W8_BUD_Estimate Single Equipment Cost

1.    Problem Definition

One of the Pertamina’s project require cost estimation of pressure vessel with the following specification:

Equipment	Specification
Pressure Vessel B	Volume                        = 1000 ft3 Temperature               = 302 oF Pressure                      = 150 psig Material                       = Carbon steel
Pressure Vessel C	Volume                        = 1400 ft3 Temperature               = 212 oF Pressure                      = 100 psig Material                       = Carbon steel

Here is available pressure vessel price database from other project on the same year:

Equipment	Specification	Price
Pressure Vessel A	Volume                        = 600 ft3 Temperature               = 212 oF Pressure                      = 100 psig Material                       = Carbon steel	$ 42,000

2.    Feasible Alternatives

There are 2 alternatives method to estimate price of specified vessel, as follows:

a. Using cost capacity factor.

b. Using cost estimation model based on vessel weight.

3.    Develop the Outcomes for each Alternative

a. Cost Capacity Factor

This method used to estimate equipment cost based on typical equipment with different capacity.

Where:

z            = specific cost capacity factor = 0.6 (for pressure vessel)

Using above equation, we can calculate equipment cost of Vessel B and C as follows:

Parameters	Unit	Vessel A (reference)	Vessel B	Vessel C
Capacity	ft3	600	1000	1400
Equipment Cost	$	42,000	57,100	69,900

b. Cost Estimation Model (based on vessel weight)

The main component of pressure vessel is steel plate, so the vessel main price component would base on the vessel weight. To calculate vessel weight based on available design specifications required basic knowledge of equipment design. Vessel weight depends on vessel dimensions, plate material and thickness.

 

Following are vessel’s weight calculation based on available design specifications:

Parameters	Unit	Vessel A (reference)	Vessel B	Vessel C
Capacity	ft3	600	1000	1400
Design Temperature	oF	212	302	212
Design Pressure	psig	100	150	100
Type		Vertical	Vertical	Vertical
Material		Carbon Steel	Carbon Steel	Carbon Steel
Length (L = 2xD)	ft	15.8	18.6	20.8
Diameter (D)	ft	7.9	9.3	10.4
Plate Thickness [3]	in	5/16	1/2	5/16
Head & Bottom Type		Elliptical	Elliptical	Elliptical
Vessel Weight [4]	lbs. of Steel	7,140	15,621	12,110

Because we know the price and vessel weight of reference (Vessel A), now we can calculate cost estimation model as follows:

Cost estimation model           = Price of Vessel A / Weight of Vessel A                                                = $ 42,000 / 7,140 lbs. of Steel                                                = $ 5.9 / lbs. of Steel

Using cost estimation model, we can calculate equipment cost of Vessel B and C as follows:

Parameters	Unit	Vessel A (reference)	Vessel B	Vessel C
Equipment Cost	$	42,000	91,900	71,300

4.    Selection Criteria

Both methods applied for Class 3 AACE Cost Estimate Classification System ^[1] with expected accuracy range +20% to -60%.

 

5.    Analysis and Comparison of the Alternatives

 

Graphic shown that there are contrary results between using cost capacity factor and cost estimation model. Equipment cost of Vessel C is higher than Vessel B using cost capacity factor while the opposite result using cost estimation model. Cost capacity factor method only consider capacity as a single variable to operating cost, while the cost estimation model also consider design temperature and design pressure as a variable. Equipment cost estimate for both methods shown almost the same result for Vessel C which is design temperature and pressure same with design temperature and pressure of reference Vessel A.

6.    Select the Preferred Alternative

Based on comparison of cost estimation using cost capacity factor and cost estimation model, it can be concluded:

1. If the available equipment cost database is based on the same design condition (pressure & temperature) we can directly using cost capacity factor.

2.   If the design condition (pressure & temperature) is different we must use cost estimation model rather than cost capacity factor.

7.    Performance Monitoring & Post Evaluation of Result

To ensure the accuracy of cost estimate, the result will be compared with price from vendor quotation (deterministic methods).

References:

1. AACE International (2011). Recommended Practice No. 17R-97: Cost Estimate Classification System.

2. Peter, M.S., Timmerhaus, K.D. (1991). Plant Design and Economics for Chemical Engineer 4^th Edition: Chapter 6, p. 150-215

3. Online Pressure Vessel Thickness Calculation. Retrieved from: http://checalc.com/calc/vesselThick.html

4. Vessel-Weight-Calculator.xls. Retrieved from: http://www.scribd.com/doc/102755471/Vessel-Weight-Calculator#