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Chemical Plant Cost Analysis

The document discusses cost estimation for a chemical plant. It outlines the types of direct and indirect costs that must be included in the total capital investment estimate. These include the costs of purchased equipment, installation, instrumentation, piping, buildings, land, engineering, construction, contingency fees, and working capital. The total capital investment for the example plant is estimated to be approximately $29 million.

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Ali Ahsan
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84 views5 pages

Chemical Plant Cost Analysis

The document discusses cost estimation for a chemical plant. It outlines the types of direct and indirect costs that must be included in the total capital investment estimate. These include the costs of purchased equipment, installation, instrumentation, piping, buildings, land, engineering, construction, contingency fees, and working capital. The total capital investment for the example plant is estimated to be approximately $29 million.

Uploaded by

Ali Ahsan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Chapter # 9

COST ESTIMATION
COST ESTIMATION:

Before the plant is to be operated, specified money must be supplied to


purchase and install the equipment. The capital needed to supply the necessary
plant is called the working capital and sum of two capital and sum of two capitals
is called total capital investment.

An acceptable plant design must present a process that is capable of


operating under conditions which will yield a profit. It is essential that chemical
engineering be aware of the many different types of cost involved in
manufacturing processes. Capital must be allocated for direct plant expense; such
as those for raw materials, labor, and equipment, besides direct expenses, many
of there indirect expense are incurred, and these must be included if a complete
analysis of the total cost is to be obtained some example of these indirect
expenses are administrative salaries, product distribution costs and cost for
interplant communication.

ESTIMATION OF EQUIPMENT COST

EQUIPMENT COST ($)


Exchanger E-1 15,000
Condenser E-3 18,000
Condenser E-5 20,000
Condenser E-7 18,500
Condenser E-9 17,500
Condenser E-11 18,350
Reboiler E-2 205,500
Reboiler E-4 17,500
Reboiler E-6 16,300
Reboiler E-8 18,700
Reboiler E-10 19,000
Column C-1 37,500
Column C-2 24,570
Column C-3 34,300
Column C-4 55,560
Column C-5 48,780
Column C-6 50,060
Column C-7 45,000
Column C-8 52,550
Total 548,670

ESTIMATION OF TOTAL CAPITAL INVESTMENT

DIRECT COST

Purchased equipment cost = $ 548670

Purchased equipment installation = 0.47 ¿ 548670

Instrumentation & Process Control = 0.12 ¿ 548670 = $ 65840


Piping (installed) = 0.66 ¿ 548670 = $ 362120

Building (Including Services) = 0.18 ¿ 548670 $ 98760

Yard improvement = 0.1 ¿ 848670 = $ 384069

Land = 0.06 ¿ 548670 = $ 1805120

INDIRECT COST

Engg & Supervision = 0.33 ¿ 548670 = $ 181060

Construction expenses = 0.41 ¿ 548670 = $ 224954

Total indirect Cost = $ 406015

Contractor’s fee = 0.05 ¿ 2211135= $ 110555

Contingency = 0.1 ¿ 2211135 = $ 221113

Fixed Capital Investment = Total direct + indirect cost + contingency + contractor’s

fee = $ 2542803

Total Capital Investment = F.C.I + W.C

Now

W.C = 0.15 (T.C.I)

= 0.15 (2542803)
W.C = $ 381420

T.C.I = 2542803 + 381420

= $ 2924223

= 30 million $

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