Topic 8:

Capital Cost Estimation

Introduction

 In all stages of the design process, estimates of both the total capital
investment (TCI) and annual cost of manufacture (COM) are crucial for the
evaluation of product and processing alternatives.
 Various approaches, graphs and equations as a function of equipment
size, for estimating purchase costs of processing equipment items.
 However, these prices generally increase with time, and the graph and
equation are based upon certain year.
 When using purchase cost estimates from an earlier date, an estimate of
the cost at the later date is made by multiplying the cost from an earlier
date by the ratio of a cost index, I, at that later date to a base cost index
Ibase, that corresponds to the date that applies to the purchase cost.
 The indexes most commonly considered by chemical engineers:
I. The Chemical Engineering (CE) Plant Cost Index - year 1957-1959
o pertain to the entire processing plant, taking into account labor and materials to
fabricate the equipment, delivery it and install it.
o pertain to an average of all chemical processing industries.
II. The Marshall & Swift (MS) Equipment Cost Index – year 1926
o pertain to the entire processing plant, take into account labor and materials to
fabricate the equipment, delivery it and install it.
o restricted to the petroleum industry
III. The Nelson-Farrar (NF) Refinery Construction Cost Index - year 1946
o a general index that pertains to the average of all industrial constrution
IV. The Engineering News-Record (ENR) Construction Cost Index - year 1967
o pertain to an all-industry average equipment purchase cost

 Consumer Price Index (CPI) used to measure the rate of inflation with a
basis of 10.0 for the year 1914.
Capital Investment Costs

 The total capital investment (TCI) of a chemical plant or a chemical

product manufacturing facility is a one-time expense for the design,
construction, and start-up of a new plant or a revamp of an existing plant.
 A new chemical processing plant may be an addition to an existing
integrated complex or a grass-root plant with no other chemical plant
nearby.
 Offsite facilities are the utilities and other services that outside the battery
limit (imaginary fence that separate manufacturing process from offsite
facilities), can be a significant fraction of the total capital investment.
Total Bare-Module Cost (CTBM)
 The sums of bare-module costs for
I. Fabricated process equipment and process machinery
o A module contain not only the piece of equipment or machinery, but also all
other materials for installation.
o For each piece of equipment, Guthrie (1969, 1974) provides way to estimate the
bare-module cost, by multiply the purchase cost of equipment with a factor. The
factor estimate the direct costs of materials and labor as well as indirect costs
involved in the installation procedure.
o The cost of materials for installation include the cost of concrete for foundations,
steel for structural support, piping from and to the other modules, insulation and
paint.
o The field labor cost accounts for the setting in place the equipment, installation
of associated piping and all other labor costs utilizing the field materials.
o Other considerations involve materials of construction and the design pressure.
o Indirect costs
 Cost of freight to deliver the equipment to plant site, with associated insurance and tax
 Construction overhead which includes benefits for workers and supervisory personnel,
costs of temporary building, roads, security cost, crane, machinery etc.
 Contractor engineering expenses cover cost of engineering (salaries for engineer,
designer, procurement expenses, home office expenses)
II. Spares for liquid pump to permit uninterrupted operation when a process
unit become inoperable)
III. Storage and surge tank to provide improved control and intermediate
storage between sections of the plant, so that one section can continue
operation when an adjoining section is down or operating under capacity.
IV. Initial catalyst charges
V. Computers and software cost associated with instruments and control
system.
Total of direct permanent investment (CDPI)
 CDPI = CTBM + Csite + Cserv + Calloc
 Csite, cost for site preparation, involves making land surveys, dewatering
and drainage, surface clearing, rock blasting, excavation, grading and
piling and the addition of fencing, roads, sidewalks, railroad siding, sewer
lines, fire protection facilities, and landscaping.
 Cserv, cost for service facilities include utility lines, control rooms, laboratories
for feed and product testing, maintenance shops and other building.
 Calloc, allocated cost included to provide or upgrade offsite utility plants
and related facilities for liquid waste disposal, solid waste disposal and
wastewater treatment.
Total depreciable capital (CTDC)
 Addition of Contingencies and Contract Fee to CDPI
 Contingency account for uncertainty in the estimate and the possibility of
not accounting for all the costs involved during the construction of a plant.
**Depreciation accounts for the decline in the value of equipment due to
general wear and tear.
Total Permanent Investment (CTPI)
 Addition of cost of land, any applicable royalties, and cost of starting up
the plant to CTDC
 Royalties are payment made for the use of property, especially a patent,
copyright work, franchise, or natural resources through its use. A common
practice is to pay an initial license fee (include in capital investment) and
an annual royalty based on the amount of sales.
 Plant start-up cost subdivided into two categories
o cost incurred by contractor in checking equipment performance,
calibrating controllers and other plant equipment, and commissioning the
plant
o cost incurred by plant operating personnel when starting up and shutting
down plant
Total Capital Investment (CTCI)
 Addition of working capital (annual manufacturing cost + general annual
expenses) with CTPI
 Working capital funds are needed to cover operating costs required for
early operation of the plant, including cost of inventory (raw materials,
spare charge of catalyst) and funds to cover accounts receivable
(product, byproduct).
Estimation of the Total Capital
Investment
 As the project for manufacturing a new or existing chemical by a new process,
a number of process design studies of increasing complexity is made,
accompanied by capital cost estimation
 Capital cost estimation of increasing level of accuracy
I. Order-of-magnitude estimate (based on method of Hill, 1956)
o can be applied rapidly and is useful in determining whether a new process is
worth pursuing
o has an accuracy of approximately +/-50%
o to produce the estimate, only two things needed: a production rate (pound per
year) and a flowsheet showing the gas compressor, reactors and separation
equipment required and their required materials of construction.
o Another important factor in making estimate is the design pressure of each
major piece of equipment
o Also not necessary to compute a mass and energy balance or to design or size
the equipment.
II. Study estimate (based on overall factor method of Lang, 1947, 1948)
o estimate the capital cost of a chemical plant using overall factor that
multiply estimates of delivery cost of major processing equipment.
o requires a process design complete with mass and energy balance as well
as equipment sizing and materials construction.
o The accuracy of estimation improve to +/-35%
o The purchase cost of each piece of major equipment is first estimate before
multiply with appropriate Lang factor (based on the type of processing
plant) to obtain Total Permanent Investment (CTPI)/Total Capital Investment
(CTCI which include working capital)

III. Preliminary estimate (based on Individual Factors method of Guthrie 1969,

1974)
o this method best carried out after an optimal process design has been
developed complete with P&ID
o the accuracy is improved to +/-20%
o Individual factor for each equipment is used to come out with bare-module
cost, before calculation of the total capital investment
Purchase Costs of the Most Widely
Used Process Equipment
 Typically, equipment cost data are presented in the form of graphs and/or
equations of free-on-board (f.o.b) purchase cost as a function of one or
more equipment size factors.
 Graphs show clearly the effect of size factors on the cost and may be
quickly read; however, equations are more consistent
 The equipment cost equations should be used, even when one of the
following graphs might apply.
Pumps and Electric Motors

 Pumps are widely used in chemical processing plants to move liquids

through piping system from one piece of equipment to another.
 The three most commonly used pumps:
I. Radial centrifugal
II. Piston or plunger reciprocating
III. External rotary gear
 Of these three, the radial centrifugal pump is selected for individual service
approximately 90% of the time
Pump Selection
I. Centrifugal pump of the common radial type should be given fist
consideration when the pumping requirement fall in the following range:
 Volumetric flow rate 10-5000 gpm
 Head (pressure increment) 50-3200 ft
 Kinematic viscosity less than 100 centistokes
 Available net positive suction head (NPSH) greater than 5ft
 **When one or more of the other three other requirements cannot be met,
choose the other two types
II. External rotary gear pumps are suitable for
 Flow rate at least 1500 gpm
 Head to at least 3000 ft
 Moderate-to-high kinematic viscosity of 100-500,000 centistokes
**They cannot used with liquids containing particles and do not give smooth
flow rate as centrifugal pump.

III. Reciprocating pumps are suitable for

 Flow rate at least 500 gpm
 Head to at least 20,000 ft
 Moderate kinematic viscosity of 100,000 centistokes
**Most expensive type of pump and deliver a pulsating flow which can be
reduced when multiple cylinders are used.
Centrifugal Pumps
 Equipment size factor used in cost estimation are:
1. Brake horsepower, PB 2. The product of flow capacity and head
 Size factor, S: 𝑆 = 𝑄𝐻0.5
Q, volumetric flow rate in gal/min
H, pump head (pressure rise/liquid density) in ft
 The pump purchase cost is correlated with the maximum value of S that
pump can handle
 In addition to size factor, purchase cost of centrifugal pump depends on:
Rate of rotation, Number of impeller in series to reach desired head;
Orientation of splitting pump case; Material of construction
 Estimation of base cost, CB for single-stage centrifugal pump with vertical
splitting case (VSC) construction of cast iron and operating at 3600rpm,
which exclude cost of electric motor (CE = 567 @ year 2013)
𝐶𝐵 = exp{12.1656 − 1.1448 ln 𝑆 + 0.0862ln[𝑆]2 }
 Estimation of purchase cost for other type
𝐶𝑃 = 𝐹𝑇 𝐹𝑀 𝐶𝐵
FT, pump type factor FM, material factor CB, base cost
Electric Motor
 The size factor for electric motor is power consumption, PC
𝑃𝑇 𝑃𝐵 𝑄𝐻𝜌
𝑃𝐶 = = =
ƞ𝑃 ƞ𝑀 ƞ𝑀 33,000ƞ𝑀
PT, theoretical horse power of pump
ƞ𝑃 , fractional efficiency : ƞ𝑃 = −0.316 + 0.24015 ln𝑄 − 0.01199(𝑙𝑛𝑄)2
ƞ𝑀 , fractional efficiency of motor: ƞ𝑀 = 0.80 + 0.0319 𝑙𝑛𝑃𝐵 − 0.00182 𝑙𝑛𝑃𝐵 2

𝑄, flow rate through pump (gal/min)

𝐻, pump head (ft)
𝜌, liquid density (lb/ft3)
 The f.o.b of electric motor depends on: Power consumption, PC, Rotation rate
of its shaft, Type of motor enclosure
 Estimation of base cost, CB for electric motor operating at 3600rpm with an
open, drip-proof enclosure (CE = 567 @ year 2013)
𝐶𝐵
= exp{5.9332 + 0.16829 ln 𝑃𝐶 − 0.110056 ln 𝑃𝐶 2 + 0.071413 ln 𝑃𝐶 3
− 0.0063788 ln 𝑃𝐶 4 }
 For other motor speed and type enclosure,
𝐶𝑃 = 𝐹𝑇 𝐶𝐵
where FT is the motor type factor
External Gear Pump
 Equipment size factor used in cost estimation are:
o Brake horsepower, PB
o Flow capacity, Q (gal/min)
 Estimation of base cost, CB for external gear pump of cast iron construction,
which exclude cost of electric motor (CE = 567 @ year 2013)
𝐶𝐵 = exp{8.2816 − 0.2918 ln 𝑄 + 0.0743 ln 𝑄 2 }
 For other materials construction,
𝐶𝑃 = 𝐹𝑀 𝐶𝐵
Reciprocating Plunger Pump
 Equipment size factor used in cost estimation are:
o Brake horsepower, PB
o Flow capacity, Q (gal/min)
 Estimation of base cost, CB for reciprocating plunger pump of ductile iron
construction (CE = 567 @ year 2013)
𝐶𝐵 = exp{7.9361 + 0.26986 ln 𝑃𝐵 + 0.06718[ln 𝑃𝐵 ]2
 For other materials construction,
𝐶𝑃 = 𝐹𝑀 𝐶𝐵
Fans, Blowers and Compressor
 Fan, blower or compressor is used to move a gas through various pipelines or
ducts in a chemical processing plant
 The gas mover increases the total head of gas, includes velocity (dynamic)
head and pressure (static) head, but ignoring a change in potential energy of
the has due to change in elevation above sea level.
 Classification of gas movers
I. Fan
o generally limited to near-ambient suction pressure and pressure increases of less than
10%.
o widely used for high-flow, low-pressure-increase application – heating and ventilating
system, air supply to cooling tower etc.
II. Blower
o can operate at any suction pressure, with compression ratio of up to 2
o used to supplying combustion air to boilers and fired heater, air to stripper etc.
III. Compressor
o for compression ratio larger than 2
o used with a variety of gases and gas mixture to required pressure level for reaction
and separation
 Because a gas is compressible with a density much lower than liquid, the
temperature of a gas rises when compressed, and this temperature rise is a
limiting factor in determining permissible compression ratio for single-stage
gas compressor.
 The widely used compressors are limited to discharge temperatures in
range of 375-400oF
 If a higher compression ratio is required, the compression is accomplished in
stages that are separated by intercooler, to cool the gas to about 100oF
before entering next stage.
 A vapor-liquid separator (knock-out drum) is placed before next stage to
remove any condensate from the gas due to cooling.
Fans
 Most fans are of the centrifugal or axial-flow type
 Centrifugal fans achieve the highest discharge pressure whereas axial-flow
fan provide the highest flow rate.
 The equipment size factor for a fan is the actual cubic feet per minute,
ACFM (the actual cubic feet of air that is being delivered from the
compression equipment)
 Estimation of base cost, CB for different types of fans, with electric motor
included, for carbon-steel construction and total discharge head of 4
in.H2O (CE = 567 @ year 2013)
I. Centrifugal backward-curved fan
𝐶𝐵 = exp{11.4152 − 1.3805 ln 𝑄 + 0.1139 ln 𝑄 2}
II. Centrifugal straight-radial fan
𝐶𝐵 = exp{12.1667 − 1.6407 ln 𝑄 + 0.1328 ln 𝑄 2}

III. Vane-axial fan

2
𝐶𝐵 = exp{9.6487 − 0.97566 ln 𝑄 + 0.08532 ln 𝑄 }
IV. Propeller fan
2
𝐶𝐵 = exp{6.16328 − 0.28635 ln 𝑄 + 0.04866 ln 𝑄 }
 For other materials of construction and higher discharge head
𝐶𝑃 = 𝐹𝐻 𝐹𝑀 𝐶𝐵
o FH, head factor for total heads > 4 in.H2O
o FM, materials construction factor
 The power consumption, PC
𝑃𝐵 𝑄𝐻𝑡
𝑃𝐶 = =
ƞ𝑀 6350ƞ𝑀 ƞ𝐹
o Ht, change in total head (in.H2O)
o Q, gas inlet flow rate (ft3/min)
o ƞ𝑀 , motor efficiency
o ƞ𝐹 , fan efficiency
Blower
 Most blower with compression ratio up to 2 are of the multistage centrifugal
type or the rotary positive displacement type
I. Centrifugal blower
o operating ranges are 100-50000 ICFM
o more common in chemical processing plants to supply air to strippers, dryers and
combustion device
II. Rotary blower
o operating ranges are 20-50000 ICFM
o useful for pneumatic conveying and are well suited to other application when a
fixed volumetric flow rate is essential
**ICFM is the cubic feet per minute at inlet condition
 The equipment size factor for blower brake horse power, PB
𝑘
𝑘 𝑄𝐼 𝑃𝐼 𝑃𝑂 𝑘−1
𝑃𝐵 = 0.00436 [ − 1]
𝑘 − 1 ƞ𝐵 𝑃𝐼
o QI, inlet volumetric flow rate (ft3/min)
o PI & PO, inlet and outlet pressure (lbf/in2)
o k, specific heat ratio
o ƞ𝐵 , mechanical efficiency
 Estimation of base cost, CB for centrifugal blower, with electric motor
included, for cast-iron construction housing with compression ratio up to 2
(CE = 567 @ year 2013)
I. Centrifugal blower
𝐶𝐵 = exp{7.0187 + 0.79000 ln 𝑃𝐶 }
II. Rotary blower
𝐶𝐵 = exp{7.71751 + 0.79320 ln 𝑃𝐶 − 0.0129[ln 𝑃𝐶 ]2 }
 For other materials of construction,
𝐶𝑃 = 𝐹𝑀 𝐶𝐵
Compressor
 Compressor are used widely to move gases for compression ratio greater
than 2
 Most commonly used types of compressor:
I. Reciprocating compressor
o pressure range from vacuum to 100,000 psig
o flow rate range from 5-7,000 ACFM
o horsepower up to 20,000 per machine
II. Centrifugal compressor
o pressure up to 5,000 psig
o flow rate range from 1,000-150,000 ACFM
o horsepower up to 2,000 per machine
III. Screw compressor
o Pressure up to 400 psig
o Flow rate range from 800-20,000 ACFM
o Horsepower up to 6,000 per machine
 An estimate of exit temperature, TO
𝑘
𝑃𝑂 𝑘−1
𝑇𝐼 [( ) − 1]
𝑃𝐼
𝑇𝑂 = 𝑇𝐼 +
ƞ𝐶
 Compressors may be driven by electric motor, steam turbine or gas turbine
(arranged in decreasing efficiency)
 Unless excess steam or low-cost combustion gas is available, the electric motor
is the driver choice for the entire horsepower range
 Estimation of base cost, CB for different types of compressor, with electric motor
included, for cast-iron or carbon-steel construction (CE = 567 @ year 2013)
I. Centrifugal compressor
𝐶𝐵 = exp{9.1553 + 0.63 ln 𝑃𝐶 }
II. Reciprocating compressor
𝐶𝐵 = exp{4.6762 + 1.23 ln 𝑃𝑐 }
III. Screw compressor
𝐶𝐵 = exp{8.2496 + 0.7243 ln 𝑃𝑐 }
 For other materials of construction and driver type
𝐶𝑃 = 𝐹𝐷 𝐹𝑀 𝐶𝐵
o FD, driver factor
o FM, materials construction factor
Heat Exchangers

 Wide variety of heat exchangers is available for heating, cooling,

condensing, and vaporizing process streams, particularly liquids and gases.
 For most application in chemical processing plant, shell-and-tube heat
exchange governed by TEMA and ASME standard, are selected.
 For heat exchanger areas less than 200ft3, double-pipe heat exchangers
are often selected
 Compact heat exchangers are usually reserved for non-demanding
application
Shell-and-Tube Heat Exchangers
 cover a wide range of geometrical variables including:
o tube diameter, wall thickness, length, spacing and arrangement
o baffle type and spacing
o numbers of tube and shell passes
o fixed-head, floating-head, U-tube, and kettle design
 Purchase-cost data are correlated in term of heat exchange surface area
(usually based on the outside surface area of tubes) for base case design
with correction factors for length, materials and pressure.
 Estimation of base cost, CB for different types of heat exchanger with ¾ - 1-
in OD carbon steel tubes, 20ft long with shell-side pressure up to 100 psig
(CE = 567 @ year 2013)
 Floating head
𝐶𝐵 = exp{12.0310 − 0.8709 ln 𝐴 + 0.09005 ln 𝐴 2}

 Fixed head
2
𝐶𝐵 = exp{11.4185 − 0.9228 ln 𝐴 + 0.09861 ln 𝐴 }
 U-tube
𝐶𝐵 = exp{11.5510 − 0.9186 ln 𝐴 + 0.09790 ln 𝐴 2}

 Kettle vaporizer
2}
𝐶𝐵 = exp{12.3310 − 0.8709 ln 𝐴 + 0.09005 ln 𝐴
 For other materials of construction, shell-side pressure and tube length
𝐶𝑃 = 𝐹𝑃 𝐹𝑀 𝐹𝐿 𝐶𝐵
o FP, pressure factor
o FM, materials construction factor
o FL, tube length factor
Double-pipe Heat Exchanger
 For heat exchange surface areas of less than 200 ft2 and as low as 2 ft2
 Estimation of base cost, CB for double-pipe heat exchanger of carbon-steel
construction and pressure up to 600 psig (CE = 567 @ year 2013)
𝐶𝐵 = exp{7.2718 + 0.16 ln 𝐴 }
 For other materials of construction, shell-side pressure and tube length
𝐶𝑃 = 𝐹𝑃 𝐹𝑀 𝐶𝐵
Fired Heaters

 Commonly used to heat and/or vaporize non-reacting process stream at

elevated temperature beyond where steam is normally employed
 The fuel for combustion is either gas or fuel oil
 Estimation of base cost, CB for fired heaters with standard horizontal tube of
carbon steel, adequate for temperature up to 1100 oF and 500 psig. (CE =
567 @ year 2013)
𝐶𝐵 = exp{−0.15241 + 0.785 ln 𝑄 }
o Q, heat duty (Btu/hr)
 For other materials of construction and operation pressure
𝐶𝑃 = 𝐹𝑃 𝐹𝑀 𝐶𝐵
Pressure Vessel and Towers

 Pressure vessels containing little or no internals are widely used in chemical

processing plants
o Reflux drum
o Flash drum
o Knock-out drum
o Settler
o Chemical reactor
o Storage drum
 Usually cylindrical in shape with inner diameter Di and cylindrical shell of length L
(tangent-to-tangent length), to which are welded two ellipsoidal or torispherical
head at both ends
 The vessel also include nozzles for entering and outlet stream, manhole for
internal access, connection for relief valves and instruments, skirt or saddle for
support, platform and ladder.
 The most elaborate method for cost estimation of pressure vessel is based on
vessel weight, a sizing and count of nozzles and manholes.
 The f.o.b purchase cost, which is for carbon steel construction and includes
an allowance for platform, ladder, and a nominal number of nozzles and
manholes
𝐶𝑃 = 𝐹𝑀 𝐶𝑉 + 𝐶𝑃𝐿
o FM, materials factor
o CV, cost of empty vessel
o CPL, cost for platform and ladder
 Estimation of vessel cost, CV for pressure vessel which includes nozzle,
manholes, and support (CE = 567 @ year 2013)
I. Horizontal vessel
𝐶𝑉 = exp{5.6336 + 0.4599 ln 𝑊 + 0.00582 ln 𝑊 2}

𝐶𝑃𝐿 = 2275(𝐷𝑖 )0.2094

II. Vertical vessel
𝐶𝑉 = exp{7.1390 + 0.18255 ln 𝑊 + 0.02297 ln 𝑊 2}

𝐶𝑃𝐿 = 410(𝐷𝑖 )0.7396 (𝐿)0.70684

 Towers are vertical pressure vessels for various separation operations,
including distillation, absorption, and stripping.
 They contain plates and/or packing plus addition nozzles and manhole, as
well as internals for multiple feed entries and management of bottoms
liquid and its withdrawal.
 Estimation of vessel cost, CV for tower which includes nozzle, manholes,
internal (but not packing/plate) and support (CE = 567 @ year 2013)
𝐶𝑉 = exp{10.5449 − 0.4672 ln 𝑊 + 0.05482 ln 𝑊 2 }
𝐶𝑃𝐿 = 341(𝐷𝑖 )0.63316 (𝐿)0.80161
 The weight, W, in the cost correlation for a pressure vessel or tower depends
on the wall thickness of shell and the two head covers.
𝑊 = 𝜋(𝐷𝑖 + 𝑡𝑠 )(𝐿 + 0.8𝐷𝑖 )𝑡𝑠 𝜌
o Di, inner diameter of shell (inch)
o ts, shell thickness (inch)
o L, tangent-to-tangent length (inch)
o ρ, density of carbon steel
**for cost estimation purpose, the head thickness is assumed to be the same as
shell thickness, although in real case thickness of head > shell
 In the absence of corrosion, wind and earthquake consideration for internal
pressures greater than external pressure (exclude vacuum operation) [ASME
pressure vessel code]
𝑃𝑑 𝐷𝑖
𝑡𝑃 =
2𝑆𝐸 − 1.2𝑃𝑑
o tP, wall thickness to withstand internal pressure (inch)
o Pd, internal design gauge pressure (psig)
**Design pressure normally greater than operating pressure, PO
 If PO 0-50psig, use Pd = 10 psig
 If PO 10-1000 psig, use
2}
𝑃𝑑 = exp{0.60608 + 0.91615 ln 𝑃𝑂 + 0.0015655 ln 𝑃𝑂
 If PO greater than 1000 psig, use Pd equal 1.1 times the PO
o Di, inner shell diameter (inch)
o S, maximum allowable stress of shell materials at design temperature (lb/in2).
** The design temperature can be taken as 50 oF above operating temperature
o E, fractional weld efficiency accounts mainly for the integrity of the weld for
longitudinal seam.
 Average wall thickness, tv of a vertical vessel or tower is compute from the
average of thickness at top tp (to withstand the internal pressure) and
thickness at bottom, tp + tw (to withstand wind load or an equivalent
earthquake in addition to the internal pressure)
0.22(𝐷𝑜 + 18)𝐿2
𝑡𝑤 =
𝑆𝐷𝑜2
o Do, outer vessel diameter (in)
o L, tangent-to-tangent vessel height (in)
o S, maximum allowable stress (lb/in2)
 For vacuum vessel which internal pressure is less than external pressure,
vessel must be sufficiently thick to withstand a collapsing pressure, or they
must be provided with stiffening rings around their outer periphery.
 The necessary thickness for vacuum vessel,
𝑡𝑣 = 𝑡𝐸 +𝑡𝐸𝐶
𝑃𝑑 𝐿 0.4
𝑡𝐸 = 1.3𝐷𝑜 ( )
𝐸𝑀 𝐷𝑜
𝑡𝐸𝐶 = 𝐿 0.18𝐷𝑖 − 2.2 × 10−5 − 0.19
o Do & Di – outer and inner diameter of vessel
o Pd – design pressure
o EM – elasticity modulus of metal wall
o L – tangent-to-tangent length
 Even for non-corrosive condition, a corrosive allowance tc, of 1/8 in. should
be added to tv to give the value of ts to be used to compute vessel weight,
W.
 Vessels are generally fabricated from metal plate, whose thickness can be
assumed to come in the following increment:
o 1/16-in. increment for 3/16–1/12 in. inclusive
o 1/8-in. increment for 5/8-2 in. inclusive
o 1/4-in. increment for 2¼-3 in. inclusive
 The final vessel thickness, ts is obtained by rounding up to the next
increment.
Plates
 Vertical tower for absorption, distillation, and stripping utilize trays (plates)
and/or packing.
 Estimation of cost for installed trays, CT (downcomer included)
𝐶𝑇 = 𝑁𝑇 𝐹𝑁𝑇 𝐹𝑇𝑇 𝐹𝑇𝑀 𝐶𝐵𝑇
o NT – number of trays
o FNT – factor for number of trays
o FTT – factor for type of tray
o FTM – factor which depend on materials of construction and column diameter
 CBT – Base cost for sieve trays with inner diameter of tower within 2-16ft (CE =
567 @ year 2013)
𝐶𝐵𝑇 = 468exp(0.1482𝐷𝑖 )
Packings
 Packings for towers are classified by dumped (random) or structured packing.
 When packings are used, the total purchase cost of the tower becomes
𝐶𝑃 = 𝐹𝑀 𝐶𝑉 + 𝐶𝑃𝐿 + 𝑉𝑃 𝐶𝑃𝐾 + 𝐶𝐷𝑅
o FM – factor for materials construction of vessel
o CV – cost for vessel
o CPL – cost for platform and ladder
o VP – volume of of packing (ft3)
o CPK – installed cost of packing ($/ft3)
o CDR – installed cost of liquid distributor
 Structured packings offer reduced pressure drop, higher stage efficiency (in
term of HETS), and capacity in terms of reduced diameter. However, they are
more expensive.
 Structured packing often installed when revamping existing towers to reduce
pressure drop, increase capacity, and/or increase purity of product.
Purchased Costs of Other Chemical
Processing Equipment
 An attempt has been made to include the most widely used designs and
heuristics are included for estimating equipment sizing, which is sufficient for
preliminary estimate of capital cost.
 Table 16.32 listed out the purchase cost (Cp) equations for most of
equipment, which are based on a size factor (S), valid for a stated range
and average cost index for year 2013 (CE = 567).
 When the pressure and materials of construction are not mentioned, low to
moderate pressure and carbon steel may be assumed.
 The purchase cost of equipment made of other materials may be estimate
by multiply the materials factor, FM
 **More equipment description and detailed method for determining size
can be found in Perry’s Chemical Engineers’ Handbook.
Annual Production Cost

 Many continuing cost are associated with the operations of a chemical

plant or product manufacturing facility.

Sales Revenue
 Before estimating the annual costs, the total annual sales revenue, S should
be estimated.
 This calculation of the economic potential is made early, during the
preliminary process synthesis stage.
 The total sales revenue is based on the unit selling price(s) and on the
quantity of product(s) produced for sales, including desired product and
byproduct with marketable value.
Feedstock
 A major consideration in determining the cost of manufacture are the costs
of feedstock.
 The required quantity of feedstock is obtained from the process design
materials balance and the estimated plant-operating factor or annual
hours of plant operation (operation day/365)
 The feedstock may be
 Purchased from supplier(s) under a long-range contract
 Obtained from the company itself or the company have control over a
natural resources
Utilities
 Annual cost of utilities, compared to the feedstock cost, is not an
insignificant contribution to the selling price of the product, often in the
range of 10-15%.
 Utilities include steam for heating, electricity, cooling water, process water,
demineralized boiler-feed water, refrigeration, fuel, wastewater treatment,
waste disposal and landfill.
 The company may purchase utilities from utility company or build its own
utility plants.
 Purchased utility costs are based on consumption.
Company-owned utility, both capital cost and operation cost apply.
I. Steam
 Steam has many potential usage in a process:
 As a process fluid: to be used as feedstock, an inert diluent, a direct
heating agent, and as stripping agent.
 As utility: can be used in place of electricity to drive pump and compressor,
to heat liquid, gases and vaporize liquid in heat exchanger.
 Typical pressure levels for steam are 50, 150 and 450 psig
 In computing steam utility requirements, credit is taken only for the latent
heat of vaporization but not sensible heat.
II. Electricity
 The operation of many items of processing equipment requires energy input in
the form of drive or motor.
 The most common drives are electric motor because of their high efficiency
(>90%); reliability; wide range of wattage; shaft speeds and designs; favorable
cost and ease of maintenance.
 Alternating rather than direct current is used almost exclusively in electric motor.

III. Cooling water

 Cooling water is used to cool liquids and gases and condense vapor.
 Typically, cooling water circulates between a cooling tower and process heat
exchangers by means of a pump
 Approximately 80% of the reduction of temperature of cooling water is
accomplished by evaporation of a small amount of cooling water; the balance
is caused by heat transfer from cooling water to the surrounding air.
 Make-up cooling water is around 1.5-3% of the circulating cooling water rate to
account for lost in cooling tower due to:
o Evaporation of cooling water
o Entrained water droplet in the inlet
o Deliberate purging of untreated cooling water to prevent buildup and subsequent
precipitation
IV. Process water and Boiler-feed water
 Process water (water that directly enter the process) must be purified to the
extent of necessary to avoid introduction of any undesirable chemicals into
process that could poison catalyst, foul equipment and/or introduce impurities
to product.
 Boiler-feed water is used to produce steam or as cooling agent (in place of
cooling water) when the temperature of process stream to be cooled exceeds
300oF. It is demineralized before used to avoid fouling heat exchanger tubes.

V. Refrigeration
 Refrigerant is used to cool and/or condense process stream to temperature
below 100oF.
 Common refrigerant used
o Ammonia
o R-134a (1,1,1,2-tetrafluroethane)
o Light hydrocarbons
 The temperature level is the key factor in determining the cost of refrigeration
VI. Fuels
 Various fuels may be combusted in a chemical process to provide
 Heat for – boilers, electrical power generation, furnace and fired heater
 Work for – pump and compressor
 To determine the amount of fuel required, heating value of fuels must be
known.
 Heating value is the total heat evolved by complete combustion of a fuel
with dry air when the fuel and air are at 60oF before combustion and all flue
gas is brought to 60oF after combustion.
 High heating value, HHV (gross heating value)
 Low heating value, LHV (net heating value)
 For a given heat-transfer rate to a process stream being heated in a fired
heater, the amount of fuel required is greater than that based on HHV
because of heat losses (flue gas temperature greater than 60oF and
present of water vapor in flue gas). The heat loss is take into consideration
by the efficiency of the particular fired heater.
VII. Air pollution abatement
 Waste gases may contain particulate and/or gaseous pollutants, inorganic or organic.
 Additional equipment must be added to the process to remove these pollutants.
 If the equipment requires utilities, their cost must be added to the other utilities cost
 Wastewater treatment
 When water is fed into a process and/or the process produces water, wastewater is usually
one of the process effluents.
 This water must be treated for the removal of pollutants before being discharged to a
sewer, pond, or body of water.
VIII. Wastewater treatment facilities includes:
 Primary physical treatment
 Secondary biological treatment
 Tertiary chemical treatment
 Of most concern in chemical processing plants is the removal of dissolved organic
compounds, particularly those that are carcinogenic.
IX. Solid waste handling
 Solid waste must be classified as:
 Hazardous - due to their ignitability, corrosively, reactivity, and /or toxicity. This class of solid
water must be treated on-site before disposal
 Non-hazardous - can be directly placed in container and dispose to a landfill or, in some
case incinerated.
Labor-related Operation, O
 Contribute to an important fraction of the cost of manufacture (COM)
 Direct wages and benefits (DW&B) is calculated based on an hourly rate for operators of a
proposed plant.
 To estimate all labor-related operations, it is necessary to estimate the number of operators
for the plants per shift and to account 3 shifts daily.
**It is common to provide 5 shifts for each operator per week, to take into account unforeseen
incident (vacation, illness etc.)
 Estimates number operators per shift based on:
o Type and arrangement of equipment
o Multiplicity of units
o Amount of instrumentation and control
o Solid or fluid processing plant
o Mode of operation
**Divide the processing plant into sections before estimate the number of operator per shift
 To obtain total annual labor-related operation cost, in addition to DW&B:
o Direct salaries and benefits for supervisory and engineering personnel
o Operating supplies and services
o Technical assistance to manufacturing
o Control laboratory
Maintenance, M
 A second category of labor-related cost is associated with maintenance, as the
processing equipment must be kept in acceptable working condition.
 Maintenance wages & benefits (MW&B) is estimated as a fraction of the total depreciable
capital (CTDC), depending on the type processing plant (solid, fluid or combination of both)
 To obtain total annual maintenance related cost, in addition to MW&B:
o Direct salaries and benefits for supervisory and engineering personnel
o Materials and services
o Maintenance overhead
 Thus, the total annual cost of maintenance may varies from 8.05-11.5% of CTDC
 Maintenance cost can be controlled by:
o Selecting proper materials of construction
o Sparing pumps
o Avoiding high rotation speed of shafts
o Restricting fouling streams to tube side of HEx
o Selecting long-life catalyst for reactor
o Scheduling routine maintenance
 Routine maintenance includes:
o Cleaning of HEx
o Lubrication and replacement of packing and mechanical seal in pumps and compressors
Operating overhead
 Overhead expenses (cost that not directly related to plant operation) include
the costs of providing the following services:
o Cafeteria
o Employment and personnel
o Fire protection, inspection and safety
o First aid and medical
o Purchasing, receiving and warehouse
o Industrial relations
o Automotive and transportation
o Recreation
 Overhead costs are subdivided into 4:
o General plant overhead
o Mechanical department services
o Employee relations department
o Business services
 It is estimated as a fraction of the combined M&O-SW&B
Property Taxes and Insurance
 Annual property taxes are assessed by local municipality as a percentage of
total depreciable capital, CTDC
 Liability insurance costs (estimated as a percentage of total depreciable
capital, CTDC) depend on
o the pressure and temperature levels of plant operation
o whether flammable, explosive or toxic chemical are involved

Depreciation, D
 A measure of the decrease in value of an asset over time. Some companies use
depreciation as a mean to set aside a fund to replace a plant when it is no
longer operable.
 It can be estimated as a constant percentage of CTDC and Calloc

Cost of Manufacture, COM

Total annual cost of manufacture is the sum of:
 Direct manufacturing cost
 Operating overhead
 Fixed costs
Total Production Cost, C
 Equals the sum of cost of manufacture and general expenses
 General expenses refer to activities that are conducted by the central
operations of a company, perhaps at the corporate headquarters, and are
financed from profits made by the company, which includes:
o Selling (or transfer) expenses – expenses of sales office, advertising, containers
and shipping, commissions and technical sales representatives
o Direct research
o Allocated research
** R&D expenses for new products and/or manufacturing method
o Administrative expenses
o Management incentive compensation

Pre-tax (Gross) Earning = Annual Sales Revenue (S) – Total Production Cost (C)

After-tax (Net) Earning or Profit = (1- tax rate, t) Gross Earning

Approximate Profitability Measures

 To be a worthwhile investment, a project (new chemical plant or revamp of

existing plant) must be profitable
 In addition to make a large net profit, one must consider the net profit over
the investment, where greater the excess of profits over investment, the
more attractive the investment.
 Here presented few simple profitability measures that ignore the effect of
inflation (so-called time value of money) and use of simple straight-line
depreciation, which suitable for early stages of project evaluation.
Return on Investment (ROI)
 ROI is the annual interest rate made by the profit on the original investment.
𝑁𝑒𝑡 𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 (1 − 𝑡)(𝑆 − 𝐶)
𝑅𝑂𝐼 = =
𝑇𝑜𝑡𝑎𝑙 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝐶𝑇𝐶𝐼

Payback Period (PBP)

 PBP is the time required for annual earnings to equal the original investment
𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑏𝑙𝑒 𝐶𝑎𝑝𝑖𝑡𝑎𝑙
𝑃𝐵𝑃 =
𝑁𝑒𝑡 𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 + 𝐴𝑛𝑛𝑢𝑎𝑙 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛
𝐶𝑇𝐷𝐶
=
1−𝑡 𝑆−𝐶 +𝐷
𝐶𝑇𝐷𝐶
=
𝐶𝑎𝑠ℎ 𝐹𝑙𝑜𝑤
 The depreciable capital is used and annual depreciation, D is added back
to net earnings because that depreciation is retained by the company.