Page 181 - Analysis, Synthesis and Design of Chemical Processes, Third Edition

Chapter 7 Estimation of Capital Costs

I n Chapter 1, the information provided on a process flow diagram, including a stream table and an
equipment summary table, was presented. In the next four chapters, this information will be used as a
basis for estimating

1. How much money (capital cost) it takes to build a new chemical plant
2. How much money (operating cost) it takes to operate a chemical plant
3. How to combine items 1 and 2 to provide several distinct types of composite values reflecting
process profitability
4. How to select a “best process” from competing alternatives
5. How to estimate the economic value of making process changes and modifications to an existing
processes
6. How to quantify uncertainty when evaluating the economic potential of a process

In this chapter, we concentrate on the estimation of capital costs. Capital cost pertains 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 that are most likely to be
encountered in the process industries [1,2,3]:
1. Detailed estimate
2. Definitive estimate
3. Preliminary estimate
4. Study estimate

5. Order-of-magnitude estimate

The information required to perform each of these estimates is provided in Table 7.1.

Table 7.1 Summary of Capital Cost Estimating Classifications (References [1], [2], and [3])

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: Normally requires only a block flow diagram.

Study (also known as Major Equipment or Factored) Estimate

Data: This type of estimate utilizes a list of the major equipment found in the process. This includes all