1

Section 27
FACT Method of Cost Estimation

INTRODUCTION
Whenever you start to look at a new design or modifying an old
design, one of the first questions that is likely to be asked is
What will it cost. This presents a dilemma because the ques-
tion is always asked when very little, if any, design work has
been completed. Since cost estimates are almost always based
on factoring the cost of major equipment items in the design,
some method is required to approximate the size and cost of
these major equipment items very early in the design phase. By
way of definition, major materials means any uniquely identifi-
able item of equipment such as distillation columns, pressure
vessels, reactors, heat exchangers, pumps, compressors, fired
heaters and the like.

To resolve this dilemma Olin Engineering has developed the
Iirst Approximation Costing 1echnique or FACT method for
developing order of magnitude sizing and costs for major items
of capital equipment.

The costs derived by the FACT method are based on the
equipment at the vendors works. To arrive at a total installed
cost estimate of the process facilities we add the following Fac-
tors to the sum of the cost of all of the major equipment
items.

IIG. 27- J
Installed Cost Iactors for Purchased Lquipment

Factor Item Subtotals
A. Major Equipment Costs 100
B. Instrumentation and Control Systems 15% of A 15
C. Major Equipment including I&C 115
D. Minor Material (piping, electrical , etc) 60% of C 69
E. Total Equipment Cost 184
F. Freight Insurance and Handling 15% of E 28
G. Engineering 20% of E 37
H. Construction Labor 60% of E 110
I. Construction Equipment 10% of E 18
J. Construction Supervision 10% of E 18
K. Total Installation Costs 211
L. Total Capital Cost E + K 395
M. Owners Costs 8% of L 32
N. Total Installed Cost of ISBL L + M 427

1his is the cost of the process facilities, also known as Inside Battery Limits (ISBL) facilities.

These facilities cannot exist in isolation. They will need to be
supported by Outside Battery Limit (OSBL) facilities such as
storage tanks, feedstock receiving and product shipping, cool-
ing water, steam, fire water, instrument air, flare stack, envi-
ronmental treating and other facilities. Since it is only possible
to estimate the amount of tankage at this point in time, Olin
Engineering uses a factor of 30% of the ISBL cost to account
for the OSBL facilities other than storage tanks
.
IIG. 27-2
Nomenclature

A = Area (square feet)
ACFS = Actual Cubic Feet per Second (Ft
3
/sec)
c.a. = Corrosion allowance (inches)
ISBL = Inside Battery Limits. Equipment directly used in the
manufacturing process.
GPM = Gallons per Minute.
HP = Horsepower = 550 ft.-lbs./sec.
L = Liquid flow rate in a tower. (Lb. moles/hour)
L/D = Length ? Diameter of a tank.
OSBL = Outside Battery Limits. Storage tanks, all buildings
and equipment not directly involved in manufacturing.
P = Pressure (PSI) (Either Absolute or Gauge)
R/D = Reflux Ratio. Reflux/Distillate (Overhead Product).
t = Thickness of a pressure vessel wall (inches)
T = Temperature (
o
R)
V = Vapor flow rate in a tower. (Lb. moles/hour)
W = Weight (pounds)
Z = Compressibility (Videal ? Vactual @ inlet conditions)
? = Relative Volatility. Ratio of vapor pressures of light key to
heavy key at operating temperatures.
? = Density (Lbs./cubic foot)
? = Cp/Cv

2


The cost of storage tanks is included at $0.50/US gallon.

Olin Engineering also adds a contingency factor that should
be applied at this point to account for items not included and
for the inevitable cost growth that accompanies the identifi-
cation of additional equipment and facilities as the design
process progresses.

Thus, the Total Installed Cost of the entire facility is made
up as follows based on the ISBL Cost = 100:

ISBL 100
Storage Tanks* 15
OSBL 35
Contingency Allowance at
40%Of ISBL + OSBL 60
Total Project Cost 210

*This number is used as an example. For an actual estimate,
the storage tank cost would be estimated by multiplying the
total storage tank volume in gallons by $0.50/gallon.
On the following pages, we show Olin Engineerings FACT
method for estimating the cost of individual equipment
items.

PRESSURE VESSELS

The cost of a carbon steel pressure vessel is the sum of the
metal cost (55%) and the fabrication cost (45%).

For vessels where the shell thickness is less than 1.25 inches,
the cost is related to vessel weight as follows:

? ?
62 . 0
80 $ weight ? ? where weight is in pounds

For vessels where the shell thickness is 1.25 inches or
greater, the cost per pound is higher due to more expensive
fabrication requirements. For these heavy wall vessels, the
cost is related to the weight as follows:

? ?
7 . 0
56 $ weight ? ?
where weight is in pounds

For materials other than mild steel, see Figure 27-3 below.

Estimating the weight of a vessel:

Most vessels contain a gas and a liquid phase. Assume a liq-
uid holdup of 5 minutes with the vessel half full.

Use a length to diameter ratio of L/D = 2.5. Calculate the
cylinder area. Add 20% to the calculated area for the heads at
each end.
The thickness of the metal is given by:

t = Pressure x Diameter/2S,000*
where P is in psig
D is in inches
*Allowable Stress (for steel)
Add a minimum corrosion allowance of 0.125 inches.

Note Olin Engineerings practice is to specify that all
pressure vessels have a minimum design pressure of 50
psig. If you have a vessel that operates under vacuum,
then designing for 50 psig will almost always provide
sufficient shell thickness to be able to withstand vac-
uum conditions. .

One square foot of steel one inch thick weighs 40 lbs. Steel
plate comes in plate thickness increments of 1/16 of an inch.

Lxample:

A flash drum is required to handle 10, 000 ACFS of vapor
and 300 gpm of liquid at 100psig.

Volume = 600* gpm x 5 minutes x 1 cu ft./ 7.5 gallons =
400 cu. ft.

* 600 gpm to account for half full.

? ? L D V ? ? ?
2
4
?
Substitute 2.5 D = L and
? ? D D V 5 . 2
4
2
? ? ?
?
= 400 or approx. D
3
= 200
D = say 6 feet; L = 2.5 x D = 15 feet

A = p x 6 x 15 = 282 square feet. Add 20% for heads = 339
say 340 square feet.

t = 100 x 6 x 12 /25,000 = 0.29 inches.

t + c.a. = .415 inches Adjust up to nearest steel plate thick-
ness of 7/16 inch.

Weight = 40 x 7/16 x 340 = 5950 lbs. say 6000

? ? 600 , 17 $ 6000 80 $
62 . 0
? ? ? Cost

For the same vessel in stainless steel the cost will be:

Materials = .55 x 17,600 x 5.0 = 48,400
Labor = .45 x 17,600 x 1.4 = 11,100
Total = 59,500


IIG. 27-
Adustments for different materials of construction

Cost of Carbon Steel Low Chrome Steel Stainless Steel Hastelloy etc.
Materials 1.0 2.5 5.0 7.5
Labor 1.0 1.3 1.4 1.5

3


STAGED SEPARATION COLUMNS

Find length, diameter and wall thickness and calculate weight
as for pressure vessels except add a 15 foot long column skirt
of 3/8 carbon steel plate and add 15 % of calculated weight
for heads and appurtenances.
Length is number of trays x 2.5 feet plus 5 feet for disengag-
ing space at the top and 10 feet for a liquid reservoir at the
bottom. (This 15 feet does not include the skirt)

You can assume that the cost of trays and other internals is
equal to the cost of the column shell. That is to say a column
plus the internals (trays or packing) costs twice the shell cost.


Distillation Columns:

se the followin tale to estimate numer of actual
distillation trays

Product Purity <95% <98% <99% 99.5%
# of actual trays: 17/? -1 19/? -1 22/? -1 25/? -1

se the followin tale to estimate the reflux ration

Value of ? -1 >1 +/- 0.5 +/- 0.15
Reflux Ratio R/D 1 2.5 6


Stripping Columns and Absorber Columns:

Number of actual trays = 20. The liquid and vapor rates are
those at the V & L inlets.

Lxample

A distillation column is required to separate A and B. The
feed is 1000 mols/hr of A and 850 mols/hr of B. The rela-
tive volatility of A to B is 1.4. The MW of A is 40. The liquid
density of A is 50 lbs./cubic foot at the top tray conditions.
The column operates at 100 psig. and 150 F at the column
top. Product purity top and bottom is 98%.

Number of trays = 19/(1.4-1) = 48, Column length = 15 +
48 x 2.5 = 140 feet.

From above, reflux ratio = 2.5

Use the method found in Section 19 (Figure 19-14) of the
GPSA Engineering Data Book to find the column diameter.

The following information will be needed:

At the column top L = 2.5 x 1000 = 2500 mols/hr

2500 mols/hr x 40 lb/mol ? 50 lbs./ft
3
= 2,000 cu ft./hr =
250 gpm

At the column top;
V = Overhead Product + Reflux
? V = 1000 mols/hr. + 2.5* x 1000 = 3500 mols/hr

V = 3500 x 359 cu ft/mol x (14.7/115) x (460+150/460+32)
x 1 hr/3600 sec = 55.3 ACFS

Vapor Flow Rate = 3500 x 40 3600sec/hr = 39.8 lb/sec

Vapor Density = 38.9 lbs/sec/ 55.3cu ft./sec = 0.70lbs/cu ft



v
acfs Vload
l ? ?
?
?
?
v


Vload = 55.3 x v(.70)/ (50 - 0.70) = 7.1

From Figure 19-14, the column diameter is 5'6"

Thickness = 100 x 5.5 x 12/25,000 = 0.26 inches

Add 0.125 for corrosion allowance: t = 0.385"
Adjust to standard plate thickness: t = 7/16" (0.437")

W = 40 x p x 6 x 140 x 7/16 + 40 x p x 6 x 15 x 3/8 = say
48,000 lbs.

Add 15% for heads and appurtenances so weight = 55,000
lbs.

? ?
62 . 0
000 , 55 80 $ ? ? Cost Therefore cost = say $69,500
Double the shell cost to include the cost of the trays

Cost of column and trays = $ 140,000


HEAT EXCHANGERS

Heat exchanger costs are based on square feet of heat trans-
fer surface

For shell and tube heat exchangers use the following:

Heat exchanger design pressure in psig:
<300 300 600 >600
Cost = $8000 + $25/ft
2
$30/ ft
2
$35/ ft
2


The cost of an air cooler is = ? ?
87 . 0
110 $ A

Where A = heat transfer area in square feet

To approximate "A", divide the heat duty by the appropriate
heat flux rate as shown in FIG. 27-4 next page:




4


IIG. 27 -
eat Ilux in arious exchaners

Flux Rates (Btu/hr-sq. ft). Tubular Exchangers Air Coolers
Gas to Gas 3,000 3,500
Liquid to Liquid 8,000 9,000
Phase Change 10,000 11,000
Steam Condensing 12,000 N/A


Lxample

A heat exchanger is exchanging heat between reactor feed
and reactor effluent. There is a phase change on both sides.
That is evaporation on one side and condensation on the
other. The heat duty is 20 MM btu./hr.

Heat exchanger surface
A = 20 MM Btu/hr / 10,000 Btu/hr/sq. ft. = 2000 sq. ft.

Cost = 8,000 + (25 x 2000) = $58,000

For the same exchanger in high pressure (>600 psig) service:

Cost = 8,000 +(35 x 2000)= $78,000


FIRED HEATERS

Fired heaters are made up of convection surface and radiant
surface all contained in a firebox.

Assume the heat flux in the radiant section is 12,000
Btu/hr/sq. ft. and 3000 Btu/hr/sq. ft. in the convection
section. Assume that two thirds of the heat is absorbed in
the radiant section and one third in the convection section. If
there is steam raised in the convection section use a flux rate
of 20,000 Btu/hr/sq. ft for this section.

Calculate the cost of each section separately and then add the
cost of the firebox. Firebox cost is $50,000 + $50/sq. ft. of
installed heat exchange surface
Coil aterial /sq. ft. of Surface
Carbon Steel 100
Stainless Steel 250
Steam Reformer (HK 40) 500

Lxample
Basis a steam reformer where the radiant process duty is 120
MM Btu/hr and the convection process duty is 60 MM
Btu/hr and the steam generation duty is 30 MM btu/hr. The
radiant coil is HK 40, the other coils are carbon steel.
Radiant surface = 120,000,000/12,000 = 10,000 sq. ft.
Cost of radiant coil 10,000 sq.ft. x $500/sq. ft. = $5, 000,000
Convection surface = 60,000,000/3000 = 20,000 sq. ft.
Cost of convection coil 20,000 sq. ft. x $ 100 = $2,000,000
Steam Generation Surface 30,000,000/20,0000 = 1,500
Cost of steam generation coil = 1500 x 100 = $150,000
Total coil cost = $7,150,000
Firebox cost = 50,000 +50 x (10,000 + 20,000 +1500) =
$1,575,000
Total cost = $8,725,000
PUMPS
Pump horsepower is calculated by the following formula:
HP = GPM x specific gravity x Head (in feet)/3960/ effi-
ciency
For most services 75% is a good approximation of efficiency
so we can restate this as:
P = G.P.. x s.. x head/000
Multistage pumps are used when the head is > 450 feet
IIG. 27-S
Cost of arious Pumps

Pump HP Cost of pump and motor Cost of pump and motor
for single stage pumps for multi stage pumps

Up to 10 $5,000
10 50 $5,000 + $100/HP
50 500 $10,000 + $115/HP $25,000 +$125/HP
500 1000 $20,000 + $125/HP $30,000 + $150/HP
Over 1000 $25,000 + $150/HP $50,000 + $175/HP

5


COMPRESSORS
k
k
P
P k
k
ZRT Head
1
1
1
2
1
?
?
?
?
?
?
?
?
?
?
?
?
?
?

where Z = compressibility (@ inlet cond.)
T = inlet temperature in R
? = Cp/Cv
P1= inlet pressure (PSIA)
P2= outlet pressure (PSIA)
H = head (feet)

Theoretical Horsepower = Head x mass rate ( lb/second)
?550 ft lb/sec/HP

Divide by the efficiency (typically 77 %) to get Actual HP

Compressor Costs
Dischare /P for compressor and
Pressure(atm) motor drier

Less than 5 $ 100/HP
5 15 $ 1250/HP
Greater than 15 $ 1500/ HP
Lxample
Compress 5,000 mols/hour of air from 1 atm to 4 atm
T = 70 F k = 1.4 Z = 1.0
k-1/k = 0.29 R = 1544/MW = 53
Head = 1 x 53 x 530 x ((4
0.29
1)/0.29) ? 50,000 feet
W = 5,000 mols/hr x 29lbs/mol/3600 sec/hr = 41 lb/sec
HP = W x Head/550 = 41 x 50,000/550 = 3700 HP
Compressor and driver cost = $100/HP x 3700 HP
?$3,700,000


ATMOSPHERIC PRESSURE STORAGE TANKS

Installed cost is $.50/gallon or $132/cubic meter of capacity.

This includes foundations, dykes, sewers, and interconnect-
ing piping.


A. M. Center
School of Chemical Engineering
Cornell University