Cost Savings through Upfront Design for new plants 2

[RPG]

I am looking for published articles or books that can be referenced showing that by doing a proper front end engineering package along with a proper detail design package the cost of the constructed facility will be decrease by x %. Specifically, I am looking for information pertaining to the Petrochemical field.

 

[DaveBridger]

Hi RPG,
I guess what you're really asking here is how long is a piece of string...!
There are no hard and fast rules that I am aware of that calculate saving on TOC(total cost of construction) before you start the project. That's the reason why the so called "front end engineering" is done, to find ways to save money, amongst others things. You have to remember that engineering accounts for roughly 20% of the TOC. By doing a good front end engineering package, you should be able to make significant saving on remaining 80%.
Dave

 

[DeltaCascade]

As I recall, studies in this area indicate that approx 80% of project hard capital costs are determined in front end engineering. Hence, it is at this up-front stage where the greatest opportunity for improvements in capital costs lie (not to mention later operating costs, etc).

Review of process simulation software vendors web sites, or contacting them directly, may provide the information you are looking for. It is this type of information that demonstrates pay-back in use of their products (eg: saving on surge tank cost by improving control through simulation exercises to minimize tank size and cost, or, etc, etc). I would check with Hyprotech or AspenTech and the like... They may have info on particular case studies or examples that may help ("proper" vs "improper" front end engineering? or rather, justifications for higher resource level application at the front end! Do it right the first time).

As DaveBridger said, above, that's why front end engineering is done. ...looking forward to any examples our fellow tipsters may have!

PS: One example I experienced was in a petrochemical plant expansion. As I understood it, it was decided to "simply" double up on utilities equipment as there was "no time" for front end engineering in the brownfield expansion (typical of utilities, work starts last, when process design is complete, yet typically needs to be completed first). Approx 1MM$ was spent on equipment that wasn't needed if time was taken to integrate existing and new processes. Applying a higher level of resources (utilities process skills), for a short period, would have provided the "time" required to take advantage of process integration opportunities.

http://www.DeltaCascade.com

 

[BakerEng54]

Working in Mining & Metals industry projects for many years, I have only recently been introduced to the FEED (Front End Engineerin & Design) terminology. The project phases I am familiar with include: Scoping or Concept Study, Preliminary Feasibility Study, Bankable Feasibility Study, Basic Engineering, Detailed Engineering, Construction and Commissioning. From what I have read thus far, FEED seems to incorporate the PFS, the BFS and the BE phases as I understand them. Can anyone point me to a resource which defines the scope and deliverables of FEED and its context in the overall project lifecycle. Or is the Oil & Gas industry as inconsistent and arbitrary as the M&M industry in the use of such terminology.

Many thanks

 

[sshep]

RPG

My company is using a company called IPA (independent project analysis) for benchmarking data on best practices including savings from FEL (front end loading), VIPs (value improving practices) and a bunch of other buzz words.

IPA has a website with some papers you can request. Maybe these can help:

http://www.ipaglobal.com/pubs/publications.html

best wishes,
sshep

 

[epoisses]

I may be getting cynical at this time of the night in a hotel room, but... really, the savings depend completely on how stupid you were in the base case, and there are no limits to that, unfortunately.

The harder you think, the more intelligent your design will be, certainly. But how much rework and inefficiency is created not by engineers who did not think hard enough, but by marketeers unable to define their requirements, managers who suddenly put projects on the fast track, arbitrary limits to the class N cost estimate ("no double digits please") due to which essential elements are eliminated and re-introduced at a later stage...

The saddest thing is that there are companies who make money out of this misery by benchmarking the stupid against the even more stupid...

 

[sshep]

epoisses,

I didn't realize this was an old dead post that was reactivated when I posted above. You might recognize my cynicism relative to seeming like we are being sold a bunch of "buzz words", but this was our flavor of the month for a while. In the end there are certain tasks required to design and build a project no matter how you slice it, and one man does about a manhour of work in an hour.

On the otherhand, I am thinking about starting a project consulting program called "just in time engineering" where I cite the savings of waiting until the last minute to engineer a project and then pull a lame design out of thin air. Based on past experience I think I might get some companies to bite.

best wishes always,
sshep

 

[epoisses]

I once went from basic design to commissioning within 5 days (just rental equipment ordered randomly by fax, with some temporary insulation around it, I bet it's still there after 5 years). It was a panic situation where everybody was convinced something had to be done no matter what. It's very refreshing compared to hours long review sessions. We did have one review of 30 minutes, I believe, where some people who had relevant but not too important comments left early because they were shouted at. I loved it but I think you'd end up with a heart attack when you do "just in time engineering" on a routine basis...
;-)