Capital and Manufacturing

Cost Estimation
Jim Frederick
CHBE4505A
Summer, 2005
Capital Cost Estimation
Purchased vs. installed cost, etc.
Use simple estimation methods
Cost vs. capacity power law scale-up
Cost factors or equations from equipment
vendors
Cost charts from plant design textbooks, etc.
Cost estimates from web sites
Inflation factors
Cost Estimation Terminology
C
p
= Purchased cost
This is what you pay the vendor for the equipment
C
BM
= Bare module cost
Cost of the equipment plus installation
C
TM
= Total module cost
Cost of addition of equipment or minor expansion
Includes contingency and costs and other fees
C
GR
= total grass-roots cost
Cost of a new mill or major mill expansion
Includes a site development, auxiliary buildings, etc.
Cost vs. Capacity Power Law
Scale-up
Power law equation:
C
p,2
/C
p,1
= (Capacity
2
/Capacity
1
)
n
For process equipment, n is equipment
specific,
range from 0.41 (heat exchangers) to 1.15
(jaw crushers)
For an entire plant, use n = 0.6
C
GR,2
/C
GR,1
= (Capacity
2
/Capacity
1
)
0.6
Materials
Selection
Factors:
Temperature
Chemical
Environment
Pressure
Stress-temperature relationships for important metals and alloys. (Source:
Ulrich, 1984)
Temperature,
o
C
A
l
l
o
w
a
b
l
e

t
e
n
s
i
l
e

s
t
r
e
s
s
,

b
a
r

Cost Factors or Equations From
Equipment Vendors
Cost factors (apply for a narrow size range)
Installed cost for black liquor evaporators:
$60/ft
2
heat transfer area
Installed cost for kraft recovery boilers: $11 to
$13 per lb BL solids/day
Cost equations (apply over a wider size range)

Example of a Cost Equation (1/2)
A. Cost equations:
For effects in a multiple-effect evaporator operating with black
liquor above 30% solids content and/or at pressures above 1
atm,
C
BM
= $1,770 A
0.55

For evaporator effects operating with black liquor at or below
30% solids content and/or at pressures at or below 1 atm,
C
BM
= $830 A
0.55


Note: in both correlations, where A = heat transfer area, ft
2
Example of a Cost Equation (2/2)
B. Size limitations:
The largest dimple plate, falling film evaporator unit in the
world:
evaporates 2.2x10
6
pounds of water per hour,
contains 628,000 ft
2
of heat transfer area (~147,000 ft
2

per effect for the 6-effect train)
The 6
th
effect is 34 ft in diameter
Be aware of min and max equipment sizes in normal
design practice
Cost Estimation Charts
Based on data from many plants
Procedure
estimate C
p,cs
for equipment constructed from
carbon steel, and to operate at or only slightly
above one bar
Determine the factors for materials other than
carbon steel, pressure, etc.
Calculate C
BM
from C
p,cs
and these factors
Each chart has a specific equation for C
BM
= f(C
p,cs
)
Max
size
Min
size
From C
p
to C
TM
1. Account for inflation
Use the ratio of the Chemical Engineering Plan Cost
Index (CE Index) for the year of purchase and the year
on which the purchased cost estimation is based, i.e.
C
BM,2006
= C
BM,1978
(CE Index
2006
/CE Index
1978
)
Account for cost of installation, etc.
Add contingency + fee = 0.18 F
BM

Simplest: use Lang factor: f
Lang
= C
TM
/C
p
f
Lang
= 4.5 for chemical plants, 3.2 for solids processing
plants, and 2.5 for P&P mills