment at the base
12/02/2024 Prof.Dr. Hale GÜRBÜZ
conditions.
The incremental cost of equipment installation due to nonbase
case conditions = Cp0[FpFm -1] fP&I 7.13

This cost is based on the incremental cost of equipment due to

nonbase conditions multiplied by a factor, (fP&I), that accounts for the
fraction of the installation cost that is associated with piping and
instrumentation.

Equations 7.11 through 7.13 can be combined to give the following

relationship:
CBM=Cp0[FPFM] + Cp0[F0BM -1] + Cp0[FpFm -1] fP&I 7.14
CBM=Cp0 [FPFM (1+ fP&I) + F0BM -1- fP&I ]

12/02/2024 Prof.Dr. Hale GÜRBÜZ

Equation 7.14 is the same as Equation A.4

CBM = CP°[B1+B2FPFM] (A4)

Cp0 [FPFM (1+ fP&I) + F0BM -1- fP&I ] 7.14.

B1= F0BM -1- fP&I , B2= 1+ fP&I

12/02/2024 Prof.Dr. Hale GÜRBÜZ

7.3.6. Algorithm for Calculating Bare Module Costs

 The following six-step algorithm is used to estimate actual bare

module costs for equipment from the figures in Appendix A.

1. Using the correct figure in Appendix A (Figures A.1–A.17), or the

data in Table A.1, obtain CP° for the desired piece of equipment.
This is the purchased equipment cost for the base case (carbon steel
construction and near ambient pressure).

2. Find the correct relationship for the bare module factor. For
exchangers, pumps, and vessels, use Equation A.4 and the data in
Table A.4. For other equipment, the form of the equation is given in
Table A.5.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

7.3.6. Algorithm for Calculating Bare Module Costs

3. For exchangers, pumps, and vessels, find the pressure factor, FP,
Table A.2 and Equation A.2 or A.3, and the material of construction
factor, FM, Table A.3, and Figure A.8. Use Equation A.4 to calculate
the bare module factor, FBM.

4. For other equipment find the bare module factor, FBM, using Table
A.6 and Figure A.9.

5. Calculate the bare module cost of equipment, CBM, from Equation

7.6

6. Update the cost from 2001 (CEPCI – 397) to the present by using
Equation 7.4.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
Example 7.13.
Find the bare module cost (in 2006) of a stainless steel tower 3 m in
diameter and 30 m tall. The tower has 40 stainless steel sieve trays
and operates at 20 barg.

The costs of the tower and trays are calculated separately and then
added together to obtain the total cost.

For the tower,

a. Volume = πD2L/4 = (3.14159)(3)2(30)/4 = 212.1 m3
From Equation A.1, log10 C0P = K1 + K2 log10 A + K3 (log10 A)2
A: capacity or size parameter for the equipment

log10 C0P (2001)= 3.4974 + 0.4485log10 212.1 + 0.1074 (log10 212.1)2

=5.1222
C0P (2001)=105.1222 = $132,500
C0P (2006) =$132,500(500/397)= $166,880
12/02/2024 Prof.Dr. Hale GÜRBÜZ
Example 7.13.
b. From Equation A.3 and Table A.4, FBM = 2.25 + 1.82 FMFP

log10 FP = C1 + C2 log10 P + C3 (log10 P)2 A.3

12/02/2024 Prof.Dr. Hale GÜRBÜZ

Example 7.13.
c. From Equation 7.10 with P = 20 barg and D = 3 m

(20  1)3
 0.00315
(2)(944)(0.9)  1.2(20  1)
Fp, vessel   6.47
0.0063

From Table A.3, identification number for stainless steel vertical

vessel = 20; from Figure A.8, FM = 3.11

FBM = 2.25 + 1.82(6.47)(3.11) = 38.87

12/02/2024 Prof.Dr. Hale GÜRBÜZ
Example 7.13.
d.
CBM(2006) = (166,880)(38.87) = $6,486,000

For the trays,

Tray (tower) area = πD2/4 = 7.0686
From Equation A.1,

log10 C0P (2001)= 2.9949 + 0.4465log10 7.0686 + 0.3961 (log10 7.0686)2

=3.6599

C0P (2001)=103.6599 = $4,570

C0P (2006) =$4570(500/397)= $5,756

12/02/2024 Prof.Dr. Hale GÜRBÜZ

Example 7.13.

From Table A.5,

CBM = CpNFBMFq, N=40, Fq=1.0 (since number of trays > 20, Table
A.5)

From Table A.6, SS sieve trays identification number = 61; from

Figure A.9, FBM = 1.83

CBM,trays(2006) = ($5,756)(40)(1.83)(1.0) = $421,300

For the tower plus trays,

CBM,tower+trays(2006) = $6,486,000 + $ 421,300 = $ 6,908,300

12/02/2024 Prof.Dr. Hale GÜRBÜZ

7.3.7. Grass Roots and Total Module Costs
 The term grass roots refers to a completely new facility in which
we start the construction on essentially undeveloped land, a grass
field.
 The term total module cost refers to the cost of making small-to-
moderate expansions or alterations to an existing facility.
 To estimate these costs, it is necessary to account for other costs
in addition to the direct and indirect costs. These additional costs
were presented in Table 7.6 and can be divided into two groups.

Group 1: Contingency and Fee Costs:

Group 2: Auxiliary Facilities Costs

12/02/2024 Prof.Dr. Hale GÜRBÜZ

7.3.7. Grass Roots and Total Module Costs

Group 1: Contingency and Fee Costs:

 The contingency cost varies depending on the reliability of the
cost data and completeness of the process flowsheet available.
 This factor is included in the evaluation of the cost as a protection
against oversights and faulty information. Unless otherwise
stated, values of 15% and 3% of the bare module cost are
assumed for contingency costs and fees, respectively.
 These are appropriate for systems that are well understood.
Adding these costs to the bare module cost provides the total
module cost.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

7.3.7. Grass Roots and Total Module Costs

Group 2: Auxiliary Facilities Costs:

 These include costs for site development, auxiliary buildings, and

off-sites and utilities.
 These terms are generally unaffected by the materials of
construction or the operating pressure of the process. A review of
costs for these auxiliary facilities by Miller [17] gives a range of
approximately 20% to more than 100% of the bare module cost.
 Unless otherwise stated, these costs are assumed to be equal to
50% of the bare module costs for the base case conditions.
Adding these costs to the total module cost provides the
grassroots cost.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

7.3.7. Grass Roots and Total Module Costs

Group 2: Auxiliary Facilities Costs:

 These include costs for site development, auxiliary buildings, and

off-sites and utilities.
 These terms are generally unaffected by the materials of
construction or the operating pressure of the process. A review of
costs for these auxiliary facilities by Miller [17] gives a range of
approximately 20% to more than 100% of the bare module cost.
 Unless otherwise stated, these costs are assumed to be equal to
50% of the bare module costs for the base case conditions.
Adding these costs to the total module cost provides the
grassroots cost.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

The total module cost can be evaluated from
7.15.

and the grassroots cost can be evaluated from

7.16.

where n represents the total number of pieces of equipment.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

Example 7.14.
A small expansion to an existing chemical facility is being
investigated, and a preliminary PFD of the process is shown in
Figure E7.14.
The expansion involves the
Figure E7.14. PFD for Example 7.14 installation of a new distillation
column with a reboiler,
condenser, pumps, and other
associated equipment.

A list of the equipment, sizes,

materials of construction, and
operating pressures is given in
Table E7.14(a).

12/02/2024 Prof.Dr. Hale GÜRBÜZ

 Table E7.14(a). Information on Equipment Required for the Plant Expansion Described
in Example 7.14
Material of Operating
Equipment No. Capacity / Size Construction[*] Pressure (barg[†])
E-101 Area = 170 m2 Tube - CS Tube = 5.0
Overhead condenser Shell and tube (floating-head) Shell - CS Shell = 5.0
E-102 Area = 205 m2 Tube - SS Tube = 18.0
Reboiler Shell and tube (floating-head) Shell - CS Shell = 6.0
E-103 Area = 10 m2 (double pipe) All CS construction Inner = 5.0
Product cooler Outer = 5.0
P-101A/B Powershaft = 5 kW CS Discharge = 5.0
Reflux pumps Centrifugal
T-101 Diameter = 2.1 m Vessel - CS Column = 5.0
Aromatics column Height = 23 m
32 sieve trays Trays - SS
V-101 Diameter = 1.8 m Vessel - CS Vessel = 5.0
Reflux drum Length = 6 m
Horizontal

[*] CS = Carbon
12/02/2024 [†] barg
Prof.Dr. Hale
steel; SS = Stainless steel, GÜRBÜZ
= bar gauge, thus 0.0 barg = 1.0 bar
The same algorithm presented above is used to estimate bare module
costs for all equipment.
This information is listed in Table E7.14(b), along with purchased
equipment cost, pressure factors, material factors, and bare module
factors.
Table E7.14(b). Results of Capital Cost Estimate for Example 7.14
C0BM((2001)(
Equipment FP FM FBM C0p(2001)($) CBM(2001)($) $)
E-101 1.0 1.0 3.29 33,000 108,500 108,500
E-102 1.023 1.81 4.70 36,900 177,900 121,300
E-103 1.0 1.0 3.29 3700 12,300 12,300
P-101A/B 1.0 1.55 3.98 (2)(3200) (2)(12,600) (2)(10,300)
T-101 1.681 1.0 5.31 54,700 290,700 222,800
32 trays 1.83 1.83 (32)(2200) 131,200 71,700
V-101 1.513 1.0 3.79 13,500 51,200 40,600
Totals 219,900 797,000 597,800
CEPCI = 397

12/02/2024 Prof.Dr. Hale GÜRBÜZ

The substitutions from Table E7.14(b) are made into Equations 7.15
and 7.16 to determine the total module cost and the grassroots cost.
n n

Total module cost C TM   C TM,i  1.18 C Bm,i

i 1 i 1

C TM  1.18($797,000) (500/397)  $1,184,000

n
Grassroots cost C GR  C TM  0.50 C 0BM,i
i 1

C GR  $1,184,000  0.50($597,800)(500/397)  $1,561,000

Although the grassroots cost is not appropriate here (because we have

only a small expansion to an existing facility), it is shown for
completeness.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
7.3.8. A Computer Program (CAPCOST) for Capital Cost
Estimation Using the Equipment Module Approach

 For processes involving only a few pieces of equipment,

estimating the capital cost of the plant by hand is relatively easy.
 For complex processes with many pieces of equipment, these
calculations become tedious.
 To make this process easier, a computer program has been
developed that allows the user to enter data interactively and
obtain cost estimates in a fraction of the time required by hand
calculations with less chance for error.
 The program (CAPCOST_2008.xls) is programmed in Microsoft
Excel, and a template copy of the program is supplied on the
CD that accompanies this book.

12/02/2024 Prof.Dr. Hale GÜRBÜZ

7.3.8. A Computer Program (CAPCOST) for Capital Cost
Estimation Using the Equipment Module Approach
 The program requires the user to input information about the
equipment—for example, the capacity, operating pressure, and
materials of construction.
 The cost data can be adjusted for inflation by entering the current
value of the CEPCI.
 Other information such as output file names and the number of the
unit (100, 200, etc.) is also required.
 The type of equipment required can be entered by using the mouse-
activated buttons provided on the first worksheet.
 The user will then be asked a series of questions that appear on the
screen.
 The user will be required to identify or enter the same information
as would be needed to do the calculations by hand—that is,
operating pressure, materials of construction, and the size of the
equipment.
12/02/2024 Prof.Dr. Hale GÜRBÜZ
7.3.8. A Computer Program (CAPCOST) for Capital Cost
Estimation Using the Equipment Module Approach
 The same information as contained in the cost charts and tables in
Appendix A is embedded in the program, and the program should
give the same results as hand calculations using these charts.
 When the data for equipment are entered, a list of the costs on the
first worksheet is updated.
 The use of the spreadsheet is explained in the CAPCOST.avi help
files contained on the CD, and the reader is encouraged to view the
file prior to using the software.
 You are strongly advised to verify the results of Example E7.14 for
yourself prior to using the program to solve problems in the back of
this chapter.

12/02/2024 Prof.Dr. Hale GÜRBÜZ