Engineering Cost Compared to Total Cost 3

[chirag514]

What is the engineering cost compared to total cost of a new process? I am interested in first time projects that have been unique to industry.

 

[dvd111]

It is different and depends on the size and type of the project. But in general it is in the range of 3% to 5%.
I will investigate and may send you more details later.

 

[owg]

In refining and petrochemicals we usually see engineering and home office costs in the range of 10 to 15 % of total field costs. We may have a broader definition of "engineering" than some folks. We would be including engineering, drafting, purchasing, accounting, construction and cost engineering, travel and living, and reproductions and communications, following the Table in Perry on the subject. 12% would be a good number to use in this industry.

HAZOP at

http://www.curryhydrocarbons.ca

 

[tickle]

I find it relatively easy to calculate the approximate times that are required for each stage, the number of people in the project team. This gives you a rough idea of the project execution strategy at an early stage.

 

[ardilesd]

In the our chemical company, engineering (third party & internal) is calculated as 10-15% of Total Direct Costs.

 

[dvd111]

From "plant design and economics for chemical engineers" by S. Peters:
The capital investment for engineering and supervision (design,engineering,drafting,purchasing,accounting,cost engineering,...)is approximately 30% of the purchased equipment cost or 8% of total direct costs of the plant with the following break down:
engineering 2.2%
drafting 4.8%
purchasing 0.3%
accounting,construction and cost engineering 0.3%
travel&living 0.3%
reproduction&communication 0.2%

TOTAL 8.1%

hope to be helpful.

 

[Niq]

Well, in addition to plenty of valuable suggestions as given above, I would recommend to consider engineering cost as 10% for smaller projects and 7% for bigger projects.

Regards

 

[MJCronin]

chirq,

I would caution you that the above percentages do not apply to very small process "projects"...

I have seen a few cases where the job was scoped out, meeting made with the clients,some small piping/valve changes were made, PIDs and HAZOPs were updated, new piping drawings were made, inteface with the fabricator etc. etc

The so-called "engineering" of these tiny projects can run 20-40% of the capital cost.....

Utility projects ( particularly those that are nuclear) can have high engineering costs also.

MJC

 

[sewerguy]

Hi,

Ilve been doing chemical plant projects from conceptual design, through detail engineering and contruction for the last 15+ years. When we prepare the +/- ~20% cost estimate (based on pfd/pid/no takeoffs) we allow 15% of total installed cost for home office engineering, and 5% for field indirects including construction management for a 20% total project management and engineering category. 5% is also commonly the number used for front end (scheule A) engineering design, and would actually be in addition to that.

If you are the one doing the cost estimate I would go in with these numbers as they allow you room to work for the future phases of the project.

These numbers have worked for me on $2 to $30 MM dollar projects.

SG

 

[azertyuiop]

I agree with Owg. However , the figure for smaller project may run higher , given the bureaucracy that is involved , compared to the lower CapEx material and construction scope of the project.

 

[Hookem]

If putting in highly engineered, skid equipment, the ratio of engineering might be as low as 5-6%; if "stick-building" everything, the ratio of engineering is normally 10-20%; if retrofit or revamp of existing facilities, the ratio might be as high as 40%.

DO NOT use any one fixed ratio.