Capital Cost Estimation for Brownfield Chemical Projects

On many occasions, an EPC company entrusted with the task of submitting a bid for detailed engineering for a brownfield chemical project, would be asked to submit a preliminary capital cost estimate (CapEx) for the proposed project in order to obtain budgetary sanction from the management for implementation.

As already stated in my course Engineering cost estimation-Brownfield chemical projects , preparation of CapEx requires certain details and inputs from the customer as also data collected by the EPC company during site survey to assess the scope of the project. Further preliminary drawings like P&ID, Site Layout along with details of scope work are essential for performing this cost estimation.

This lecture attempts to define a practical methodology for CapEx estimation with a +/-20% variation in cost for a brownfield project in view of the limited details available for cost estimation and the need to comply with a short timeline specified by customer. Generally this activity will take about 4 to 6 weeks to make the estimate based on site survey report and drawings /data made available.

Here, we have assumed that supply of utilities like power, Process water, Cooling water, DM Water, Compressed Air, Instrument Air, Nitrogen, RM and main product storage tanks, vacuum System, Laboratory are under customer scope from existing facilities and only tie-ins for piping , electrical and instrumentation are to be covered in the cost estimation. This project is only an expansion of facility for manufacture by installation of above equipment with minimal investment for civil and structural works. The existing pipe and cable racks shall be extended to cover this new facility . This facility may need a new building to house the above equipment along with new MCC and addition of I/O cards in existing DCS.

The first step is creating an individual Excel template to capture the various expenditure to be incurred under all disciplines and populate the details based on above preliminary drawings/documents and site survey reports.