Page 272 - Chemical engineering design

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COSTING AND PROJECT EVALUATION
Example 6.1
The purchased cost of a shell and tube heat exchanger, carbon shell, stainless steel tubes,
2
heat transfer area 500 m , was £7600 in January 1998; estimate the cost in January 2006.
Use the Process Engineering plant index.
Solution
From Figure 6.1:
Index in 1998 D 106
2000 D 108, 100 (change of base)
2004 D 111
So, estimated cost in January 2000 D 7600 ð 108/106 D £7743,

and in 2004 D 7743 ð 111/100 D £8595
From Figure 6.1, the average increase in costs is about 2.5 per cent per year. Use this
value to predict the exchanger cost in 2006.
2
Cost in 2006 D 8595 ð 1.025 D £9030
Say £9000.

6.5. RAPID CAPITAL COST ESTIMATING METHODS

6.5.1. Historical costs
An approximate estimate of the capital cost of a project can be obtained from a knowledge
of the cost of earlier projects using the same manufacturing process. This method can be
used prior to the preparation of the flow-sheets to get a quick estimate of the investment
likely to be required.
The capital cost of a project is related to capacity by the equation
n

S 2
C 2 D C 1 6.2
S 1
where C 2 D capital cost of the project with capacity S 2 ,
C 1 D capital cost of the project with capacity S 1 .
The value of the index n is traditionally taken as 0.6; the well-known six-tenths rule. This
value can be used to get a rough estimate of the capital cost if there are not sufficient data
available to calculate the index for the particular process. Estrup (1972) gives a critical
review of the six-tenths rule. Equation 6.2 is only an approximation, and if sufficient data
are available the relationship is best represented on a log-log plot. Garrett (1989) has
published capital cost-plant capacity curves for over 250 processes.

Example 6.2
Obtain a rough estimate of the cost of a plant to produce 750 tonnes per day of sulphuric
acid, from sulphur. Use the costs given by Garrett (1989) reproduced in Figure 6.2.