2 Note to ReaderThis presentation was prepared for the purposes of answering questions from the prior year. This years version may look substantially different.
3 Question 1 “What exactly is a ‘factored equipment estimate’ ?“ What’s a “base cost”, “bare module cost” and what’s included in the latter?What factors are applied to get a total estimate of the plant?What do these factors take into account?
4 From Equipment Price to DFC Estimate Direct Field Cost (DFC)Direct Field Labour (DFL)Indirect Field Cost (IFC)Home Office EngineeringTotal Project Cost (ITC)Allowances0.25 x DFC1.0 to 1.6 x DFLEquipment PurchasePriceEquipmentFactor“Off Sites” CostDIRECT FIELD COSTSEquipment Costbulk materials & labour to installoff-sites (pipe racks, rail spurs …)INDIRECT FIELD COSTSengineering, freight, insurance, overheadCONTINGENCY AND FEESfirst fill of plant, taxes, dutiesescalationTanks and VesselsColumns and TraysPumps and CompressorsExchangersHeatersTOTAL PROJECTCOSTx FactorsPlus Off Sites, ie Piperacks,Rail Spurs, Tank Farms etcDirect FieldCost
5 Estimate Equipment Cost DIRECT FIELD COSTS bulk materials (piping, valves, instruments) & labour to installoff-sites (pipe racks, rail spurs …)INDIRECT FIELD COSTSengineering, freight, insurance, overhead, const supervisionCONTINGENCY AND FEESfirst fill of plant, taxes, dutiesescalationTOTAL PROJECT(CAPITAL)COST
6 Method 1: Lang Factored Estimate Total Capital Cost =Flang * (Sum Of Purchased Cost of Equipment)Flang = for fluid processing plant
7 Method 2: Equipment Cost Factor Direct Field Cost (DFC)Direct Field Labour (DFL)AllowancesIndirect Field Cost (IFC)Home Office EngineeringTotal Project Cost (ITC)0.25 x DFC1.0 to 1.6 x DFLEquipment PurchasePriceX EquipmentFactor“Off Sites” Cost1.18 x
8 From Equipment Price to “Direct Field Cost” x FactorsTanks and VesselsColumns and TraysPumps and CompressorsExchangersHeatersPlus Off Sites, ie Piperacks,Rail Spurs, Tank Farms etc
9 “Off Sites” Inside Battery Limits Rail Car Loading Cooling Tower Rail SpursOffice BldgPipe RacksCooling TowerRail Car LoadingSteam BoilersFire Water SysNitrogen PlantInsideBattery Limits
12 X Equipment Factor Direct Field Cost (DFC) Direct Field Labour (DFL) AllowancesIndirect Field Cost (IFC)Home Office EngineeringTotal Project Cost (ITC)0.25 x DFC1.0 to 1.6 x DFLEquipment PurchasePriceX EquipmentFactor“Off Sites” Cost1.18 x
13 Method 3: The CAPCOST Approach Equipment Parameters (Pressure, MOC, Size, Hp …)“Base Cost” = Purchase Cost of Equipment- in Carbon Steel and 0 bargWhich One Do We Want?Bare Module Factor = f (Factorpressure, Factormaterial)BARE MODULE COST (Directs and Indirects)- installed equipment in actual materials and actual pressureModule Factor = 1.18MODULE COST OF PLANT- for expansion to an existing Plant -contingency 15%, fees 3%CHEE470 StopsHereGrass Roots Factor = 1.30GRASS ROOTS COST OF PLANT- infrastruction (utilities, off-sites aux. Buildings, product storage, loading and unloading facilities ...)
14 Determine Equipment Cost Note: Price for Carbon Steel Construction and 0 Bar(g)Fixed Tube exch with28 m2 =$6500Convert ToToday’s $’s using the CEPCI value
15 Factor to Today’s Cost$6500 * (1999 CECPI / 1996 CECPI) = today’s cost$6500 x (390.6 / 381.7) = $6650 in 1999
23 Capital vs ExpenseOnce the plant is running ‘Expenses’ are small items or costs which are incurred yearly, or have about a 1 year life.i.e. Software, Office supplies, wages, advertising, heat, lighting, ...When Calculating Yearly Income Subtract your Expenses From Your Income
24 Capital vs Expense‘Capital’ are expensive items or items which have more than a year of life.i.e. House, lawnmower, TV, computer, chemical plant equip, first fill of chemicalsRevenue Canada etc. only allow you to subtract a % of the Capital every year to account for the wearing out of the facility (depreciation).This is called the “Capital Cost Allowance”
25 Capital vs Expense Capital Cost Allowance ( CCA ) Works Like a Bank AccountRevenue Canada allow a % of the remaining asset value to be claimedRemainingAsset ValueTime (years)
27 Taxable Income Income That’s Taxable (Net Income) Taxable Income = Income - Expenses CCACan’t use CCA if Expenses are greater than Income (can’t use CCA to claim a loss)CCA can be ‘banked’ for later years where profit is occurring
30 Capital - The PointCapital is only allowed to be ‘depreciated’ over years and thus it’s ability to minimize taxable income is limited.Expenses are claimed in the year they’re paid. They’re better for minimizing your taxes.The Games People play
31 The Capital Cost Estimate The tax implications of Capital money requires that you know how much Capital was spent on any asset.The business financial analysis (NPV etc.) requires that you know the Capital Cost and the Operating Cost well ahead of actually spending any significant amounts of money.
32 Capital Cost Estimate Summary: The cost to initially build the facility which will be depreciated over time.
33 Question 3 -CAPCOST - arrggh! “When our tube/shell design pressures are below those which CAPCOST recognizes, do we simply take the minimum CAPCOST pressure and size on that basis?”
34 Off The Shelf Items ASME Code Piping, Valves, Pumps and most equipment have been standarized in design pressures of the connecting FlangeStandards are called 150, 300, 600, 900, 1500, 2500 “lb” flange ratings.A 150lb rating 150 psig rating, temperature is important in the ultimate strength of the itemAlong with standard flanges are standard pipe wall thickness (Sch 40, Sch 80 etc.)ASMECode
36 Heat Exchanger Standards TEMA - Tubular Exchanger Manufacturers Associationdictates minimum requirements for exchanger mechanical designLegislation does not require TEMA standards be used.
37 ASME- Pressure Vessel Standards ASME CodeIt started in Chicago after a major explosion in a shoe factory that had a boiler. The boiler explosion caused the government to start regulating pressure vessels (including boilers).A tool for regulating manufacturers of pressure vessels, heating exchangers, and piping, not pumps, not compressors (no rotating equipment)
38 ASME- Pressure Vessel Standards Since the explosion in Chicago codes were developed for the guidance in the calculation of pressure vessels, tables of metal strength vs tempSafety factor of 4 has historically been applied to the mechanical strength of metal, recently (this year) it was reduced to 3.5
39 ASME Code Sections I - Power Boilers II - Materials (properties i.e. allowable stresses)III - Nuclear Power PlantsIV - Heating BoilersV - Non Destructive ExaminationVII - Guidelines for the Care and Operation of Heating BoilersIX - Welding and Brazing QualificationsX - Fiber-Reinforced Plastic Pressure VesselsXI - Rules for Inservice Inspection of Nuclear Power Plant Components
40 Minimum Design and CAPCOST Allowing CAPCOST to choose a minimum makes sense since the manufacturer would do the same.
41 Question 4 - Unknown Equipment To size the reactor cooling jacket do we send you our data? Is there significant expense in the jacket?Jacket cost is about $35,000 for the reactor.
42 CAPCOST - User Added Eq. Treat as an additional piece of equipment Bare Module factor is irrelevant
43 Question 5 - Storage Tanks How do you do the costing for the cone roof storage tanks?
44 User Added - Storage Tanks $239,000Multiply by 2 to get “bare module cost”
Your consent to our cookies if you continue to use this website.