IPE Costs Comparison


Icarus Process Evaluator (IPE) is a tool that was developed to give process engineers an insight into the cost effectiveness of their designs, allowing them to evaluate the costs of different options in the early phases of a project. IPE uses heat and material balances to develop detailed designs, costs and schedules. The IPE output can be exported to ICARUS to develop a definitive cost estimate. IPE also generates output in EXCEL format, allowing the direct import into other cost estimating tools.

A study was conducted comparing the IPE cost estimate of an actual design versus the cost estimate of the equipment sized by IPE. Although IPE allows the user to manipulate the design criteria and the parameters of the sized equipment, these values were left as the default, to compare the cost of the default against the actual design.

IPE Functionality

The items of equipment form the foundation of the IPE cost estimate. The equipment items may be sized by IPE based on the data imported from process simulator software into IPE or may be manually entered by the user. IPE applies industry standards to the design, checks the internal mechanical design and simulates the fabrication and manufacturing of the equipment items to generate the man-hours and costs.

In addition to equipment, the other project components include plant bulks, site development i.e. demolition, drainage, earthwork, fencing, landscaping, roads, piling and railroads, and any buildings involved in the process or for off-site use.

In developing the piping, instrumentation, civil, steel, and electrical designs, IPE takes into account the plot area, process complexity, the soil conditions and the required power distribution and process control systems. An in-built P&ID library is used to determine the piping and instrumentation requirements for each item of equipment. The stream flows and conditions are used to size the pipes, and to select the pipe schedules and insulation requirements. The plot area is used to determine the pipe, electrical cabling/wiring and instrument signal wiring/tubing lengths. The soil conditions and placement of equipment i.e. on grade, pad or in a structure, influences the civil and structural design.

Based on the generated design, IPE determines the capital investment cost, the project schedule for basic engineering design through construction to plant start-up, operating costs and also performs an investment analysis.

Capital costs are reported as direct costs and indirect costs. Direct costs include materials and labour to install the process equipment, bulk materials for installation of process and off-site equipment, plant bulks, power distribution and process control network components, buildings and site development. Indirect costs include basic and detailed engineering, procurement, field supervision, construction equipment rental, commissioning and start-up costs.

Case Study

To increase the capacity of an existing process facility, it was proposed to add an identical unit to the four existing trains. A process simulation of one existing unit was developed and matched to plant operating data. Two models were entered into IPE. In the first model (Case 1), the actual equipment sizes were input into IPE. In the second model (Case 2), the Aspen simulation was imported into IPE and the equipment was sized by the program’s sizing experts.

The process facility equipment comprised one trayed distillation column, three centrifugal pumps, six shell and tube heat exchangers and two horizontal drums.

The IPE default material of construction is Carbon Steel, and since MOC has a large effect on cost, the MOC of applicable equipment and piping was changed to stainless steel. The resultant capital cost estimate for the two cases is summarised in Table 1.

Table 1: IPE Capital Cost Comparison for Two Equipment Sizing Cases

Description Case 1
Equipment Sizes
Manually Input K-R
Case 2
IPE Sizing of
Design, Engineering and Procurement 5114.05021.8
Material 27457.630239.6
Construction Manpower 3546.74667.3
Construction Indirects 5815.56940.2
Subtotal 41933.846868.9
Contingency 18% 7548.18436.4
Total 49481.955305.3

The capital cost of all material, in case 2 is 10% greater than the cost of the material as calculated in case 1. This can be attributed to the IPE system equipment over-design factors and non-optimisation of equipment design. The engineering costs are similar as both options consist of the same number of equipment items. Construction costs are greater in Case 2 since the tower and some of the heat exchangers designed by IPE are larger and heavier than the actual equipment items and are therefore more difficult to install, resulting in higher installation costs.

Most of the IPE sized equipment items are different to the actual and this results in the difference in cost. The draw-off and bottoms pump were not included in the Aspen simulation and were manually entered in Case 2, hence the cost estimate for these two items was the same. Reasons for the variations in cost are as follows:

  • The IPE calculated design pressures and temperatures are different to the actual which results in different vessel thicknesses
  • The tower designed by IPE is longer than the actual tower and contains more trays
  • The designed drums include boots, which are not required
  • The IPE heat exchanger designs are not necessarily the most cost effective and the areas/configuration also differ from the actual
  • The condenser pump has a much lower head than that required.

Sensitivity Analysis

To improve the accuracy of the cost estimate, the piping sizes, insulation requirements and control valve loops were changed in Case 1 to match the actual plant data. This estimate is referred to as Case 3 and the breakdown of the material costs is tabulated against Case 1 in Table 3. Case 2 is tabulated for comparative purposes.

Table 3: Breakdown of Material Costs

ItemCase 1 K-RCase 3 K-RCase 2 K-R
Purchased Equipment 14817.914817.615942.4
Piping 3340.64776.34400.1
Civil 469.3469.3491.5
Steel 131.5131.5148.4
Instrumentation 1360.91242.31489.7
Electrical 1476.21469.01507.9
Insulation 912.9594.1805.5
Paint 21.133.427.6
Total Installed Cost49481.950306.955305.3

The pipe sizes selected by IPE in Case 1 were smaller than the actual pipe sizes. The calculated pipe lengths were the same in all three cases since the defined plot area was the same. These pipe lengths were not manually changed in Case 3 as the plot layout has not yet been allocated or defined. The number of control valves was reduced for Case 3, resulting in a decrease of instrumentation costs. The insulation were also reduced for Case 3, since IPE used the input temperatures to determine the insulation requirements, and the user enter the design temperatures which are much higher than the operating temperatures.

Conclusion and Recommendations

For the case study in question, the capital cost of purchasing and installing the equipment designed by IPE was 10% greater than the cost of installing selected equipment. This is well within accuracy of a Rough Order of Magnitude estimate that is produced at the conceptual stages of the project.

IPE offers the flexibility to change the default design criteria as well as many of the calculated parameters. This allows the user to change the equipment/ piping/ instrumentation data as the design develops to improve the accuracy of the cost estimate. In this case, by entering known piping and instrumentation data the total cost increased by just over 1%, but the material costs spread between the different accounts is more accurate.

The specification of exotic materials has a great impact on cost. Therefore it is recommended that the user change the carbon steel default to the required MOC. Also, the user should also check installed sparing requirements on rotating equipment as the IPE default is to install only one item.

IPE is an excellent tool for generating order of magnitude estimates. It is important that the user checks that the data generated by the program meets the site requirements. For semi-definitive estimates, the IPE data can be exported to ICARUS, which allows cost estimators the flexibility to adjust all variables to generate a comprehensive cost estimate.

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