Projec t E n g in e er i n g a n d

Econo m ic s f or C h e m ic a l
Engineers

Developed by Dr. Aniruddha Deb

Assistant Professor
Chemical Engineering, BIT Mesra
 Plant design steps
1. The need. That comes out from a customer or from the sales department.
This stage requires inception of the basic idea whether the product will
result.
2. If need is satisfactory, a preliminary research and investigation will be
initiated. This stage involves the selection of possible process to satisfy
the need. This requires thorough literature review. The preliminary data
required for the process is collected.
3. After process selection is made, start process research phase. That
involves preliminary market survey, laboratory scale experiments (R &
D), production of sample. Here we asses the profitability of preliminary
process, through market survey and estimation of probable cost. If the
profitability is negative reject the process and try another process as in
step 2.
4. When the potentialities of the process satisfy the economic goal, we
proceed for development phase of project. A small pilot plant is
constructed. Data generated.
5. Data obtained from development phase are used to do
complete market survey. The samples obtained from the
pilot plant are sent to customer for confirming product
satisfactory. Capital cost estimation for the full scale
plant is determined. Return on investment and a
complete cost-and-profit analysis is done. All the stages
involved (1-5) are called expensed engineering.
6. The management of the company will now consider the
further investment of capital cost to the final plant setup.
The later steps are called capitalized engineering.
7. Final process design phase-design details including
layouts, controls, services, price quotations, design
of each piece of equipment. Actual construction of
plant starts.
8. Procurement of the equipments, construction of plant
and start up the production.
Design procedure
• The Design Objective (The Need)
• Before starting work, the designer should obtain as complete, and as
unambiguous, a statement of the requirements as possible. If the requirement
(need) arises from outside the design group, from a customer or from another
department, then the designer will have to elucidate the real requirements
through discussion
• Setting the Design Basis
It includes the production rate and purity specifications of the
main product, together with information on constraints that will
influence the design such as
1. The system of units to be used.
2. The national, local, or company design codes that must be followed.
3. Details of raw materials that are available.
4. Information on potential sites where the plant might be located, including
climate data, seismic conditions, and infrastructure availability.
5. Information on the conditions, availability, and price of utility services such
as fuel gas, steam, cooling water, process air, process water, and electricity that
will be needed to run the process.
• The design basis must be clearly defined before design can
begin. If the design is carried out for a client, then the
design basis should be reviewed with the client at the start
of the project.
• Generation of Possible Design
Concepts
• The creative part of the design process is the generation of
possible solutions to the problem for analysis, evaluation, and
selection.
• In this activity most designers largely rely on previous experience,
their own and that of others
• Experienced engineers usually prefer the tried and tested methods,
rather than possibly more exciting but untried novel designs.
• Development of new processes inevitably requires much more
interaction with researchersnand collecti on of data from labor
atories and pilo t plants.
• Chemical engineering projects can be divided into three
types, depending on the novelty involved
• Modifications, and additions, to existing plant; usually carried out by the plant
design group.
Projects of this type represent about half of all the design activity in industry
• New production capacity to meet growing sales demand, and the sale of
established processes by contractors. Repetition of existing designs, with only
minor design changes, including
designs of vendor’ s or competitor’ s processes carried out to understand whether
they have a compellingly better cost of production. Projects of this type account for
about 45% of industrial design activity.
• New processes, developed from laboratory research, through pilot plant, to a
commercial
process. Even here, most of the unit operations and process equipment will use
established
designs. This type of project accounts for less than 5% of design activity in industry.
• The first step in devising a new process design will be to sketch out a
rough block diagram
showing the main stages in the process and to list the primary function
(objective) and the major
constraints for each stage.
• Experience should then indicate what types of unit operations and
equipment should be considered.
• The steps involved in determining the sequence of unit operations that
constitutes a process flowsheet
Sources of data required for
solution to design problem
Latest data, flow sheet, equipment, simulation model
• Patent search
• Literature survey
• Chemical abstract
• The engineering index
• The applied science and technology index
• The science citation index
• Primary sources for chemical engineer
• Perry’ handbook
• Handbook of chemistry and physics (CRC press)
• Chemical processing handbook
• JANAF thermochemical tables
• Standard handbook of hazardous waste treatment and disposal
• Data for process design and engineering practice
Resources for design
• Stanford research institute design reports
• Kirk-Othmer encyclopedia of chemical technology
• Ullman’s encyclopedia of industrial chemistry
• McGraw-Hill encyclopedia of science and technology
• Encyclopedia of material science and engineering
• Van Nostrand’s scientific encyclopedia
Extensive databases are provided
by
• ASPEN PLUS,
• HYSYS
• CHEM CAD
• PRO II
• DECHEMA
Process creation
• After surveying the literature the design engineering has to select b/w
New and improve the existing process.
• Objective of this is to produce a product in a reliable, safe, and
economical manner with a high yield and minimum by-product and
waste.
• (in past years) Heuristic rule of thumb
• Mathematical modeling
• Decision-tree analysis
Mode of operation
Before synthesizing a flow sheet, design engineer must choose the
operation mode
• Continuous (commodity chemicals, large scale products, diminish man
power and time), e.g., sulfuric acid plant, petroleum products and
petrochemicals, plastics, paper, solvents.
• Batch or semi continuous (specialty chemicals, small scale hazardous
products), e.g., pharmaceutical products, fragrance
 Specification of Raw materials
and Product
Engineer must State condition raw materials and products
• Flow rates
• Temperature
• Pressure
• Composition
• Phase (physical state)
• Form (particle size and its distribution)
Process synthesis steps
Select processing operation
(more than single step)

inlet Process outlet

Synthesis steps Basic processing equipments

operation
Molecular change Chemical reaction reactor
Composition change Separation of mixture Distillation column,
extractor, scrubber
Phase elimination Phase separation Decanter
Temperature difference Change in temperature Heat exchanger,
heater
Pressure difference Change in pressure Flow meter,
compressor
Phase difference Change in phase
Distribution change Mixing of streams
• Two important consideration here
1. Alternatives involved in each step
2. Quick economic analysis of synthesis step with aid of simulator
Process Design

• Several different manufacturing methods may be available for making

the same material
• various processes must be compared in order to select the one best
suited to the existing conditions.
• The comparison can be accomplished through the development of
complete designs.
• all but one or two of the possible processes can be eliminated by a
weighted comparison of the essential variable items, and detailed
design calculations for each process may not be required.
Items to be considered in a comparison while
designing a process diagram for plant layout
Items to be considered in a comparison
• Preliminary or quick-estimate designs-based on approximate process methods, and
rough cost estimates.
• Few details are included, and the time spent on calculations is kept at a minimum.

Detailed-estimate design-cost and-profit potential of an established process is

determined by detailed analyses and calculations.
exact specifications are not given for the equipment,
and drafting-room work is minimized

• Process design-When the detailed-estimate design indicates that the proposed

project should be a commercial success, the final step before developing
construction plans for the plant is called final process design.
• Complete specifications are presented for all components of the plant, and accurate
costs based on quoted prices are obtained.
• The firm process design includes blueprints and sufficient information to permit
immediate development of the final plans for constructing the plant.
 t i m a ti o n
Cost es
• Most chemical engineering design projects are carried out to provide information
from which estimates of capital and operating costs can be made.
• Chemical plants are built to make a profit, and an estimate of the investment
required is needed before the profitability of a project can be asses sed.
• Cost estimation is a specialized subject and a profession in its own right, but the
design engineer must be able to make rough cost estimates to decide between
project alternatives and optimize the design.
Fixed Capital Investment
The fixed capital investment is the total cost of designing, constructing,
and installing a plant and the associated modifications needed to
prepare the plant site. The fixed capital investment is made up of:
1. The inside battery limits (ISBL ) investment —the cost of the plant
itself
2. The modifications and improvements that must be made to the site
infrastructure, known as offsite or OSBL investment
3. Engineering and construction costs
4. Contingency charges
ISBL ( Inside Battery Limits) Plant
Costs
The ISBL plant cost includes the cost of procuring and installing all the process equipment that
makes up the new plant.
• The direct field costs include:
1. All the major process equipment, such as vessels, reactors, columns, furnaces, heat exchangers,
coolers, pumps, compressors, motors, fans, turbines, filters, centrifuges, driers, etc., including field
fabrication and testing if necessary
2. Bulk items, such as piping, valves, wiring, instruments, structures , insulation, paint, lube oils,
solvents, catalysts, etc.
3. Civil works such as roads, foundations , piling, buildings, sewers, ditches, bunds, etc.
4. Installation labor and supervision
• In addition to the direct field costs there will be indirect field costs including
:
1. Construction costs such as construction equipment rental, temporary
construction ( rigging, trailers, etc.), temporary water and power, construction
workshops , etc.
2. Field expenses and services such as field canteens, specialists’ costs,
overtime pay, and adverse weather costs
3. Construction insurance
4. Lab or benefits and burdens (social security, workers compensation, etc.)
5. Miscellaneous overhead items such as agent’s fee s, legal costs, import
duties, special f eight
costs , local taxes , patent fees or royalties, corporate overheads, etc.
Offsite Costs
• Electric main substations, trans formers, switch gear, power line s
• Power generation plants, turbine engines, stand by generators
• Boilers, steam main s, condensate line s, boiler feed water treatment plant, supply
pumps
• Cooling towers, circulation pumps, cooling water mains, cooling water treatment
• Water pipes , water demineralization, waste water treatment plant, site drainage and
sewers
• Air separation plants to provide site nitrogen for inert gas, nitrogen line s
• Dryers and blowers for instrument air, instrument air lines
• Pipe bridges, feed and product pipelines
• Tanker farms, loading facilities, conveyors, docks, warehouses , railroads , lift trucks
• Laboratories , analytical equipment
• Offices , canteens, changing rooms, central control room s
• Works hops and maintenance facilities
• Emergency services, firefighting equipment , fire hydrants, medical facilities, etc.
• Site security, fencing, gatehouses, landscaping
Engineering Costs
The engineering costs , some times referred to as home office costs or contractor charges, include the costs of
detailed design and other engineering services required to carry out the project:
1. Detailed design engineering of process equipment, piping systems , control systems and offsites, plant layout
, drafting, cost engineering , scale model s, and civil engineering
2. Procurement of main plant items and bulks
3. Construction supervision and services
4. Administrative charges, including engineering supervision, project management, expediting, inspection,
travel and living expenses, and home office overheads
5. Contractor’s profit
Contingency Charges
• Minor changes in project scope
• Changes in prices (e.g., price s of steel, copper, catalyst, etc.)
• Currency fluctuations
• Labor disputes
• Subcontractor problems
• Other unexpected problems
Working Capital
In addition to the fixed capital investment that was used to de sign
and construct the plant, the owner needs to invest some capital in
maintaining plant operations. The capital that is tied up in
maintaining inventories of feeds, products, and spare parts, together
with cash on hand and the difference between money owed by
costumers (accounts receivable) and money owed to
suppliers(accounts payable), is termed the working capital of the
plant.
We have considered the estimation of the capital investment required for a new project. The major part of the
capital is invested at the start of the project. The other major component in engineering cost estimation is the
(annual, daily or unit of product basis) total product cost. The branched of engineering cost estimation can be
shown as
COST INDEXES
If the cost at some time in the past is known, the equivalent cost at
the present time can be determined by multiplying the original
cost by the ratio of the present index value to the index value
applicable when the original cost was obtained

Ref: textbook
 Cost Curve Methods

n= 0.8 – 0.9 for processes involve heavy mechanical work and gas compression e.g. methanol,
paper pulping
n= 0.7 for typical petrochemical plant
n=0.4 – 0.5 for small-scale, highly-instrumented processes, such as specialty chemical or pharma-
ceuticals manufacture
n= 0.6 for chemical industries, the six tenth rule is followed
• Garrett (1989) has published capital cost-
plant capacity curves for over 250
processes
• The journal Hydrocarbon Processing publishes
supplements on refining, petrochemical, and gas
processing processes every other year
Generally, the 0.6 factor should only be used in
the absence of other information
Step Count Method
• Experienced design engineers can often figure out costs of
plant sections from historic total plant costs.
• For example, in many petrochemical processes roughly
20% of ISBL capital cost is in the reactor section and 80% is
in the distillation and product purification sections. If the
separation and recovery system has a similar size and
complexity to that of a known process, then the capital
cost can be estimated based on the cost of the known
process and the reactor section cost taken as one
quarter of the separation section cost.
• An alternative approach is Bridgewater’s method, which correlates plant
cost against number of processing steps

A functional unit includes all the equipment and ancillaries needed for a
significant process step or function, such as a reaction, separation, or other
major unit operation. Pumping and heat exchange are not normally
considered as functional units unless they have substantial cost, for example,
compressors, refrigeration systems, or process furnaces.
Reverse Engineering Methods
• Pay-back Method
• Turnover Ratio Method
turn over ratio= gross annual sales/ capital cost
TCOP Method
For large-scale production of formed or assembled
components (>500,000 pieces per year) a rule of thumb
is

The total cost of production is typically one third to one fifth of the
capital cost
Problem
The process for making cyclohexane by saturation of benzene consists of a feed-effluent
heat exchanger, a saturation reactor, and a product stabilizer column. Estimate the cost
of a plant that produces 200,000 metric tons per year (200 kMTA) of cyclohexane using
the correlation in Table 7.1 and Bridgewater’s method.
 Please practice all the solved
examples (1-7) of Chapter 6
( Cost estimation )of Peter and
Timmerhaus
An estimate of the capital investment for a process may vary from a
predesign estimate based on little information except the size of the
proposed project to a detailed estimate prepared from complete
drawings and specifications. Between these two extremes of capital-
investment estimates, there can be numerous other estimates which
vary in accuracy depending upon the stage of development of the
project.