Page 274 - Chemical engineering design

The value in January 2004 was, approximately, 405, so the dollar cost of the plant in
early 2004 will be: COSTING AND PROJECT EVALUATION 249
405 6
6
13 ð 10 ð D $16.45 ð 10
320
The rate of exchange in January 2004 was $1.82, so the cost in pounds sterling will be
16.45 ð 10 6 6
D £9.04 ð 10
1.82
say, $9,000,000

Widely different from that estimated by method 1. This is not surprising as inflation in
the UK has been very much greater than that in the US over this period.
Where UK, or other local, indexes and historical exchange rates are available, it is
probably better to convert costs to the local currency using the rate of exchange ruling at
the date of the costs and update using the local index: method 1 in the Example 6.2. In
the United Kingdom historical values for exchange rates can be found in the government
publication Economic Trends (Central Statistical Office, HMSO). Current and historical
values for most currencies can be found on the Internet/World Wide Web.
As a rough guide US costs can be taken as equivalent to local prices, converted to local
currency, for Western European countries, but construction costs may be significantly
greater in less developed parts of the world.
Location factors can be used to make allowance for the variation in costs in different
countries; see IChemE (1987).

6.5.2. Step counting methods
Step counting estimating methods provide a way of making a quick, order of magnitude,
estimate of the capital cost of a proposed project.
The technique is based on the premise that the capital cost is determined by a number
of significant processing steps in the overall process. Factors are usually included to allow
for the capacity, and complexity of the process: material of construction, yield, operating
pressure and temperature.
A number of workers have published correlations based on a step counting approach:
Taylor (1977), Wilson (1971). These and other correlations are reviewed and compared
in the Institution of Chemical Engineers booklet, IChemE (1988).
Bridgwater, IChemE (1988), gives a developed relatively simple correlation for plants
that are predominantly liquid and/or solid phase handing processes.
His equation, adjusted to 2004 prices is:
for plant capacities under 60,000 tonne per year:
C D 150,000 N (Q/s) 0.30 6.3

and above 60,000 t/y:
C D 170 N (Q/s) 0.675 6.4

where C D capital cost in pounds sterling
N D Number of functional units