PROJECTS COST BENCHMARKING

March 3, 2016

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This application has been structured as a reference in estimating project costs for project managers and estimators, within the context of the Oil and Gas Project Management.
Knowing that projects are budget intrinsically uncertain and that, regardless of the stage of a project, there will be incomplete information on which to base the project estimate. The objective is to establish a set of project parameters, undertake the departmental risk management process to assign contingencies and convey meaningful information on the reliability of the figures provided.
Benchmarking helps organizations compare with their peers, identify the best quartile interpreters, learn about internal and external best practices, and make the necessary changes to become or remain an industry leader. Measuring and comparing is a key way to improve and grow your business. The answers are in the data.
Organizations that believe that cost estimation should be exercised in the broader context of project and program management to ensure that the estimated values are continuously reliable.
Cost Benchmarking is an integral part of a system of basic interdependent contributions of scope, time, risk, cost and quality.

BENCHMARKING

Benchmarking is the process of comparing one's business processes and performance metrics to industry bests and/or best practices from other industries. Dimensions typically measured are quality, time and cost. In the process of benchmarking, management identifies the best firms in their industry, or in another industry where similar processes exist, and compare the results and processes of those studied (the "targets") to one's own results and processes. In this way, they learn how well the targets perform and, more importantly, the business processes that explain why these firms are successful.

“Learn from the successes of others and ourselves

TYPES OF BENCHMARKING:

Internal Benchmarking
Competitive Benchmarking
Industrial or functional Benchmarking

Process or generic Benchmarking
Construction Project Cost & Metrics Benchmarking

INTERNAL BENCHMARKING

Activities and similar projects in different places, departments, etc.

Pros

“Share” – Communication
Data easy to find
Good results, immediate benefit
Good practices

Cons

Limited interest
Internal bias
“Miss the train”

COMPETITIVE BENCHMARKING

Made with direct competitors, the same customer base

Pros

Directly relevant
Comparison of practices and technologies
History of the information

Cons

Difficulties in data collection
The ethical conflicts
Antagonism

INDUSTRIAL OR FUNCTIONAL BENCHMARKING

Made with leaders of similar Industries

Pros

Willing partners
Easily transferable

Cons

High Cost
Some “Willing partners” not too Willing!

PROCESS OR GENERIC BENCHMARKING

State of art of Processes, products and services. Divide the company into generic functions

Pros

State of art of Processes, products and services
Divide the company into generic functions

Cons

It is difficult to do it!
Transfer of practices (Learning!)
Some of the information is not transferable
Time-consuming

BENCHMARKING STYLES

➢Focused on data for example, from a database of a particular industry.

➢Process focused on following the steps of the model.

➢Focused on the population designed by the participants.

➢Focused on the strategy each step deployed from the strategic plan.

➢Focused on a hybrid Strategy / people

PROJECT MANAGEMENT BENCHMARKING - COST BENCHMARKING

Project management Benchmark is the process of continuously comparing the project management practices of your organization with the project management practices of leaders anywhere in the world; its goal is to gain information to help you improve your own performance. The information obtained through benchmarking might be used to help you improve your processes and the way in which those processes are executed, or the information might be used to help your company become more competitive in the marketplace. Benchmarking is a continuous effort of analysis and evaluation. Care must be taken in deciding what to benchmark. It is impossible and impractical to evaluate every aspect of project management. It is best to decide on those few critical success factors that must go right for your business to flourish. The project cost estimation process must be subject to a continuous review with regard to the process itself, and above all the results. In the field of best practices framed in Project Management, the cost estimating quality assurance and review of the process is included together with the activity itself of validation and defense of the cost estimate.

The Project Cost Benchmarking Exercise allows to Managers and the design team to understand where and how the funds have been allocated. Cost Benchmarking Provides an essential framework in which the design and allocation of costs can be considered and balanced between different elements and priorities in light of the information available from other similar projects. Cost Benchmarking is a support of the decision-making process, identifying the factors that determine the value, cost, time and quality, the areas of improvement, while guaranteeing a better estimate. the process consists in to draw on a large amount of statistical data collected from previous comparable projects and current information on market costs. These data allow to carry out cost benchmarking exercises against functional and elementary cost breakdowns. These data can be presented in graphic form to facilitate the analysis of any difference and allow the reallocation of costs to achieve the best value for money.

PROJECT COST, TIME & TECHNICAL BENCHMARKING

Project Cost Benchmarking is a process by which the estimated performance (often time, cost and technical metrics) of a project is compared to other similar projects. This can highlight areas of design that are not offering good value for money and can help in the assessment of tenders from suppliers and contractors. These practices of Benchmarking are increasingly being carried out on public and private projects, where the “Owner” government or private company has access to large amounts of cost data for similar projects. In the private sector, comparable cost information may not be so readily available. However, large organizations may have access to in-house cost information, and some cost information is published. Comparative information can also be purchased.

It is important, however, that benchmarking does not simply consider construction costs, as these are only a small proportion of whole-life costs, and setting a low benchmark for construction could result in higher operating, maintenance and refurbishment costs throughout the of the project’s life.

SCHEDULE, COST AND TECHNICAL METRICS BENCHMARKING KEY PROCESSES:

All the referred processes are based on the use of past information to assist or support future estimates by:

Use of statistical measures to evaluate the estimated figure in case data are not available in a specific project.
Verification against relationships (Reasons / Ratios) known from other similar projects.
Provide a validity check.
Data collection must be done in appropriate formats throughout the life cycle of the project, from design to the awarding of contracts.

Project Cost Benchmarking Process – Benchmarking Sub-Processes

There are many ways to focus the Project Cost Estimation as a Cost Benchmarking activity, and there is a very close interaction between them:

Estimating accuracy always depends of a very strong database collection
Database collection is the result of a Benchmarking Process

For Cost Estimation – Benchmarking, the standard approach used for the top runners in Oil & Gas Industry. Despite the that the main purpose of Cost Benchmarking in this business is more focused in the Gatekeeper approval, the information gathered in the process is very valuable for Cost Estimation purposes.

Oil & Gas Industry Project Cost is a very sensitive and specialized subject. organizing information about Cost of any Project Component is mainly delegated to worldwide recognized corporations based on confidential agreements.

Since the very strategical sensitivity of the data to be share, Professional Cost Estimating Databases has to be always non-personalized, it means, all information related to the identification of the Project and Company must be removed to protect the “Confidentiality” and solve the objective of having “Professional Cost Estimating Databases” in order to provide tools to give to Managers strong “Decision Make Tool” as part of the “Project Cost Life Cycle” process.

Project Cost Benchmarking Process – Benchmarking Cycle

COST BENCHMARKING PROCESS

ORDER OF MAGNITUDE AND PRELIMINARY PROJECT COST ESTIMATION METHODS

LANG FACTORS METHOD


Type of plant	Lang factors
	Fixed capital investment	Total capital investment
Solid processing	4.00	4.70
Solid-fluid processing	4.30	5.00
Fluid processing	5.00	6.00
* Adapted from M. S. Peters, K. D. Timmerhaus, and R. West, Plant Design and Economics for Chemical Engineers, 5th ed., McGraw-Hill, New York, 2004.

HAND FACTORS METHOD


Equipment type	Factor
Fractionating columns	4
Pressure vessels	4
Heat exchangers	3.5
Fired heaters	2
Pumps	4
Compressors	2.5
Instruments	4
Miscellaneous equipment	2.5
* Adapted from W. E. Hand, Petroleum Refiner, September 1958, pp. 331–334.

WROTH FACTORS METHOD


Equipment	Factor
Blender	2
Blowers and fans	2.5
Centrifuge	2
Compressors
Centrifugal (motor-driven)	2
Centrifugal (steam-driven, including turbine)	2
Reciprocating (steam and gas)	2.3
Reciprocating (motor-driven less motor)	2.3
Ejectors, vacuum	2.5
Furnaces (packaged units)	2
Heat exchangers	4.8
Instruments	4.1
Motors, electric	3.5
Pumps
Centrifugal (motor-driven less motor)	7
Centrifugal (steam-driven including turbine)	6.5
Positive-displacement (less motor)	5
Reactors (factor as appropriate, equivalent-type equipment)	—
Refrigeration (packaged units)	2.5
Tanks
Process	4.1
Storage	3.5
Fabricated and field-erected 50,000+ gal	2
Towers (columns)	4
* Abstracted from W. F. Wroth, Chemical Engineering, October 17, 1960, p. 204

HAPPEL METHOD


Item	Factor	Labor
Vessels	A	10% of A
Towers, field fabricated	B	30 to 35% of B
Towers, prefabricated	C	10 to 15% of C
Exchangers	D	10% of D
Pumps, compressors and other machinery	E	10% of E
Instruments	F	10 to 15% of F
Key accounts (Sum of A to F)	G
Insulation	H = 5 to 10% of G	150% of H
Piping	I = 40 to 50% of G	100% of I
Foundations	J = 3 to 5% of G	150% of J
Buildings	K = 4% of G	70% of K
Structures	L = 4% of G	20% of L
Fireproofing	M = 0.5 to 1% of G	500 to 800% of M
Electrical	N = 3 to 6% of G	150% of N
Painting and cleanup	O = 0.5 to 1% of G	500 to 800% of O
Sum of material and labor	P
Installed cost of special equipment	Q
Subtotal	R = P+Q
Overheads	S = 30% of R
Total erected cost	T = R+S
Engineering fee	U = 10% of T
Contingency fee	V = 10% of T
Total investment	W = T+U+V

CHILTON METHOD


Item	Factor	% of item
1. Delivered equipment cost	1.0	1
2. Installed equipment cost (or directly from cost data)	1.43	1
3. Process piping
Type of plant
Solid	0.07–0.10	2
Solids–fluid	0.10–0.30	2
Fluid	0.30–0.60	2
4. Instrumentation
Amount
None	0.03–0.05	2
Some	0.05–0.12	2
Extensive	0.12–0.20	2
5. Buildings and site development
Type of plant
Outdoor	0.10–0.30	2
Outdoor–indoor	0.20–0.60	2
Indoor	0.60–1.00	2
6. Auxiliaries
Extent
Existing	0	2
Minor addition	0–0.05	2
Major addition	0.05–0.75	2
New facilities	0.25–1.00	2
7. Outside lines
Average length
Short	0–0.05	2
Intermediate	0.05–0.15	2
Long	0.15–0.25	2
8. Total physical plant costs
S of items	2–7
9. Engineering and construction
Complexity
Simple	0.20–0.35	8
Difficult	0.35–0.60	8
10. Contingencies
Process
Firm	0.10–0.20	8
Subject to change	0.20–0.30	8
Speculative	0.30–0.50	8
11. Size factor
Size of plant
Large commercial unit >.$10MM	0–0.05	8
Small commercial unit $0.5MM to $10MM	0.05–0.15	8
Experimental unit <,$0.5MM	0.15–0.35	8
12. Total fixed plant cost - (∑ items 8–11)

PETERS AND TIMMERHAUS METHOD


Direct costs	Solid	Solid–fluid	Fluid
1. Purchased equipment delivered including fabricated equipment and process machinery	100	100	100
2. Purchased equipment installation	45	39	47
3. Instrumentation and controls (installed)	9	13	18
4. Piping (installed)	16	31	66
5. Electrical (installed)	10	10	11
6. Building (including services)	25	29	18
7. Yard improvements	13	10	10
8. Service facilities (installed)	40	55	70
9. Land (if purchase is required)	6	6	6
10. Total direct plant costs	264	293	346
Indirect costs
11. Engineering and supervision	33	32	33
12. Construction expenses	39	34	41
13. Total direct and indirect costs	336	359	420
14. Contractor’s fee (about 5% of the direct and indirect plant costs	17	18	21
15. Contingency (about 10% of the direct and indirect plant costs)	34	36	42
16. Total	387	413	483

HOLLAND METHOD


Ctc = f1f2f3*Ceq
Ctc = fixed capital cost of plant
Ceq = major process equipment cost, delivered
f1 = 1.45 for solids processing
f1 = 1.39 for mixed solids–fluid processing
f1 = 1.47 for fluid processing
f2 = 1 + f1 + f2 + f3 + f4 + f5
f3 = 1 + f6 + f7 + f8
Process piping factor range:
f1 = 0.07–0.10 for solids processing
f1 = 0.10–0.30 for solids–fluid processing
f1 = 0.30–0.60 for fluid processing
Instrumentation factor ranges:
f2 = 0.02–0.05 for little automatic control
f2 = 0.05–0.10 for some automatic control
Buildings factor ranges:
f3 = 0.05–0.20 for outdoor units
f3 = 0.20–0.60 for mixed indoor outdoor units
f3 = 0.60–1.00 for indoor units
Facilities factor range:
f4 = 0–0.05 for minor additions
f4 = 0.05–25 for major additions
f4 = 0.25–1.00 for a new site
Outside lines factor ranges:
f5 = 0–0.05 for existing plant
f5 = 0.05–0.15 for separated units
f5 = 0.15–0.25 for scattered units
Engineering and construction factor ranges:
f6 = 0.20–0.35 for straightforward plants
f6 = 0.35–0.50 for complex plants
Size factor ranges:
f7 = 0–0.05 for large plants
f7 = 0.05–0.15 for small plants
f7 = 0.15–0.35 for experimental units
Contingency factor ranges:
f8 = 0.10–0.20 for a firm process
f8 = 0.20–0.30 for a process subject to change
f8 = 0.30–.50 for a tentative process

PROCESS PLANT COST CORRELATIONS - FUNCTIONAL UNITS - CURVES - FOR CLASS V (ORDER OF MAGNITUDE ESTIMATIONS)

Source: Chemical Engineering Design Principles, Practice and Economics of Plant and Process Design - Second Edition - Gavin Towler; Ray Sinnott


CAF INDEX Jan 2006	196.99
CAF-PROCESS PLANT INDEX	279.56
PROCESS PLANT COST CORRELATIONS - FUNCTIONAL UNITS - CURVES - FOR CLASS V (ORDER OF MAGNITUDE ESTIMATIONS)
Process	Licensor	Units	Capacity		a	n
			Low	High
ABS Resin (15% Rubber) by emulsion polymerization	Generic	MMlb/y	50	300	17.2371	0.6	12.146
Acetic Acid by Cativa process	BP	MMlb/y	500	2,000	4.9302	0.6	3.474
Acetic Acid by Low Water Methanol Carbonylation	Celanese	MMlb/y	500	2,000	3.9339	0.6	2.772
Acrolein by propylene oxidation with Bi/Mo catalyst	Generic	MMlb/y	30	150	9.6630	0.6	6.809
Adipic acid from phenol	Generic	MMlb/y	300	1000	5.0139	0.6	3.533
Alkylation (sulfuric acid effluent refrigeration process)	Stratco/DuPont	bpd	4,000	20,000	0.2271	0.6	0.16
Alkylation (HF process)	UOP	bpd	5,000	12,000	0.2171	0.6	0.153
Allyl chloride by propylene chlorination	Generic	MMlb/y	80	250	10.7586	0.6	7.581
Alpha olefins (full range process)	Chevron Phillips	MMlb/y	400	1,200	7.4364	0.6	5.24
Alpha olefins (full range process)	Shell	MMlb/y	400	1,000	11.5605	0.6	8.146
Benzene by Sulfolane extraction	UOP/Shell	MMgal/y	50	200	11.0595	0.6	7.793
Benzene by toluene hydrodealkylation	Generic	MMgal/y	50	200	9.9369	0.6	7.002
Benzene reduction by Bensat™ process	UOP	bpd	8,000	15,000	0.0390	0.6	0.0275
Biodiesel (FAME) from vegetable oil	Generic	MMlb/y	100	500	3.8984	0.6	2.747
bis-HET by Eastman Glycolysis	Eastman	MMlb/y	50	200	0.7096	0.6	0.5
BTX Aromatics by Cyclar™ process	BP/UOP	tpy	200,000	800,000	0.0624	0.6	0.044
BTX Aromatics by CCR Platforming™ process	UOP	tpy	200,000	800,000	0.0213	0.6	0.015
Butadiene by extractive distillation	UOP/BASF	MMlb/y	100	500	7.8252	0.6	5.514
Butadiene by Oxo-D plus extractive distillation	Texas Petrochem.	MMlb/y	100	500	16.0564	0.6	11.314
Butene-1 by Alphabutol ethylene dimerization	Axens	tpy	5,000	30,000	0.0356	0.6	0.0251
Butene-1 by BP Process	BP	tpy	20,000	80,000	0.2398	0.6	0.169
Caprolactam from nitration-grade toluene	SNIA BPD S.p.A.	tpy	40,000	120,000	0.4555	0.6	0.321
Carbon monoxide by steam methane reforming	Generic	MMscf/y	2,000	6,000	0.5152	0.6	0.363
Catalytic Condensation for Gasoline Production	UOP	bpd	10,000	30,000	0.3151	0.6	0.222
Catalytic reforming by CCR Platforming process	UOP	bpd	15,000	60,000	0.2540	0.6	0.179
Coking by Flexicoking including Fluid Coking	ExxonMobil	bpd	15,000	40,000	0.4868	0.6	0.343
Coking by Selective Yield Delayed Coking	Foster Wheeler/UOP	bpd	15,000	60,000	0.1547	0.68	0.109
Copolymer polypropylene by INNOVENE	BP	MMlb/y	300	900	4.8677	0.6	3.43
Copolymer polypropylene by Unipol	Dow	MMlb/y	300	900	5.1672	0.6	3.641
Copolymer polypropylene by SPHERIPOL Bulk	Basell	MMlb/y	300	900	5.1785	0.6	3.649
Copolymer polypropylene by BORSTAR	Borealis	MMlb/y	300	900	5.6979	0.6	4.015
Crude distillation by D2000	TOTAL/Technip	bpd	150,000	300,000	0.2143	0.6	0.151
Cumene by Q-Max™ process	UOP	tpy	150,000	450,000	0.0170	0.6	0.012
Cyclic Olefin Copolymer by Mitsui Process	Mitsui	MMlb/y	60	120	17.3748	0.6	12.243
Cyclohexane by liq-phase hydrogenation of benzene	Axens	tpy	100,000	300,000	0.0087	0.6	0.0061
Dewaxing by ISODEWAXING	Chevron Lummus	bpd	6,000	15,000	0.3633	0.6	0.256
2,6-Dimethylnaphthalene by MeOH alkylation	Exxon Mobil/Kobe	MMlb/y	50	100	10.9445	0.6	7.712
Dimethyl terephthalate by methanolysis	Generic	MMlb/y	30	80	7.3413	0.6	5.173
Dimethyl terephthalate by Huels Oxidation	Huels	MMlb/y	300	800	10.6593	0.6	7.511
Ethanol by ethylene hydration	Generic	Mgal/y	30	90	13.6849	0.6	9.643
Ethanol (fuel grade) by Corn Dry Milling	Generic	tpy	100,000	300,000	0.1228	0.6	0.0865
Ethylbenzene by EBOne™ process	ABB Lummus/UOP	tpy	300,000	700,000	0.0121	0.6	0.0085
Ethylene by ethane cracking	Generic	MMlb/y	500	2,000	13.5870	0.6	9.574
Ethylene by UOP/Hydro MTO process	UOP/INEOS	MMlb/y	500	2,000	12.2502	0.6	8.632
Ethylene: light naphtha cracker (max ethylene)	Generic	MMlb/y	1,000	2,000	23.2898	0.6	16.411
Ethylene by ethane/propane cracker	Generic	MMlb/y	1,000	2,000	11.1801	0.6	7.878
Ethylene by gas oil cracker	Generic	MMlb/y	1,000	2,000	24.2917	0.6	17.117
Ethylene glycol via ethylene oxide hydrolysis	Shell	MMlb/y	500	1,000	8.2198	0.6	5.792
Expandable polystyrene by suspension process	Generic	MMlb/y	50	100	4.9188	0.6	3.466
Fischer Tropsch process	ExxonMobil	tpy	200,000	700,000	0.6755	0.6	0.476
Fluid catalytic cracking	KBR	bpd	20,000	60,000	0.2980	0.6	0.21
Fluid catalytic cracking with power recovery	UOP	bpd	20,000	60,000	0.4286	0.6	0.302
Gas to liquids by Syntroleum process	Syntroleum	bpd	30,000	100,000	3.2343	0.6	2.279
Gas sweetening by Amine Guard™ FS process	UOP	MMscf/d	300	800	0.5478	0.6	0.386
Gasification by GE Gasification process Maya crude	GE Energy	bpd	7,000	15,000	0.9664	0.6	0.681
Gasoline desulfurization, ultra-deep by Prime-G+	Axens	bpd	7,000	15,000	0.0596	0.58	0.042
Glucose (40% Solution) by basic wet corn milling	Generic	MMlb/y	300	800	4.7073	0.6	3.317
HDPE Pellets by BP Gas Phase process	BP Amoco	MMlb/y	300	700	5.1430	0.6	3.624
HDPE Pellets by Phillips Slurry process	Phillips	MMlb/y	300	700	4.7826	0.6	3.37
HDPE Pellets by Zeigler Slurry process	Zeigler	MMlb/y	300	700	6.3692	0.6	4.488
High impact polystyrene by bulk polymerization	Dow	MMlb/y	70	160	4.2149	0.6	2.97
Hydrocracking by ISOCRACKING	Chevron Lummus	bpd	20,000	45,000	0.3136	0.6	0.221
Hydrocracking by Unicracking™ (distillate) process	UOP	bpd	20,000	45,000	0.1930	0.66	0.136
Hydrocracking	Axens	bpd	20,000	45,000	0.2810	0.6	0.198
Hydrogen by steam methane reforming	Foster Wheeler	MMscf/d	10	50	2.4963	0.79	1.759
Hydrotreating by Unionfining™ process	UOP	bpd	10,000	40,000	0.0755	0.68	0.0532
Isomerization by Once-through Penex™ process	UOP	bpd	8,000	15,000	0.0644	0.6	0.0454
Isomerization by Penex-Molex™ process	UOP	bpd	8,000	15,000	0.1703	0.6	0.12
Isophthalic acid by m-Xylene oxidation	Generic	MMlb/y	160	300	14.0695	0.6	9.914
Isoprene via isobutylene carbonylation	IFP	MMlb/y	60	200	14.2256	0.6	10.024
Isoprene by propylene dimerization and pyrolysis	Generic	MMlb/y	60	200	9.2515	0.6	6.519
Linear alkylbenzene by PACOL/DeFine/PEP/Detal6	UOP	MMlb/y	100	250	6.9482	0.6	4.896
Linear alpha olefins	Chevron	MMlb/y	300	700	7.3768	0.6	5.198
Linear alpha olefins by Linear-1™ process	UOP	tpy	200,000	300,000	0.1731	0.6	0.122
Maleic anhydride by fluid bed process	Generic	MMlb/y	70	150	11.2922	0.6	7.957
Methacrylic acid by isobutylene oxidation	Generic	MMlb/y	70	150	10.9147	0.6	7.691
Methanol via steam reforming & synthesis	Davy Process Tech.	tpd	3,000	7,000	3.9382	0.6	2.775
m-Xylene by MX Sorbex™ process	UOP	MMlb/y	150	300	6.1393	0.6	4.326
Naphthalene by 3-stage fractional crystallizer	Generic	MMlb/y	20	50	3.3705	0.6	2.375
N-Butanol from crude C4s	BASF	MMlb/y	150	300	11.6882	0.6	8.236
Norbornene by Diels-Alder reaction	Generic	MMlb/y	40	90	10.6181	0.6	7.482
Pentaerythritol by condensation	Generic	MMlb/y	40	90	8.8272	0.6	6.22
PET resin chip with comonomer by NG3	DuPont	MMlb/y	150	300	6.7481	0.6	4.755
Phenol from cumene (zeolite catalyst)	UOP/Sunoco	MMlb/y	200	600	8.7874	0.6	6.192
Phthalic anhydride by catalytic oxidation	Generic	MMlb/y	100	200	10.2222	0.6	7.203
Polycarbonate by interfacial polymerization	Generic	MMlb/y	70	150	29.3482	0.6	20.68
Polyethylene terephthalate (melt phase)	Generic	MMlb/y	70	200	7.6478	0.6	5.389
Polystyrene by bulk polymerization, plug flow	Generic	MMlb/y	70	200	3.6203	0.6	2.551
Propylene by Oleflex™ process	UOP	tpy	150,000	350,000	0.1338	0.6	0.0943
Propylene by metathesis	Generic	MMlb/y	500	1,000	2.6950	0.6	1.899
Purified terphthalic acid	EniChem/ Technimont	MMlb/y	350	700	15.0417	0.6	10.599
p-Xylene by Isomar™ and Parex™ processes	UOP	tpy	300,000	700,000	0.0326	0.6	0.023
p-Xylene by Tatoray™ Process	UOP	bpd	12,000	20,000	0.0979	0.6	0.069
Refined Glycerine by distillation/adsorption	Generic	MMlb/y	30	60	4.0843	0.6	2.878
Sebaccic Acid by cyclododecanone route	Sumitomo	MMlb/y	8	16	19.0806	0.6	13.445
Sorbitol (70%) by continuous hydrogenation	Generic	MMlb/y	50	120	6.3067	0.6	4.444
Styrene by SMART™ process	ABB Lummus/UOP	tpy	300,000	700,000	0.0504	0.6	0.0355
Vinyl acetate by Cativa Integrated Process	BP	MMlb/y	300	800	10.7813	0.6	7.597
Vinyl acetate by Celanese VAntage Process	Celanese	MMlb/y	300	800	9.4331	0.6	6.647
Visbreaking by coil-type visbreaker	Foster Wheeler/UOP	bpd	6,000	15,000	0.3945	0.48	0.278
Notes:
1. Values of a are in January 2006 MM$ on a U.S. Gulf Coast (USGC) basis (Nelson Farrar index = 1961.6, CE index = 478.6).
2. Low and High indicate the bounds of the region over which the correlation can be applied.
3. S is based on product rate for chemicals, feed rate for fuels.
4. If the index n is 0.6 then the correlation is an extrapolation around a single cost point.
5. Correlations are based on data taken from Hydrocarbon Processing (2003, 2004a, 2004b), except where the licensor is stated as “Generic,” in which cases the correlations are based on data from Nexant PERP reports (see www.chemsystems.com for a full list of reports available).
6. PACOL™/DeFine™/PEP™/Detal™ processes.

Source: Perry’s chemical engineers’ handbook. — 7th edition


CAF INDEX Jan 1992	125.82
CAF-PROCESS PLANT INDEX	279.56
Capital-Cost Data for Processing Plants*
Chemical plants
Product	Process route	Size, 1000 metric tons/year	Approximate cost† $ × 10	Total capital cost ($) metric ton/yr of product	Size range 1000 metric tons/year	Exponent n
Acetaldehyde	Ethylene	50	30.4401	610	20–150	0.7	13.7	274
Acetic acid	Methanol/CO	10	14.6646	1470	3–30	0.68	6.6	660
Acetone	Propylene	100	77.7667	780	30–300	0.45	35	350
Ammonia	Steam reforming	100	57.7695	580	30–300	0.7	26	260
Ammonium nitrate	Ammonia/nitric acid	100	13.3314	130	30–300	0.65	6	60
Butanol	Propylene/CO/H2O	50	97.7638	1960	20–150	0.4	44	880
Chlorine	Electrolysis of NaCl	50	68.8790	1380	20–150	0.45	31	620
Ethylene	Refinery gases	50	31.9954	640	20–150	0.83	14.4	288
Ethylene oxide	Ethylene/O2	50	122.2047	2440	20–150	0.78	55	1100
Formaldehyde (37%)	Methanol	10	39.3277	3930	3–30	0.55	17.7	1770
Glycol	Ethylene/Cl2	5	36.8836	7380	2–20	0.75	16.6	3320
Hydrofluoric acid	Hydrogen fluoride/H2O	10	19.5528	1960	3–30	0.68	8.8	880
Methanol	CO2/natural gas/steam	60	31.9954	530	20–200	0.6	14.4	240
Nitric acid (conc.)	Ammonia oxidation	100	14.6646	150	30–300	0.6	6.6	66
Phosphoric acid	Calcium phosphate/H2SO4	5	7.3323	1470	2–20	0.6	3.3	660
Polyethylene (high density)	Ethylene	5	39.3277	7870	2–20	0.65	17.7	3540
Propylene	Refinery gases	10	7.3323	730	3–30	0.7	3.3	330
Sulfuric acid	Sulfur	100	7.3323	70	30–300	0.65	3.3	33
Urea	Ammonia/CO2	60	19.5528	330	20–200	0.7	8.8	147
Refinery units
Alkylation (H2SO4)	Catalytic	10	46.6600	4670	3–30	0.6	21	2100
Coking (delayed)	Thermal	10	63.9908	6400	3–30	0.38	28.8	2880
Coking (fluid)	Thermal	10	39.3277	3930	3–30	0.42	17.7	1770
Cracking (fluid)	Catalytic	10	39.3277	3930	3–30	0.7	17.7	1770
Cracking	Thermal	10	12.2205	1220	3–30	0.7	5.5	550
Distillation (atm)	65% vaporized	100	78.6554	790	30–300	0.9	35.4	354
Distillation (vac.)	65% vaporized	100	46.6600	470	30–300	0.7	21	210
Hydrotreating	Catalytic desulfurization	10	7.3323	730	3–30	0.65	3.3	330
Reforming	Catalytic	10	71.1009	7110	3–30	0.6	32	3200
Polymerization	Catalytic	10	12.2205	1220	3–30	0.58	5.5	550
*Adapted from M. S. Peters and K. D. Timmerhaus, “Plant Design and Economics for Chemical Engineers”, 4th ed., McGraw-Hill, New York, 1991.
†All costs are approximate U.S.A. values with M & S = 1000, assuming 330 operating days per year.
‡Exponents apply roughly for threefold capacity ratio extending either way from the plant size given.

PROCESS PLANT COST CORRELATIONS - RATIO ESTIMATING FACTORS

This material of reference is an adaptation and update from "Conceptual Cost Estimating Manual - 2nd Edition - John S. Page" 1996 by Elsevier

REFINERY PROCESS SYSTEMS - Ratio Percentages - Direct Cost


REFINERY PROCESS SYSTEMS - RATIO PERCENTAGES - DIRECT COST
Discipline	Percentage Range (%)			Average Percent of Total (%)
	Material	Sub-Cont (1)	Labor (1)	Total	Material (2)	Sub-Cont (2)	Labor (2)
1.- Process Equipment	100	44.3 - 44.6	7.7 - 7.8	49.97	55.83	92.82	10.03
2.- Site Preparation	0.02 - 0.06	0.25 - 0.30	2.75 - 2.85	1.01	0.01	0.55	3.59
3.- Site improvements	0.95 - 1.10	*	1.10 - 1.12	0.69	0.55	*	1.43
4.- Concrete	4.25 - 4.75	0.10 - 0.12	12.7 - 12.9	5.63	2.41	0.22	16.42
5.- Structural Steel	8.00 - 8.30	*	3.70 - 3.75	3.9	4.53	*	4.82
6.- Buildings	1.10 - 1.25	2.20 - 2.40	1.70 - 1.75	1.71	0.66	4.81	2.21
7.- Underground Pipes	1.10 - 1.20	*	1.40 - 1.48	0.83	0.62		1.84
8.- Above-ground Pipes	32.0 - 35.0	0.75 - 0.80	21.3 - 22.4	18.19	18.59	1.6	27.51
9.- Underground electricity	0.20 - 0.50	*	0.65 - 0.70	0.32	0.16	*	0.87
10.- Above-ground - Electricity	11.5 - 12.0	*	6.10 - 6.25	5.81	6.47	*	7.9
11.- Instrumentation	10.2 - 10.7	*	3.20 - 3.50	4.48	5.82	*	4.16
12.- Insulation	4.5 - 5.0	*	7.40 - 7.50	3.94	2.55	*	9.57
13.- Painting	1.5 - 1.7	*	3.90 - 4.00	1.84	0.93	*	5.06
14.- Paving	0.4 - 0.6	*	0.60 - 0.70	0.36	0.27	*	0.81
14.- Others	1.0 - 1.1	*	2.80 - 2.95	1.32	0.6	*	3.79
	176.9 - 183.3	47.6 - 48.2	77.0 - 79.7	100	100	100	100
* Not applicable or no significant trend data available.

FLUID TYPE PROCESS PLANT - Ratio Percentages - Direct Cost


FLUID TYPE CHEMICAL PLANT - RATIO PERCENTAGES - DIRECT COST
Discipline	Percentage Range (%)			Average Percent of Total (%)
	Material	Sub-Cont (1)	Labor (1)	Total	Material (2)	Sub-Cont (2)	Labor (2)
1.- Process Equipment	100	24.0 - 25.0	3.75 - 5.50	37.6	43.50	61.3	5.44
2.- Site Preparation	1.75 - 2.50	0.01 - 0.01	0.5 - 1.0	0.82	1.00	0.01	0.72
3.- Site improvements	2.75 - 3.50	0.60 - 0.75	1.50 - 2.25	1.7	1.20	5.85	2.95
4.- Concrete	7.50 - 8.75	2.00 - 3.00	9.0 - 12.0	6.39	3.58	6.39	15.04
5.- Structural Steel	11.50 - 12.50	*	4.0 - 6.0	4.89	5.20	*	6.51
6.- Buildings	4.0 - 5.0	3.00 - 3.50	3.5 - 4.5	3.55	1.90	18.23	6.08
7.- Underground Pipes	4.0 - 5.0	0.01 - 0.02	2.75 - 3.25	2.17	2.00	0.02	4.04
8.- Above-ground Pipes	37.0 - 42.0	2.75 - 3.25	24.0 - 27.0	20.4	18.30	7.35	30.5
9.- Underground electricity	0.40 - 0.60	*	0.20 - 0.40	0.25	0.20	*	0.39
10.- Above-ground - Electricity	15.0 - 17.0	*	6.50 - 7.75	6.85	7.20	*	9.5
11.- Instrumentation	22.0 - 25.0	*	3.25 - 4.50	8.24	10.90	*	4.59
12.- Insulation	7.5 - 8.5	*	4.50 - 5.25	3.74	3.60	*	6.44
13.- Painting	2.5 - 3.5	*	2.75 - 2.90	1.7	6.30	*	3.93
14.- Paving	1.0 - 1.5	0.30 - 0.40	0.50 - 1.00	0.66	0.50	0.85	1.05
15.- Others	1.0 - 1.5	*	2.00 - 2.40	1.04	0.60	*	3.09
	217.9 - 237.5	32.57 - 36.43	68.7 - 85.7	100	100	100	100
* Not applicable or no significant trend data available.

SOLID TYPE PROCESS PLANTS - Ratio Percentages - Direct Cost


SOLID TYPE CHEMICAL PLANT - RATIO PERCENTAGES - DIRECT COST
Discipline	Percentage Range (%)			Average Percent of Total (%)
	Material	Sub-Cont (1)	Labor (1)	Total	Material (2)	Sub-Cont (2)	Labor (2)
1.- Process Equipment	100	25.00-26.00	3.75-4.75	44.16	69.24	4.99	37.8
2.- Site Preparation	2.50-3.00	0.01-0.01	0.50-1.00	1.19	0.02	0.78	0.97
3.- Site improvements	3.50-3.75	0.80-0.90	2.25-3.00	1.57	2.32	3.2	2.02
4.- Concrete	8.75-10.25	2.50-3.00	12.00-13.75	4.33	7.37	17.08	7.59
5.- Structural Steel	12.50-14.30	*	5.50-6.25	6.3	*	7.06	5.81
6.- Buildings	5.00-5.50	3.75-4.25	4.00-5.25	2.34	10.99	6.51	4.22
7.- Underground Pipes	4.75-5.50	0.01-0.01	3.00-3.25	2.18	0.02	4.05	2.38
8.- Above-ground Pipes	45.50-46.00	3.25-3.50	27.00-28.25	20.27	9.06	34.59	22.37
9.- Underground electricity	0.50-0.70	*	0.30-0.50	0.25	*	0.35	0.25
10.- Above-ground - Electricity	15.50-17.00	*	6.75-7.25	7.35	*	8.72	6.89
11.- Instrumentation	12.25-14.00	*	1.50-2.50	5.51	*	2.11	4.14
12.- Insulation	5.50-6.50	*	3.00-4.00	2.47	*	4.03	2.56
13.- Painting	2.00-2.75	*	1.75-2.25	0.91	*	2.46	1.17
14.- Paving	1.10-1.80	0.30-0.40	0.75-1.00	0.52	0.98	0.98	0.68
14.- Others	1.40-1.75	*	2.25-2.50	0.65	*	3.09	1.15
	220.8-232.8	36.12-38.07	74.30-85.50	100	100	100	100
* Not applicable or no significant trend data available.

FLUID/SOLID TYPE CHEMICAL PLANTS - Ratio Percentages - Direct Cost


FLUID/SOLID TYPE CHEMICAL PLANT - RATIO PERCENTAGES - DIRECT COST
Discipline	Percentage Range (%)			Average Percent of Total (%)
	Material	Sub-Cont (1)	Labor (1)	Total	Material (2)	Sub-Cont (2)	Labor (2)
1.- Process Equipment	100	25.00-26.50	4.00-6.00	42	70.31	4.93	36.52
2.- Site Preparation	2.25-3.00	0.01-0.01	0.60-1.25	1.08	0.02	0.74	0.9
3.- Site improvements	3.30-3.80	0.75-0.85	2.25-3.00	1.43	2.25	3.02	1.87
4.- Concrete	9.25-10.50	2.75-3.50	12.50-14.00	3.94	7.16	16.15	7.01
5.- Structural Steel	13.50-14.50	*	5.50-6.50	5.73	*	6.68	5.37
6.- Buildings	5.00-5.50	3.75-4.25	4.75-5.25	2.13	10.67	6.16	3.9
7.- Underground Pipes	4.50-5.25	0.01-0.01	3.00-3.50	1.94	0.01	3.75	2.15
8.- Above-ground Pipes	43.00-45.00	3.00-3.50	25.50-28.00	18.06	8.62	32.03	20.25
9.- Underground electricity	0.60-0.90	*	0.30-0.50	0.25	*	0.36	0.25
10.- Above-ground - Electricity	17.00-18.00	*	7.15-8.00	7.3	*	9	6.94
11.- Instrumentation	24.00-27.00	*	3.30-4.60	10.48	*	4.17	8
12.- Insulation	8.00-9.00	*	4.50-5.50	3.37	*	5.72	3.55
13.- Painting	3.00-3.50	*	2.80-3.10	2.14	*	3.49	1.62
14.- Paving	1.25-1.75	0.30-0.50	0.75-1.25	0.47	0.96	0.94	0.63
15.- Others	1.50-2.00	*	2.25-2.50	0.58	*	2.86	1.04
	237.2-249.7	35.57-39.12	79.15-92.95	100	100	100	100
* Not applicable or no significant trend data available.

PROCESS PLANT—FLUID HIGH PRESSURE TYPE - 4000 TO 5000 PSI - Ratio Percentages - Direct Cost


CHEMICAL PLANT—FLUID HIGH PRESSURE TYPE—4000 TO 5000 PSI - RATIO PERCENTAGES - DIRECT COST
Discipline	Percentage Range (%)			Average Percent of Total (%)
	Material	Sub-Cont (1)	Labor (1)	Total	Material (2)	Sub-Cont (2)	Labor (2)
1.- Process Equipment	100	25.00-26.00	3.75-5.00	43.16	74.86	5.34	38.1
2.- Site Preparation	1.70-2.25	0.01-0.01	0.25-0.50	0.75	0.01	0.54	0.63
3.- Site improvements	2.30-3.00	0.50-0.75	1.50-1.75	0.99	1.62	2.21	1.31
4.- Concrete	6.50-7.25	1.75-2.00	9.25-10.00	2.92	5.3	12.62	5.26
5.- Structural Steel	9.00-10.00	*	3.50-4.00	3.98	*	4.88	3.78
6.- Buildings	3.25-4.00	2.50-3.00	3.25-3.75	1.48	7.67	4.5	2.75
7.- Underground Pipes	4.75-5.25	0.01-0.01	3.00-3.25	2.12	0.02	4.3	2.38
8.- Above-ground Pipes	45.25-47.00	3.25-3.50	27.00-28.00	19.66	9.72	36.75	22.38
9.- Underground electricity	0.50-1.00	*	0.25-0.40	0.25	*	0.38	0.25
10.- Above-ground - Electricity	16.50-17.25	*	6.75-7.25	7.19	*	9.34	6.94
11.- Instrumentation	26.50-27.50	*	3.50-4.00	11.66	*	4.88	9.04
12.- Insulation	8.00-8.50	*	4.50-5.00	3.54	*	6.33	3.79
13.- Painting	2.75-3.25	*	2.75-3.00	1.3	*	3.86	1.73
14.- Paving	0.75-1.25	0.02-0.04	0.50-0.70	0.37	0.8	0.79	0.51
14.- Others	1.25-1.50	*	2.00-2.50	0.63	*	3.28	1.15
	229.0-239.0	33.04-35.31	71.75-79.10	100	100	100	100
* Not applicable or no significant trend data available.

PROCESS PLANT—FLUID HIGH ALLOY TYPE - Ratio Percentages - Direct Cost


CHEMICAL PLANT — FLUID HIGH PRESSURE TYPE — 4000 TO 5000 PSI - RATIO PERCENTAGES - DIRECT COST
Discipline	Percentage Range (%)			Average Percent of Total (%)
	Material	Sub-Cont (1)	Labor (1)	Total	Material (2)	Sub-Cont (2)	Labor (2)
1.- Process Equipment	100	25.00-25.50	3.75-4.25	45.58	75.07	5.74	40.18
2.- Site Preparation	1.50-2.00	0.01-0.01	0.25-0.50	0.81	0.01	0.59	0.68
3.- Site improvements	2.25-3.00	0.50-0.75	1.50-1.75	1.07	1.65	2.42	1.42
4.- Concrete	6.25-7.00	1.50-2.00	8.75-10.00	2.95	5.09	12.97	5.31
5.- Structural Steel	9.25-9.75	*	3.50-3.75	4.28	*	5.35	4.06
6.- Buildings	3.25-4.00	2.50-3.00	3.25-3.50	1.59	7.84	4.93	2.95
7.- Underground Pipes	4.50-5.00	0.01-0.01	3.00-3.50	2.18	0.02	4.51	2.45
8.- Above-ground Pipes	44.25-45.00	3.00-3.25	26.00-27.50	20.24	9.51	38.51	23.01
9.- Underground electricity	0.25-0.50	*	0.01-0.02	0.17	*	0.27	0.18
10.- Above-ground - Electricity	11.00-12.00	*	4.50-5.25	5.06	*	6.69	4.88
11.- Instrumentation	23.50-25.00	*	3.00-4.00	10.75	*	4.58	8.31
12.- Insulation	6.75-7.25	*	3.50-4.00	3.11	*	5.67	3.33
13.- Painting	2.50-3.00	*	2.25-2.50	1.14	*	3.46	1.52
14.- Paving	0.75-1.00	0.25-0.50	0.50-0.70	0.42	0.81	0.87	0.54
14.- Others	1.25-1.50	*	2.00-2.50	0.65	*•	3.44	1.18
	217.3-226.0	32.77-35.02	65.76-73.72	100	100	100	100
* Not applicable or no significant trend data available.

CONSTRUCTION EQUIPMENT - RATIO PERCENTAGES - AS A PERCENT OF DIRECT FIELD LABOR


CONSTRUCTION EQUIPMENT - RATIO PERCENTAGES - AS A PERCENT OF DIRECT FIELD LABOR
Description	Percent of
	Direct Field Labor
	Range	Average
16. Rental or Purchase	12.0-18.0	15
17. Service Labor	2.0-6.0	4
18. Fuel, Oil, Grease, Supplies	7.0-15.0	12
Total	21.0-39.0	31
Note: Fuel percentage based on diesel cost of $2.36 per gallon.

OVERHEAD AND INDIRECTS - RATIO PERCENTAGES - AS A PERCENT OF DIRECT FIELD LABOR


HOME OFFICE SERVICES - RATIO PERCENTAGES - AS A PERCENT OF DIRECT FIELD LABOR
Description	Percent of
	Direct Field Labor
	Range	Average
24. Engineering/Design Services	8.0-16.0	12
25. Construction Services	0.1-0.4	0.2
26. Project General Management	1.0-1.5	1.1
Total	9.1-17.9	13.3

HOME OFFICE SERVICES - RATIO PERCENTAGES - AS A PERCENT OF DIRECT FIELD LABOR


HOME OFFICE SERVICES - RATIO PERCENTAGES - AS A PERCENT OF DIRECT FIELD LABOR
Description	Percent of
	Direct Field Labor
	Range	Average
24. Engineering/Design Services	8.0-16.0	12
25. Construction Services	0.1-0.4	0.2
26. Project General Management	1.0-1.5	1.1
Total	9.1-17.9	13.3

PROCESS EQUIPMENT COST CORRELATIONS - CURVES - FOR CLASS IV - III ESTIMATIONS

COMPLETE PLANT COST ESTIMATING CHARTS - FOR CLASS V - IV ESTIMATIONS

PROJECTS COST BENCHMARKING