Getting Started The Basis for Design Note

The first step in the design procedure is to convert the proposed outcome into a specific goal statement. All of the supporting information required to complete the design work needs to be defined up front. The process design team needs to cover many areas: process design, equipment design, materials selection, instrument selection, utilities design (heating and cooling). Many people will work on the project, each with different backgrounds. Indeed, on large projects, many process and equipment designers will be involved. A firm process statement is required to ensure that everyone has all of the information (and that they have the same information). A Basis for Design note is a communication document; it ensures that all members of the design team have agreed and understood the fundamentals for the design, and that all are using the same base information for the design calculations.

Contents of Basis for Design Note

The format of the Basis for Design Note varies depending on the nature of the project, and the company that is doing the work. Regardless, the key information remains the same. The most important statement is the outcome for a chemical plant, this will be the product, its production rate and product quality. The operating system reflects the fact that some plants work 24 hours each day, and others work only 8; some plants operate 7 days each week, and others only 5. The operating system needs to be defined in terms of hours per day and days per week. This enables the conversion of an annual yield of a product to be converted to an instantaneous rate The stoichiometry of the process needs to be defined. For every reaction, the selectivity needs to be known. Also, the purity of the raw materials (and the nature of the impurities and their reactions) needs to be known. Special considerations for the reaction need to be identified, such as reaction rate laws, preferred feed ratios, temperatures and pressures. It is also important to define the process control (what variables are measured and how are they controlled to the desired values) and containment philosophies (how to keep spills on-site, and even more importantly, how to keep them from entering the environment anywhere). Basis for Design Note Define the product, and the product rate (te/a). Define the operating system (days/a and hrs/day) this gives the design rate (te/hr) Define the product and raw material purity Define stoichiometries, yield, excesses, rates of reaction Process control philosophy Containment philosophy

Design Constraints
There are many factors that influence the final design, and these are referred to as design constraints. These factors constrain (or limit) the options available to the designer. The simplest constraint is physical location on a plant site. A plant in Canada must be designed for snow in winter and cold temperatures but not a plant in Brazil. It may be desired to install equipment within an existing plant. The arrangement of buildings, pipe supports and roads will limit where the new equipment can be placed. The new equipment likely will not be installed in the same location that would have been chosen if the plant were being initially constructed. Another set of common constraints are the utility constraints. These include limitations on raw water usage (recycle water may need to be used), the temperature of the cooling water will constrain the size of the coolers, limitations on available steam flowrate and pressure (hence, temperature) will constrain the size of heaters and evaporators. Environmental regulations pose a different set of constraints. The concentration of chemicals permitted in plant emissions (either solid, liquid or gaseous) is defined by regulations. The simple act of pumping a liquid into a storage tank leads to the displacement of the vapour above the liquid. This vapour is an emission that may need to be contained, or prevented. It is important to be aware of the constraints before beginning the design work. Also, once the initial design concept has been developed, it should be checked to confirm that it still remains within the set of design constraints, and that other design constraints have not appeared. Design Constraints Define all utility constraints (water flowrates, temperature, steam pressure) Identify environmental regulations (solid, liquid, gas emission) Identify other regulatory issues (visual, noise) Plant siting constraints (existing equipment, pipelines, rail lines, roads)

Example: Objective:

Chlorine Distillation

It is desired to install a process for the purification of liquid chlorine to give a purified liquid chlorine product for a specific customer. Product Rate: 150 ton/d of liquid chlorine with less than 10 ppm dissolved CO2. The product is to be sent to a segregated product tank, and then loaded into tank cars. The system can operate independent of the main processes, but no independent of the emergency vacuum gas scrubber. Feed Quality: Liquid chlorine at 10C and 80 psig, containing 2000 ppm CO2 Medium pressure steam is available on site; low pressure steam is to be used for the reboiler to minimize corrosion. Cooling/refrigeration is not required heat removal is achieved through boiling liquid chlorine. The preferred location for the flashed chlorine is the HCl burner. Failing this, the gas is returned to the chlorine system for compression and liquefaction. In the last case, it is sent directly to the hypo scrubbers. CO2 is condensed with liquid chlorine; returning the gas to the chlorine plant will introduce a CO2 recycle, thereby boosting inlet CO2 levels.

How do You Get This Information

Many engineers spend their careers working in the manufacture of a single chemical. They become experts in those chemical processes, and they are able to generate the information required for a Basis for Design from memory. The most difficult design is one for which you have no experience, and no little to no background knowledge of the chemicals. Dont worry the systems used to assist with obtaining sufficient information to begin to generate a Basis for Design note is quite simple. You are not the first person who has had to investigate the manufacture of a new chemical. Now, one can do an Internet search, and you may obtain all of the information that you need. However, it is more likely that, at the beginning, you will need far more background information. The place to start is with the general chemical references. There are three sets of encyclopaedia (all available in the Engineering Reference Library and 2 of them on-line resources) that should be consulted. These encyclopaedias are updated every 15 years, and have been written by experts in the field of the various chemicals. Each set has roughly 30 volumes you can imagine that there is much more information in those texts than normally available in the Internet. The Encyclopaedia names are: Kirk-Othmer Encyclopaedia of Chemical Technology MeKetta Encyclopaedia of Chemical Technology Ullmans Encyclopaedia of Industrial Chemistry Chemical Stoichiometries The chemical stoichiometry is the place to start. It provides the set of equations for converting the raw materials to a set of products and byproducts. This information is always written as a set of chemical equations (and, by definition, an equation is balanced). Write down the set of equations. If there are parallel reactions, then write down the relative yields of the various reactions. This will to the process selectivity. Next, list all of the chemicals involved in the process. Also, list their molecular weights. Next, take the desired production rate, and calculate the raw material consumption rates and the product/byproduct production rates for all species. Report these in various unit sets. You may wish to have tonne/a for the economic analysis, tonne/d to determine what type of transportation system you will use, and tonne/hr and kg/min for use in determining pipe sizing. Once you have found the general stoichiometric information on the product, we need to start down the road of developing a process for its manufacture. The key information that you need here is physical property data are you dealing with solids, liquids or gases? Do you expect any phase changes during the processes? Also, are there any conditions under which a phase change will occur how much hotter does the solution need to be before it boils, or how much cooler before it freezes?

Develop Block Diagram

A block diagram develops the initial process flow concept. The process is broken into discreet process stages or blocks. The inputs and outputs for the blocks are identified. The purpose of the each discreet process stage is identified. Identify the key temperatures, pressures and composition required for all stage outputs. Then, calculate the mass balance for each block, along with the energy balance. The block diagram becomes the basis for the Process Flowsheet. The goal of the Block Diagram is to provide a feel for the process, without providing too much detail. At early stages of design, it is most important to develop a feeling for the process, and to consider alternatives to the design without being encumbered by too much detail. At the block diagram stage you havent decided on the type of equipment to be used just what needs to be done. There are few rules for drawing a Block Diagram as projects can be large or small; smaller projects can show more detail without becoming overly complicated. The general conventions for Block Diagram are: 1) Operations are shown as Blocks 2) Major flow lines are shown, with arrows giving direction 3) Flow goes from left to right (as much as possible) 4) Light streams go up (gases), and liquids and solids go down 5) Critical information unique to the process is shown 6) If lines cross, horizontal lines are continuous 7) Simplified mass balances are shown

Creation of Overall Mass and Energy Balance

The overall plant mass balance is calculated from the block diagram, and the reaction stoichiometries. The following steps should be followed. 1) Identify all chemical species involved in the reactions, and obtain molecular weights. 2) Start with the stream defined by the basis for design statement convert to a mole basis 3) Solve the mass balance for each input and output streams for each block use a mole and mass basis. 4) Next solve for the enthalpy balance for each block identify major heating and cooling loads. It follows that the entire design team needs to use the same set of species, reactions, selectivities, molecular weights, heat capacities, latent heats, and block to block set points (T, P and composition). This information should be supplied with the basis for design note. The overall block diagram calculations are included as part of the design manual.

Design Options
At this stage, design choices begin to be identified. The first design choice is whether the process is to be batch or continuous. Remember that continuous processes can have batch steps, and batch processes can have continuous steps. There are very few chemical processes that are completely continuous. For example, most raw materials and products enter (and exit) plants by truck, rail car and barge. The materials loading/unloading steps are inherently batch. A batch process can be defined as one in which a finite quantity of product is made in a specified period of time (hours, days). The batch process typically has stages of metering feed into a vessel, heating, reacting, purification, which occur for a finite amount of time. The final step is removal of the batch from the vessel, cleaning and starting again. It is not unusual for the same piece of batch equipment to be used to manufacture a variety of products; each of these products has a different set of Operating Procedures (or recipes). In a continuous process, the feed is sent to a series of equipment, with each piece doing one single task. As a general rule, continuous processes are used for large-scale chemical plants, and batch processes are used for small-scale chemical plants. The products of a batch process often are small volume, but high value and/or high purity products. The process chemistry leads to design options. It is well known that reaction rates are faster at higher temperatures, and faster reactions lead to smaller reactors. However, for many processes, byproduct yield also is a function of temperature, often with unwanted side reactions occurring at greater rates as the temperature increases. This can lead to various temperature options, which in turn force decisions to be made regarding product purification. Another area of process options is generated by SHE (Safety, Health and Environment) issues. Product purity requirements lead to the need to remove unwanted byproducts from the process. These byproducts can either be sold, or they need to be sent for waste disposal. Waste disposal has costs; hence an economic analysis becomes part of the initial study of design options. A key safety factor is the unsteady operation of the chemical process. How will the process get started, how will it be shutdown, and what will happen during a process upset? It is important to begin thinking about these issues at the early stages of the design. If there are chemical conditions that are unsafe, then the process needs to be designed in such a way that these conditions are prevented from occurring; if the hazardous event can not be eliminated, then systems need to be included in the design to reduce the impact of the occurrence. In addition, process measurement and control systems need to be included in the design to minimize the impact of these adverse events. In March 2005, the water supply in Stratford, Ontario was contaminated with detergents and waxes from a car wash. The car wash drains were becoming plugged, and the operators boosted water pressure in an attempt to dislodge the plug. They boosted the water pressure to a pressure above that of the municipal water supply, and high pressure water flowed backwards into the municipal system. This could have been avoided if the pressure washer could not generate a discharge pressure greater than the municipal supply pressure, or by completing segregating the effluent and raw water systems.

ENGINEERING ECONOMIC ANALYSIS

The basis for the free-enterprise economic system is that shareholders can pool capital dollars together, and create a corporation. The corporation spends the capital dollars to build a manufacturing facility. The manufacturing facility needs to produce and sell products in order to generate a profit, and the profit needs to be such that the shareholders obtain the optimum return on their capital. The term here is optimum return, which is not necessarily the maximum return. The shareholders hire the management team which has the obligation to operate the manufacturing facility in accordance with the shareholders instructions. The first instruction is that the facility be operating in accordance with all applicable regulations. From a design perspective, this primarily refers to all Safety, Health and Environment regulations. SHE regulations have 2 facets the first is requirement to report, and the second provides for fines (and other economic sanctions) against companies that violate regulations. The costs for ignoring SHE regulations begins with management time being taken away form productive work and end with closure of a facility. There should be no doubt that proper design must include SHE considerations at the beginning. Despite this, the design process will always generate process options. Each options has a different capital cost, operating cost and introduces different process risks. Engineering Economic Analysis provides a framework for evaluating competing options. Simply put, the various options are compared on the basis for capital cost and operating cost. An increase in capital cost needs to be justified by a decrease in operating costs or a reduction in risk. This is where the process choice comes into play. One process option may be less costly, but carry a larger risk. There is an annual cost to the risk, which is the probability of the untoward event multiplied by the cost of the event. All of these topics were covered in your Economic Analysis course we will visit them again. The key issue is to start with the framework for the economic analysis at the beginning of the project, and to establish the calculations early. This will help eliminate poor process options early, and enable the design work to focus on the optimum process from the beginning. There is an old saying that goes You will do the job right the last time, so you may as well do it right the first time.

Initial Operating Margin Estimate The economic analysis begins with the calculation of the operating costs, and the operating margins. Generally speaking, Margin is used for projects where a chemical product will be sold, and profit will be generated. The difference between sales revenue and costs is the Margin. The issue of Operating Cost analysis is used when it is difficult to assign a particular sales value to the project, and margin is not an appropriate term. For all projects, it is important to define a base case. This base case could be a do nothing alternative, or it could be one of the process options. It doesn't matter which process option is used as the base case, because the other projects will have greater or lesser capital and operating costs. The key issue is the greater capital cost justified by an improvement in operating costs. The economic analysis is always calculated in the following fashion: 1) List all products (te/a) and their selling price to identify gross revenues. 2) List all raw materials (te/a) and purchase price; subtract from gross revenues 3) List all wastes (te/a) and disposal costs, subtract from gross revenues 4) Summarize gross heat requirements, cost and subtract from gross revenues. This gives an initial estimate of gross profit for each of the various options. At this stage, the first question is not which of the options is the best, but whether any of the options are suitable. Imagine the case of a new chemical plant if the project does not show a profit, it is difficult to imagine that anyone would spend capital dollars to design, build and operate such a plant. The implication is that either the project is impractical or there is an error in the calculations. Check the mass and energy balances, and check the prices used. If the new plant still shows no profit, then look at the major cost factors, and try to find ways to reduce these costs. For example, if steam is a major cost, then we need to focus on energy recovery during the process development stage. If waste disposal is significant, do we need better raw materials, or better raw material preparation. These considerations need to be identified early, as they influence the design throughout. In the case of several design options, the issue becomes which has the lowest operating costs and why. Next, reflect on the likelihood of the stability of these costs do any of the raw material prices vary significantly. If so, then determine how sensitive the profitability is to the fluctuations in prices. If your data is correct and you cant make a profit, but someone else is spend some time to understand why. Currently, North America imports products from South East Asia at cheaper prices than for local manufacture. One of the major cost savings is the lower level of environmental standards in developing countries things are cheaper because there is less environmental cleanup. The difference in labour costs is small for chemicals because there is little labour involved in their manufacture!

Example:

Chlor-Alkali Economics

2 NaCl + H2O => 2 NaOH + Cl2 + H2 3% of current consumed as 2 H2O => O2 + 2 H2 Basis: 500 ton/d Cl2 in a 350 d/a 175,000 ton/a Cl2 @ $150/ton 197,400 ton/a NaOH (100%) @ $300/ton Gross Revenues Less Electricity: 2700 kWhr/ton Cl2 @ 0.04 per Salt: 297,500 ton/a @ $30/ton delivered Natural Gas: Waste Disposal: 10,000 ton/a @ $500 per Gross Margin Labour: 80 at $75,000 per Parts/Equipment/Supplies Net Margin $26,250,000 $59,220,000 $85,470,000 $18,900,000 $8,925,000 $2,625,000 $5,000,000 $50,020,000 $6,000,000 $5,000,000 $39,020,000

The good news is that this project shows a positive return. It is clearly a possible project. The next question is whether the project delivers sufficient return on investment to make it attractive to the investors. In order to determine this, we need to estimate the capital cost of the project. The actual capital cost for the project will never be known until after the project has been completed, and all of the costs collected together. As such, all work with capital costs involves estimates. The goal of the first estimate is to estimate the capital cost 50%; obviously, more accurate estimates are better, but they likely are not possible at this stage. The capital cost estimate target is 25% at the end of the process design study at which point the decisions regarding the process options is taken. The chosen process is taken to a more detailed level of design, and a final capital cost estimate of 10% is obtained, and this estimate is used to justify the capital expense; it is referred to a Sanction.

CAPITAL COST ESTIMATES

There are 5 levels of capital cost estimate. The table low defines the levels, and provides s description of the effort required to obtain the estimate. Estimate Feasibility Description Diagrams Accuracy 50%

Uses cost information Block Diagram obtained from similar plants; that is scaled for capacity, inflation and currency The major equipment items are listed, and approximate sizings are known; approximate costs are obtained, and a factor method is used to estimate the final capital cost The equipment list and sizing have been finalized, and the purchase cost plus installation costs are estimated, along with estimates of piping, control and utility costs PFD

Study

Scope

PFD, major equipment drawings, plot plan

20%

Definitive

Preliminary specifications Final PFD, vessel drawings, 10% for all equipment have been plot plan, utility balances, completed, and costs have P&ID been estimated by suppliers. This relies on detailed vendor quotations from detailed engineering drawings Final PFD, P&ID, vessel 5% drawings, piping isometrics

Detailed

Engineering companies retain a staff of project estimators whose sole job is to provide the best possible estimates for project costs, based on their experience on previous projects. An error by an estimator can prevent a company from getting a contract (if the cost estimate is high), or it can cause the company to underbid and lose money on the project. Student estimates are limited to Study and Scope estimates only.

Factor Grade Estimates The basis for all capital cost estimates is the equipment list. You can imagine a spreadsheet that lists all of the equipment items. The columns to the right provide information on capacity (or size), material of construction, and finally cost. The two text books suggested for this course provide various data for estimating the capital cost. The actual equations differ, but the fundamentals are the same. The base equation is always if the type
Size 2 n Cost ( Size 2) = Cost ( Size 1) * Size 1

which means that the cost of the equipment varies with its size to an exponent. The typical exponent is roughly 0.7, and they vary between 0.5 and 0.9, depending on the type of equipment. This means that equipment that is twice as large costs 1.4 times as much (20.7 = 1.4). The actual constants in the equations are tabulated in the appendices of both texts. The base material of construction is usually carbon steel. A premium is charged for purchase of stainless steel, and larger premiums are charged for nickel or other higher alloy products. Take the cost estimated above, and multiply it by a material of construction cost factor. Finally, you need to adjust the costs for inflation (or the time between today and when the original price was obtained). The cost data was obtained in 1997. Inflation has occurred, and the costs have increased. Normally, the CEPCI (Chemical Engineering Plant Cost Index) is used. The value in 1997 is provided, and by taking today's value of the CEPCI, and third cost factor is obtained. Through listing all of the equipment items, and obtaining costs estimates, the capital cost of the equipment items is readily obtained. In addition to these equipment costs are the costs of piping, pipe installation, foundations, etc. A factor approach is often used to escalate these costs to provide an estimate of the final capital cost. The first rule of thumb is that the final project cost will be roughly 5 times the cost of the equipment items. This gives an initial Capital Cost Estimate that is accurate to within about 30%. The next step is to identify the various component costs of the plant, and to assign a cost factor to them. The list of cost factors is adjusted for the project, and an improved cost estimate is obtained. As the project progresses, true costs replace the estimated costs, and the accuracy of the estimate improves. By establishing the economic framework at the beginning of the project, saves time later in the project.

Component Purchased Equipment Installation of equipment Instrumentation Piping Electrical Buildings Land Service Facilities Engineering and Supervision Construction Legal Costs Contractors Fees Contingency

Range 15 40 6 14 2 12 4 17 2 10 2 18 37 8 30 4 20 4 17 13 26 5 15

Typical 23 8.3 9.2 7.3 4.6 4.6 1.8 13.8 7.3 9.2 1.8 1.8 7.4

PROJECT PAYBACK
There are 2 key standards used to refer to project economics. One is ROI (Return on Investment), and the other is Payback Period. Payback period is the length of time required for the project benefits to pay for the cost of the capital. ROI is the fraction of the capital spent that is returned each year by the project. These two parameters are inversely related. A project that takes 4 years to payback has a nominal return on capital of 25%. Returning to the Chlor-alkali example shown above, for a 5-year payback on the project, the total project must be built for less than $200 million. As a general rule, new plants are designed to be paid off within 5 years. Process expansions and energy efficiency projects tend to have paybacks of 2 years or less. There are many technically feasible projects that do not provide the necessary return to be justified. Maintenance, safety and environmental projects show no economic benefit (there is no additional production or cost savings). Projects of this nature are Permit to Operate projects the cost of not doing the project is that the plant is not allowed to operate. Capital is spent on these projects before it is spent on other projects. The best projects are those that resolve a Permit to Operate issue and provide an economic justification, or projects that remove a process limitation. These projects require ingenuity to identify and pursue, and provide the company with high returns on the capital spent. It is important to note that many economically attractive projects do not get funded. Companies have a specific capital budget each year. The first projects funded are maintenance projects piping and equipment wear out, and need to be replaced. These are funded first because failure to do so leads to lost production, and possible SHE consequences. The next set of projects funded are Permit to Operate projects these projects are required to demonstrate that the plant conforms to all regulations. If there is any capital remaining, then it can be spent on process improvement projects. It is key to understand that good engineering projects often are left on the shelf because the company has insufficient capital to afford them. In addition, projects get shelved when there is insufficient manpower to execute the project.

Summary
It is possible to get a good approximation of the capital and operating cost of a chemical plant, with very little work. With a day or two of effort a estimate at the 25% level can be obtained. Make the appropriate decision and move to the real work of engineering.