Chemical plant design & construction 2016

� 2012 Wiley-VCH Verlag GmbH & Co. KGaA, Weinheim

Article No : b04_477

Chemical Plant Design and Construction

ERICH MOSBERGER, Lurgi AG, Frankfurt, Federal Republic of Germany

1. Introduction. . . . . . . . . . . . . . . . . . . . . . 250

2. Feasibility Study . . . . . . . . . . . . . . . . . . 250

2.1. Initial Work . . . . . . . . . . . . . . . . . . . . . . 251

2.2. Cost Estimation . . . . . . . . . . . . . . . . . . . 252

2.2.1. Investment Costs . . . . . . . . . . . . . . . . . . . 2522.2.1.2. Global Methods of Investment Cost

Estimation. . . . . . . . . . . . . . . . . . . . . . . . 2532.2.1.3. Detailed Methods of Investment Cost

Estimation. . . . . . . . . . . . . . . . . . . . . . . . 254

2.2.1.4. Item-by-Item Calculation . . . . . . . . . . . . . 255

2.2.1.5. Cost Indexes . . . . . . . . . . . . . . . . . . . . . . 256

2.2.2. Operating Costs. . . . . . . . . . . . . . . . . . . . 256

2.2.3. EDP Support . . . . . . . . . . . . . . . . . . . . . . 257

2.3. Profitability Analysis . . . . . . . . . . . . . . . 257

2.3.1. Profitability Analysis as an Engineering Task 257

2.3.2. Methods of Profitability Analysis . . . . . . . 258

2.4. Site Selection . . . . . . . . . . . . . . . . . . . . . 259

2.5. Decision between Alternative Investments 259

3. Preliminary Design . . . . . . . . . . . . . . . . 260

3.1. Preliminary Design Costs. . . . . . . . . . . . 260

3.2. Final Selection of Site Locations . . . . . . 261

3.3. Process Design . . . . . . . . . . . . . . . . . . . 263

3.3.2. Optimization . . . . . . . . . . . . . . . . . . . . . . 267

3.3.3. Safety Aspects and Environmental Control 269

3.3.3.1. Protection Against Emissions . . . . . . . . . . 270

3.3.3.2. Noise Control . . . . . . . . . . . . . . . . . . . . . 270

3.3.3.3. Occupational Safety and Health . . . . . . . . 272

3.3.3.4. Plant Availability . . . . . . . . . . . . . . . . . . 272

3.3.3.5. Authority Engineering . . . . . . . . . . . . . . . 273

3.4. Basic Engineering . . . . . . . . . . . . . . . . . 275

3.4.1. Equipment Specification from the Process

Engineering Standpoint . . . . . . . . . . . . . . 275

3.4.2. Materials of Construction. . . . . . . . . . . . . 275

3.4.3. Plant Layout . . . . . . . . . . . . . . . . . . . . . . 279

3.4.4. Preliminary Piping and Instrumentation

Diagram . . . . . . . . . . . . . . . . . . . . . . . . . 281

3.5. Calculation of Plant Costs . . . . . . . . . . . 281

3.5.2. Equipment. . . . . . . . . . . . . . . . . . . . . . . . 282

3.5.3. Bulk Materials. . . . . . . . . . . . . . . . . . . . . 283

3.5.4. Other Costs . . . . . . . . . . . . . . . . . . . . . . . 284

3.6. Conclusion of Preliminary Design Phase 285

4. Contract Writing and Forms of Contracts 286

4.1. Licensing Agreements . . . . . . . . . . . . . . 286

4.1.1. Patent Licenses . . . . . . . . . . . . . . . . . . . . 286

4.1.2. Process Licenses . . . . . . . . . . . . . . . . . . . 286

4.1.3. Process Licenses via Engineering Contractors 287

4.1.4. Know-How Contracts via Engineering

Contractors . . . . . . . . . . . . . . . . . . . . . . . 287

4.2. Design and Supply Contracts with

Engineering Contractors . . . . . . . . . . . . 288

4.2.1. Selection of Engineering Contractors . . . . 288

4.2.1.1. Importance of Risk in the Plant Business . . 288

4.2.1.2. Selection and Award Criteria . . . . . . . . . . 288

4.2.2. Form and Content of Contracts . . . . . . . . 289

4.2.2.1. Basic Concerns in Contract Writing . . . . . 289

4.2.2.2. Contract Types and Provisions . . . . . . . . . 290

4.2.2.3. Essential Elements of a Contract . . . . . . . 291

5. Execution of the Project . . . . . . . . . . . . 293

5.1. Scope of Work . . . . . . . . . . . . . . . . . . . . 293

5.2. Project Organization and Management . . 294

5.2.1. Matrix Project Management . . . . . . . . . . 294

5.2.2. The Project Manager . . . . . . . . . . . . . . . . 295

5.2.3. The Project Team . . . . . . . . . . . . . . . . . . 296

5.2.4. The Start Phase of a Project . . . . . . . . . . . 296

5.3. Project Control (Schedules, Progress,

Costs) . . . . . . . . . . . . . . . . . . . . . . . . . . . 297

5.3.1. Time Scheduling . . . . . . . . . . . . . . . . . . . 297

5.3.2. Progress Planning and Control . . . . . . . . . 299

5.3.3. Cost Planning and Control . . . . . . . . . . . . 300

5.3.4. Project Report . . . . . . . . . . . . . . . . . . . . . 302

5.4. Detail Engineering . . . . . . . . . . . . . . . . . 303

5.4.1. Process Engineering. . . . . . . . . . . . . . . . . 303

5.4.2. Plant Layout . . . . . . . . . . . . . . . . . . . . . . 303

5.4.3. Apparatus and Machinery . . . . . . . . . . . . 305

5.4.4. Piping . . . . . . . . . . . . . . . . . . . . . . . . . . . 308

5.4.5. Control Systems . . . . . . . . . . . . . . . . . . . 312

5.4.6. Electrical Design . . . . . . . . . . . . . . . . . . . 315

5.5. Procurement . . . . . . . . . . . . . . . . . . . . . 316

5.5.1. Purchase of Equipment and Services . . . . 316

5.5.2. Expediting. . . . . . . . . . . . . . . . . . . . . . . . 317

5.5.3. Shipping . . . . . . . . . . . . . . . . . . . . . . . . . 317

5.6. Planning and Execution of Civil Work and

Erection . . . . . . . . . . . . . . . . . . . . . . . . . . 317

5.6.1. Planning of Civil Work and Erection . . . . 3185.6.1.1. Planning of Civil Work (Including Structural

Steel Work). . . . . . . . . . . . . . . . . . . . . . . . 318

5.6.1.2. Erection Planning . . . . . . . . . . . . . . . . . . 319

5.6.2. Execution of Construction . . . . . . . . . . . . 3195.6.2.1. Construction-Site Organization and

Management . . . . . . . . . . . . . . . . . . . . . . 319

5.6.2.2. Time Scheduling and Progress Control . . . 320

5.6.2.3. Construction Work . . . . . . . . . . . . . . . . . 321

DOI: 10.1002/14356007.b04_477

5.7. Commissioning. . . . . . . . . . . . . . . . . . . . 322

5.7.1. Plant Design and Commissioning . . . . . . . 322

5.7.2. Operating Manual . . . . . . . . . . . . . . . . . . 323

5.7.3. Responsibility and Organization . . . . . . . . 325

5.7.4. Preparation for Commissioning . . . . . . . . 325

5.7.5. Plant Startup . . . . . . . . . . . . . . . . . . . . . . 325

6. Computer Support . . . . . . . . . . . . . . . . . 326

6.1. Role of Computers in Project Execution 326

6.2. EDP Infrastructure and Systems . . . . . . 327

6.3. Coordination and Interfaces . . . . . . . . . 328

7. Quality Assurance . . . . . . . . . . . . . . . . . 328

8. Training of Plant Personnel . . . . . . . . . . 329

References . . . . . . . . . . . . . . . . . . . . . . . 330

1. Introduction

Since the 1930s, the design and construction ofchemical plants have become increasingly spe-cialized. Chemists and engineers collaborate todevelop process and engineering concepts,which engineers and designers then transforminto detailed plans and specifications for all thecomponents of a chemical plant. Purchasingagents procure equipment from specialist man-ufacturers. Construction and installation firmsare put under contract to build the plant.

Plant design and construction starts as an ideaof the potential owner. Increasingly complexmarkets and the interrelations of the world eco-nomic and political systems require critical ex-amination of every project for feasibility, eco-nomic relevance, and environmental impact. As arule, this is done with the aid of a feasibility studythat includes preliminary design work. Marketanalyses are carried out to determine potentialsales, future demand dynamics, availability ofraw materials, and the competitive situation. Theplant capacity and location are specified. Partic-ular attention must be paid to environmentalprotection. Studies are supplemented by suffi-ciently accurate estimates of capital require-ments and profitability.

Once the decision has been made to go aheadwith the construction project, whereby the ownermay have opted not to carry it out himself, theowner will prepare an accurate, comprehensivedefinition of the plant which is used as the basisfor inviting bids from competent engineeringcontractors. This approach is increasingly em-ployed, especially for large projects. (If the own-er has an adequate pool of experienced designengineers, construction specialists, and procure-ment staff, he may plan and construct the planthimself.) The conceptual phase of the projectends when an appropriate engineering firm ischosen and the contract signed.

The implementation phase consists of theengineering of the chemical plant, procurementof plant equipment and material, construction,and commissioning. The engineering contractoreither performs all of these tasks or brings insubcontractors or personnel employed by theowner to carry out a portion of the work.

Plant equipment is fabricated by specializedmanufacturers. Only in rare cases does the engi-neering contractor or the plant owner have pro-duction facilities.

After a successful test run, the plant is handedover to the owner. (Fig. 1 shows a schematicdiagram of the development of a chemical plantproject.)

This article does not discuss the design andconstruction of small, simple plants that special-ized firms can supply ‘‘off the rack.’’ It deals withlarger, more complicated projects in the field ofchemical plant construction. The term chemicalplant design and construction is used in a verybroad sense. It also relates to allied technologies,such as metallurgy, environmental protection,fiber and food production, and petroleum andnatural gas processing. Some of these basicproject development and execution principlescan also be applied to general industrial plantconstruction.

2. Feasibility Study

At the start of a project, the bases used forplanning are still very inexact. No major costsshould be incurred until it is known whether theproject is feasible or not. Nevertheless, all alter-natives must be considered. A great deal ofexperience is needed if uneconomic variants areto be discarded without generating high designcosts. The first steps toward accurate definition ofthe project are carried out by the company thatwishes to erect the plant. A small working group

250 Chemical Plant Design and Construction Vol. 8

is formed, consisting of process engineers, salesengineers, and other engineering personnel. It isuseful to appoint a project leader to coordinatethe team. Normally, the same person will laterbecome responsible for implementing the projectif the decision is taken to proceed.

Preliminary studies aimed at defining theobjective partly depend on initial economic es-timates and generally include:

1. Market analysis and trend analysis2. Fixing of production capacity3. Examination of competing processes and of

the patent and license situation4. Legal aspects5. Estimation of investment costs6. Estimation of production costs7. Estimation of profitability8. Selection of an appropriate plant location

2.1. Initial Work

Market Analysis and Production Capa-city. Before the economically optimum plantcapacity is set, a careful market analysis must becarried out. This analysis must be performed by

experienced market analysts, even if the producthas a comprehensive international sales history.These specialists evaluate literature on the de-velopment of similar products, determine thecapacity of existing production facilities, carryout representative surveys, obtain suitable con-ditions from downstream processors in the caseof intermediate products, and forecast the futuremarket for the product. They must also provide arealistic evaluation of the competition and theworld economic situation. Forecasts of costs forraw materials and working capital play an im-portant role in the economic analysis.

A new chemical product usually experiencesslow early growth with a relatively high price andlow output. The market then expands; productionclimbs faster and prices drop. Finally, pricesstabilize at a low level, and older, smaller plantsare shut down (see Fig. 2). If market analysisshows that world output of the product is stillincreasing rapidly, expansion of capacitythrough erection of a new plant may have a goodoutlook if other conditions are favorable. Thefuture price decline must, however, be allowedfor in the calculations.

In the upper part of the trend curve, invest-ment only makes sense if a clear demand is

Figure 1. Development of a project

Vol. 8 Chemical Plant Design and Construction 251

perceptible in the market. The production curvefor the old process may fall off if a new, moreeconomical production process appears. (Exam-ple: low-pressure process for methanol produc-tion forces shutdown of older high-pressure pro-cess.) The new process may open up new marketsand lend new impetus to development [1–4].

Competing Processes, Patent and LicenseSituation. The patent and license situationmust be investigated at the beginning of thestudy. Foreign patents may block the construc-tion project if the owner of the patent is notprepared to grant a license (see also Chap. 4).

Legal Aspects. Extensive, far-reaching en-vironmental regulations mean that it is essentialto make an early approach to authorities that willlater have to approve the operation of the plant(see Section 3.3.3.5).

2.2. Cost Estimation

If initial planning work has shown that invest-ment is desirable and the market analysis has ledto a tentative capacity figure, a first estimate ofinvestment costs and subsequent operating costsis performed.

Simply calculating and analyzing the invest-ment costs is not sufficient because, over theservice life of a plant, operating costs make upa much greater proportion of life- cycle costs thaninvestment costs do. The goal of cost estimationin the conceptual phase is to optimize the life-cycle costs of a chemical plant. This often meansincreasing investment costs so as to lower oper-

ating costs. Operating costs are favorably influ-enced by long component and equipment life-times, improvements in maintenance and con-sumption, and other factors. Cost prediction asthe basis for profitability analysis should there-fore include the determination of investmentcosts as well as subsequent production and oper-ating costs.

The following sections discuss methods ofdetermining investment and operating costs.

2.2.1. Investment Costs

A proven technique in investment cost estima-tion is to subdivide the project into onsite andoffsite items.

Onsite Items. The term onsites denotes allfacilities required to make the desired product.

Offsite Items. Offsites are all facilities thatare normally not located within the process plant.They include facilities for the delivery of steam,electric power, gas, solid or fluid fuels, water,compressed air, and instrument air. Furthermore,this group includes stockpiles and warehousesfor raw materials and semifinished and finishedproducts; service facilities (administrative build-ings, canteens, workshops, stores, laboratories,parking, fire protection, roads, tracks, and harborfacilities); and, finally, power plants; loadingdocks; facilities for treating raw materials, off-gas, wastewater; and waste disposal facilities.

In the United States, offsites are usually di-vided into storage and handling (stocks of rawmaterials and finished products), utilities (gener-ation or delivery of energy as steam, electricity,and water), and service facilities (e.g., offices,recreation rooms, laboratories, workshops,warehouses).

On grounds of cost, an attempt must be madeto carry out an ‘‘order-of-magnitude’’ estimate atminimal cost. This estimate is of course inexact,but later it makes it easier to decide whether tobear the costs for an accurate analysis. Theapproximate determination of investment costsis subdivided into simple ‘‘global’’ methods and‘‘detailed’’ methods. Methods for estimating in-vestment costs are now well-established; thosenow in use are described in publications mainlydating from 1960 – 1984.

Figure 2. Development of a new product


2.2.1.2. Global Methods of Investment CostEstimation

Global methods permit investment costs to beestimated relatively easily and with an accuracybetween � 30 % and � 50 %. Several methodsare outlined below [5].

Single Complexity Factor. In the single-complexity-factor method [6] processes are clas-sified as having a low, medium, or high com-plexity factor.

Low Complexity Factor. This class includesall batch processing plants and all processesinvolving simple syntheses (e.g., production ofsulfuric acid).

Medium Complexity Factor. This classcomprises processes with gas and fluid phasesthat run at ordinary pressures and temperatures.

High Complexity Factor. This class coversprocesses with high pressures and/or tempera-tures, as well as polymerization processes.

Investment costs depend on the complexityfactor and the required plant capacity, and aredetermined from empirical data obtained in otherprocessing plants. Auxiliary and utility units aretaken into account by adding 45 %.

This method has the advantage that it permitsestimation of investment costs in the orientationphase when little information about the process isavailable.

Turnover Ratios. The turnover-ratio meth-od allows costs to be estimated without processinformation by using market information such asproduct sale price and sales volume [7].

On the basis of plants already on-stream, acapital turnover ratio is obtained by dividing theannual return on sales by the investment costs. Astatistically determined turnover ratio and anexpected annual return on sales are then used toestimate the investment costs of new plants.Turnover ratios in the chemical industry liebetween 1.2 and 1.5.

Statistical turnover ratios can be found for theanalysis of individual plants, companies (basedon balance sheets and profit-and-loss statementsof typical firms), or a whole industrial sector.

Degression Exponents. The use of degres-sion exponents (cost-versus- capacity exponents)per-mits relatively accurate cost estimation. The

technique is based on costs for plants already on-stream. The exponents are used to estimate in-vestment costs for the planned facility as a func-tion of plant capacity.

Investment costs for proces plants are pub-lished from time to time and can be used forinitial cost estimation. The costs of identical orsimilar plants within the same company can beused in a similar way. In 1967, J. E. HASSELBARTH

[8] published the costs of process plants for 60chemical products, including investment costsper tonne of annual capacity. His figures referredto costs within battery limits (i.e., within the plantboundary), exclusive of land and offsite facili-ties. In 1970, K. M. GUTHRIE [9] compiled theinvestment and operating costs for 54 chemicaland refinery processes covering a wider capacityrange. The degression exponents cited in bothpublications allow the calculation to be applied toother capacities. (Example: Given a degressioncoefficient of 0.7, doubling the capacity leads toan increase in investment costs by a factor of20.7 ¼ 1.65.)

When specific degression exponents are usedit should be noted that the error range grows withthe capacity scaling factor. This type of calcula-tion generally gives acceptable results only forscaling factors of up to 1: 3. Furthermore, the useof the method depends on the state of the artbecause changes in processes, apparatus, andmechanical technique can change the exponents.

Comparative Methods. When adequatedata are available from an existing plant similarto that being planned, the investment costs of theold plant can obviously be used to calculate thecosts of the new one.

The following information is needed [5]:

1. Production capacity2. Construction time3. Investment costs (inside and outside battery

limits)4. Location

Costs inside and outside battery limits are bothdetermined with degression exponents. Cost es-timation outside battery limits must, however, bepreceded by a critical analysis of the auxiliaryand utility units needed. The figures are adaptedto the location by the use of indexes to adjust forthe following [5]:


1. Construction location2. Economic situation of the industry3. Taxes4. Labor market5. Qualifications of available labor

2.2.1.3. Detailed Methods of Investment CostEstimation

If the preliminary planning as embodied intechnical documents has reached an advancedstage, it can form the basis for investmentcost estimation that takes into account specificdetails of the project. Methods used for thisare mainly based on analogies with plants thatare already on-stream. Detailed methods ofplant matching [10] and multiplication-factortechniques of cost determination are emp-loyed.

Lang Factor Method. If the process is wellcharacterized, the required capacities of fur-naces, apparatus, and machinery can be specifiedin preliminary flow sheets [11]. These specifica-tions cover main plant items such as furnaces,columns, filters, reactors, heat exchangers, ves-sels, and machinery. The estimator can determinethe costs ‘‘free-on-site’’ for such items or obtainthe costs from suppliers.

LANG used cost analyses of existing plants toderive multiplication factors that allow determi-nation of the investment costs for process unitswithin battery limits if the costs of the mainequipment items are known [12]. The factorsdepend on the type of plant. LANG distinguishesthree types according to the state of aggregationof the raw material and product: ‘‘solid’’ (e.g., oresintering), ‘‘solid – fluid’’ (e.g., oil – shale re-torting with shale – tar recovery), and ‘‘fluid’’(e.g., petroleum refineries, petrochemical plants).

If the costs for the main plant items are takenas 100, total processing-plant costs are found bymultiplying by 3.10 (solid-processing plant),3.63 (solid – fluid-processing plant), or 4.74(fluid-processing plant).

CHILTON [13] and HAND [14] have improvedthese approximate Lang factors by introducingsupplements to the costs of main equipmentitems. Estimates of the total costs of a ‘‘grass-roots’’ plant can then be made. Figure 3 outlinesthe procedure for preliminary calculations by theLang – Chilton method.

Other authors have extended and refined theLang method. For example, BURGERT in 1979published an analysis of investmentcost struc-tures for more than 100 projects [15].

In 1965, MILLER [16] devised another systembased on modified Lang factors. MILLER assumedthat the factors are influenced by three otherparameters besides those used by LANG (solid,solid – fluid, fluid):

1. Size of main equipment items2. Material from which the plant is constructed3. Pressure for which the plant is built

Increasing size, more refined materials, andhigher operating pressure increase the relativecosts of the main equipment items in relation tostorage, utilities, and service facilities, thus di-minishing the factors. According to MILLER, allfactors can be referred to the mean per-piececosts of plant parts and depend on these.

Guthrie’s Modular Technique. The mod-ular technique published by GUTHRIE [17] in 1968is also based on LANG’s method and is the best ofthe multiplication-factor approaches. The projectis first broken down into six modules [10]:

Five direct modulesChemical processesSolids handlingSite developmentIndustrial structures (civil work)Auxiliary and service facilities outside batterylimits (offsites)

One indirect moduleIndirect project costs

The key costs of the direct modules are deter-mined first. For the ‘‘chemical process’’ module,these might be costs for machinery and equip-ment. As shown in Figure 4, the key costs of thedirect modules are multiplied by the gross mod-ule factors. The sum of the individual ‘‘grossmodule costs’’ gives the investment costs for on-and off-battery facilities.

GUTHRIE proposes a variety of methods forcalculating the equipment costs of a module. Themultiplication factors required for this includenot only size of the component (magnitude fac-tor) and the alloy factor, but also indirect effects.


This relatively accurate modular technique hasnot found wide acceptance, however, because itis relatively difficult to perform the calculationand maintain the statistical data base.

2.2.1.4. Item-by-Item Calculation

When detailed methods of investmentcost esti-mation do not give sufficient accuracy, the only

alternative is to calculate investment costs itemby item. The plant equipment and the engineer-ing work must be specified. The procedure andamount of work required for such a cost estima-tion are the same as those described for calculat-ing plant costs (see Section 3.5). Close coopera-tion between the subsequent operator of the plantand an engineering firm has proved advantageousfor this approach.

Figure 3. Preliminary cost estimate using factors (Lang – Chilton method)


2.2.1.5. Cost Indexes

The methods of investment-cost estimation dis-cussed above are generally based on historicalstatistics derived from existing plants. The costfigures obtained by these methods are thereforereferred to given periods, such as 1985. If invest-ment costs are to be estimated for the year 1990,the estimates must be adjusted to current prices.Every industrial country publishes one or moreindexes for this purpose. Some widely usedindexes for the United States and Germanyfollow:

1. Bureau of Labor Statistics cost index forequipment, machinery, and materials in theU.S. market

2. Chemical Engineering Plant cost index[18–20]

3. K€olbel – Schulze index for chemical plants(K€olbel – Schulze Index f€ur Chemieanlagen)[21]

4. Producer price index for commercial products(Index der Erzeugerpreise gewerblicher Pro-dukte) compiled by the German Federal Sta-tistical Service (Statistische Bundesamt)

These indexes are based both on chemical-plant cost structures and on national primaryprice indexes. Figure 5 compares important costindexes over time.

2.2.2. Operating Costs

Along with the investment costs, the operat-ing costs incurred in the production of a givenproduct also play an important part in deciding

Figure 4. Simplified modular concept for estimating investment costsF ¼ net module factor; F2 ¼ gross module factor

Figure 5. Development of cost indexesa) CE Plant cost index, 1959 ¼ 100, successively publishedin [18] (1982 revision of productivity factor from 2.50 to1.75); b) K€olbel – Schulze index, 1976 ¼ 100, successivelypublished in [19]


whether to erect a plant. The technical and eco-nomic literature, however, contains little infor-mation on the preliminary calculation of operat-ing costs. Possible reasons are the complexity ofthe problem and the company’s possible loss ofmaneuvering room if internal operating datawere published [22].

The methods of estimating operating costsdiscussed below are based on data from compa-rable plants or empirical data from plants belong-ing to the same company [22].

They are related, but differ as regards startinginformation: published data, empirical data,business information, physical data, correlations,and information from comparable plants. In or-der to check the reliability of the results, operat-ing costs should be estimated by several methodsso that the calculations can be verified and errorranges given.

Graphical Method. The graphical methodis based on statistical evaluation of operatingcosts in existing plants. Operating costs per unitof product are plotted versus plant capacity. It isimportant to be aware of the scope of the plottedcosts. The graph usually includes only themanufacturing costs of a product: raw materials,power, catalysts, chemicals, wages, depreciation,and maintenance. Plant overheads, fixed costs,and indirect production costs should also betaken care of by multiplication factors.

Business Analysis. The analysis of bal-ance sheets and profit-and-loss statementsfrom companies that manufacture the productin question as their main commodity may alsobe helpful.

Energy-BasedMethods. Chemical produc-tion processes involve large amounts of energy.The chemical reactions themselves often contrib-ute very little to energy requirements but up-stream and downstream operations do. This factprovides the basis for several methods used toestimate operating costs [13], [23–25].

Key Cost Categories. If it is assumed thatchemical plants show relatively constant operat-ing- cost structures for a given product, operatingcosts can be calculated with multiplication fac-tors if a single cost category is known accurately[22].

ScaleupMethods. When operating costs forsimilar plants are known,specific data can beused to derive scaling coefficients for propor-tional, personnel-dependent, and investment-dependent costs. The operating costs can thenbe estimated.

2.2.3. EDP Support

A number of manufacturers and operators haveestablished electronic data processing (EDP)programs for estimating investment and operat-ing costs. Examples are Factest (ICI) [26] and theASPEN package [27]. The ASPEN PLUS soft-ware, a flow sheet simulation program, is sup-plemented with a costing module.

The program sizes the most importantequipment and machinery from the processsimulation. Investment costs are estimated bythe use of multiplication factors and costindexes to adjust to current price levels.ASPEN PLUS allows the calculation not onlyof fixed costs for an investment, but alsooperating costs.

To determine operating costs, the programcalculates fixed and variable components sepa-rately. Variable costs include raw materials,fuels, catalysts, disposal, and ‘‘running royal-ties’’. Fixed costs comprise personnel costs formaintenance and operation, overheads, insur-ance, and taxes. The program generates summa-ries and details of annual operating costs. Finally,the software can evaluate a variety of profitabilitymeasures (Section 2.3).

2.3. Profitability Analysis

2.3.1. Profitability Analysis as anEngineering Task

In profitability calculations, it is necessary tokeep in mind that a plant erected without reserves(standby units) for unavoidable shutdowns andrepairs will produce for only 330 days (or8000 h) a year; that is, it will attain only ca.90 % of rated capacity on a long-term basis.Manufacturers generally rate their equipment foroperation at 10 % over capacity. However, thisfigure only applies to intermittent overloads andis not guaranteed.


If full-load operation is required all year, theplant must not be designed as a single-train(single processing line) facility, unless it is setup for 110 % capacity and adequate storage isprovided for the finished product. Large storageareas are needed if sales are seasonal (e.g.,fertilizers).

Because the feasibility study includes com-parisons between alternative processes, two pro-cesses with equal profitability need not be rankedequally. For example, both may have equalproduction costs but different fixed costs.

Fixed costs usually comprise interest pay-ments and operator wages. Nearly all other costsdepend on output and are therefore variable (e.g.,costs of raw materials, power, and fuel). Ifmarket conditions make it necessary to reducethe output to, say, 80 % of rated capacity, theplant with high fixed costs will become unprofit-able more quickly. Thus, in the case of twoequally profitable plants, the plant with the lowerfixed-cost contribution will be preferred. Highfixed costs often have to be accepted, if the needfor reliable operation dictates that critical parts ofthe plant must be designed with 100 % standbycapacity or the plant must be subdivided intoparallel trains.

The profitability calculations must take intoaccount that 2 – 2.5 years usually elapse be-tween the start of planning and the commission-ing of the plant. Interest therefore has to be paidon design and construction costs. Working capi-tal is also needed for storage of raw materials andproduct. Finally, for technical or market-relatedreasons, a period of 6 – 12 months generallyelapses after commissioning before the utiliza-tion of the plant is sufficient to cover the costs(break-even point). Only then does the returnflow of capital begin.

The history of an investment is illustratedschematically in Figure 6.

2.3.2. Methods of Profitability Analysis

Methods for assessing the profitability of a proj-ect [1, pp. 285 – 401], [28–33] differ in the wayinvestment, revenue, and risk are associated. Thethree most important techniques are describedbriefly below.

These profitability calculations are combinedand linked with operations research techniques

[34], [35], so that alternative proposals can beobtained with a justifiable amount of effort.

Payout (Payback) Period. If alternativesare only to be compared, it may be adequate todivide invested capital by gross excess revenues(proceeds from sales minus operating costs).This method gives a quick indication as towhether the investment is attractive. If, forexample, a value of 3 (payout period 3 years)or less is obtained, the investment should beprofitable. This does not mean, however, that theplant will be completely written off after threeyears on stream.

A more realistic figure can be obtained byincluding taxes and interest under expenses andlisting revenues by year after commissioning(higher operating costs in the first year when fullcapacity has not been reached, future decline inearnings).

Return on Investment (ROI). In largechemical companies, investments depend not somuch on the payout period but on whether theinvestment will increase total profits, i.e., divi-dends to the stockholders. Thus a large companywill only invest if a certain return on investedcapital is ensured. The ROI method is employedin such cases. The annual profit before taxes andinterest, but after depreciation, is divided by theinvested capital. In contrast to the precedingmethod, startup losses are neglected and datafor design- capacity operation are used in the

Figure 6. Schematic showing the course of capitalinvestmenta) Accumulated profits; b) Return on investment; c) Totalproduction costs (fixed and variable); d) Fixed costs; e) Ac-cumulated cash flow


calculation. The result is a pretax rate of return oninvested capital.

Dynamic Calculations are based on thediscounted cash flow (DCF) method. The DCFmethod is an advance over ROI. It allows for thefact that investment costs precede revenues.Since only funds existing at the same time canbe compared, all revenues and expenses that aredirectly or indirectly related to the project fromthe start of planning onwards are discounted to afixed time, usually the start of production. A rateof return is then sought that makes the sum of thediscounted annual excess revenues equal to thecash value of the total investment at the start ofproduction. Since excess revenues are spreadthroughout the entire year, they are all recalcu-lated to the middle of the year and discountedfrom then on. The calculation runs over theeconomic life of the project, but usually only10 years, since the longer-term market positioncan scarcely be foreseen. Furthermore, the equiv-alent value of revenues after more than 10 years isso small that it has little effect on the result(internal rate of return).

2.4. Site Selection

The selection of an optimal site is a high-priorityitem in the feasibility study. Every economicregion has its advantages and disadvantages. Thepresent and future importance of correct siteselection can scarcely be overstated. Wrong sitechoices cannot be corrected later and have led tothe downfall of many companies.

The development of world trade and the de-cline of tariffs have changed the environment ofmany existing plants for the worse. Formerly, forexample, the steel mill was located near the cokeplant and iron ore transported to it. Today, themost important Japanese steel mills are locatedon the coast and import coal and ore from over-seas. Petroleum refineries used to be sited atpetroleum sources. Now that giant tankers andpipelines have come into wide use, refineries areoften located in consumption centers.

Many large chemical companies are now in-vesting in coastal and foreign property. Goodsurveys of publications important in site selectioncan be found in [1, p. 439], [36–38]. STOBOUGH

has devised a selection system, based on a point

ranking, which allows unsuitable sites to be elim-inated quickly. The short list of remaining sitesshould then be examined as described below.

Site Quality, Topography, Soil Conditions,Climate, Flood Risk. The short list should in-clude only locations that appear suitable for theplant and possible subsequent expansions fromthe standpoint of size, price, transportation facil-ities, and buildability.

If the terrain is not flat, it should be establishedwhether grading or filling is necessary andwhether piles must be driven for foundations. Iftransportation facilities (roads, railroad tracks,water routes) are lacking, the expense of devel-oping them must be ascertained. Only costs fordeveloped sites can be compared.

Raw-Material Availability IncludingPower, Fuels, andWater.Raw materials of goodquality must be available at a favorable pricethroughout the service life of the plant. Otherprerequisites are availability of sufficient freshwater, electric power, and fuels. Obtaining powerand steam on a grass-roots site can be expensive.

EnvironmentalConditions, EnvironmentalLegislation, and Infrastructure of the Con-struction Site. Improved roads, rail connections,and location on harbors or year-round navigablerivers are important criteria.

Long-Term Availability of QualifiedLabor. In developing countries, leading person-nel – from foremen to management – must meetvery stringent requirements. Only after years ofschooling will local personnel have the requiredstandard of education.

Raw-material costs, wages, and maintenancecosts are also crucial in site selection. Finally, itmust be taken into account that the phase ofstartup losses will be longer if an industrial sitehas to be developed from scratch.

2.5. Decision between AlternativeInvestments

Preparation for Decisionmaking. Largeinvestment projects involve exploration of wide-ly varying options. In addition to straight profit-ability analysis, qualitative factors should also beconsidered (e.g., special site problems, politicalenvironment, market development). Thesequalitative factors involve risks, which mustalso be assessed. The preparation phase for


decisionmaking therefore includes not only cal-culation of investment and operating costs, butalso risk and sensitivity analysis [39].

Risk Analysis. In risk analysis, all constraintsthat can have an adverse effect on life- cycle costsand earnings must be identified, documented, andassessed. These include:

1. Estimation of sales market2. Energy cost development3. Availability of raw materials4. Plant construction risks5. Management-related risks (e.g., site-depen-

dent problems, reliability of vendors andsubcontractors)

6. Organizational risks

The financial effects of the identified risks arequantified by experts in risk-assessment proce-dures and the results then evaluated in a MonteCarlo simulation [39].

Sensitivity Analysis. Sensitivity analysisshould be carried out to find out how the profit-ability and risk situation changes when certainassumptions and constraints are varied. For ex-ample, it might be asked how much the invest-ment costs would have to be reduced to allow thedesired profit and an acceptable amortization.

A calculation of annual revenues based on thequantity of product that can be sold in the marketand its price allows a variational calculation of thistype to be made. The expected profit is deductedfrom the sum over the project life. The remainderrepresents the maximum available investment andoperating costs that have to be optimized in severalsteps. This approach is called ‘‘design to cost.’’Investment costs are often minimized in this ap-proach by designing lowcost plants (usuallyopen-air plants with simple equipment and nostorage capacity for intermediate products).

Several iterations are usually required to reachan optimum between investment costs and oper-ating costs.

Decisionmaking. Profitability, sensitivity,and risk analyses may lead to the conclusion thatexecution of the project is not desirable. Recentpublications may have already shown that similarprojects undertaken by third parties will oversat-urate the market. Other companies may have

access to such good raw-material sources thatthe company considering the project cannot com-pete. It may be that environmental regulationshave a prohibitive effect on costs. The planningwork should then be stopped until new informa-tion or analyses suggest a different conclusion.The avoidance of huge losses on a badly plannedfacility far outweighs the costs incurred up to thispoint. If, however, the feasibility study reveals apositive situation, the next step is to incorporatethe capital requirement into the company’s in-vestment program and give the go-ahead to startpreliminary design.

3. Preliminary Design

The following results from the feasibility studyprovide the basis for deciding to proceed to thepreliminary design phase:

1. Plant capacity has been set on the basis ofmarket research

2. The choice between expansion of an existingfacility and construction of a new one hasbeen made

3. The list of potential sites has been shortened totwo or three alternatives

4. The projected capital outlay has beendetermined

5. The projected production costs for the producthave been determined

6. The payout time and profitability have beenestimated

The main task in preliminary design is toobtain a more exact calculation that takes intoconsideration all costs up until commissioning.The first step toward this objective is to work outthe engineering details.

A qualified project leader directs the prelimi-nary design. Specialist engineering teams (e.g.,for process calculations, equipment design, plantlayout, and estimations) provide advisory sup-port [40].

3.1. Preliminary Design Costs

The funds and time spent on preliminary designcan be considerable, depending on how pre-ciseplanning and budget are to be. Although highly


accurate results are always sought, technicaldocumentation and calculations should be re-fined only to the degree necessary for subse-quently deciding whether to implement the proj-ect. Events during the preliminary design periodmay force the abandonment of the project.

If the feasibility study predicts very favor-able profitability, less accurate calculations (say� 20 %) may be acceptable; if the project isexpected to be marginally profitable, betteraccuracy (e.g., � 10 %) is needed. Figure 7[41] shows the basic information required forgiven accuracy levels. Even if the upper andlower limits of the percentage ranges in Figure 7are made equal, the probability of exceeding theprojected costs is greater than that of fallingshort of them. This is primarily due to subse-quent additions that are not known at the timewhen the calculation is performed. A ‘‘contin-gencies’’ item is therefore commonly includedin the calculation.

Design costs for preliminary calculations atvarious accuracy levels, according to the Ameri-can Association of Cost Engineers [42], are pre-sented in Table 1. Specific empirical figures aregiven in [43].

Preliminary design requires a special projectteam consisting of persons with the necessaryexpertise. A chemical company whose engineer-ing staff is oriented mainly toward maintenanceand the occasional addition of new pieces ofequipment should not attempt to perform thepreliminary design of a large plant or a branchplant in-house. Such a department lacks appro-priate experience and is also short of capacity.The need to hold down design costs and maintainthe performance level of in-house engineeringstaff on their specific tasks, forces even largechemical firms to collaborate closely with exter-nal engineering contractors who will later be incharge of executing the project. External engi-neering firms usually offer cost advantages be-cause they have so much experience in theirroutine fields that they can quickly estimatereliable cost figures for projects based on well-known processes.

The client’s role is limited – at least as far asestablished processes are concerned – to makingprocess knowhow available, purchasing li-censes, and cooperating with the engineeringcontractor in customizing the plant to relevantrequirements.

Contract forms have been developed for thecollaboration between the customer and the en-gineering firm in the basic-design and/or detai-lengineering phases, as well as for procurement,supply, construction, construction supervision,and commissioning (Section 4.2.2).

Another option for cutting design costs is forthe chemical firm to obtain a process license, withthe licenser providing the complete ‘‘basicdesign.’’

3.2. Final Selection of Site Locations

After the feasibility study two or three suitablesites are often available for the new plant. Afinal decision can be made only after detailedstudy.

If the potential sites are close to the client’sparent plant, similar fringe conditions can beassumed to apply for the purpose of site compar-ison. If, however, a branch plant is to be erected ina foreign country, conditions are usually differ-ent which means that each of the alternatives hasto be carefully analyzed.

Important constraints besides those alreadylisted in Section 2.4 include:

1. Medium- and long-term capacity of the local(national) market to absorb the product

2. Export to nearby countries3. Availability, quality, and price of raw

materials4. Political situation and risks (e.g., risk of

nationalization)5. Tax laws, tariffs, possibility of repatriating

profits

If, for example, one country has cheap rawmaterials but a limited capacity to absorb theproduct, partial upgrading of the raw material andfabrication of intermediate products should beconsidered. Manufacture of the end productwould then take place where there is adequatelong-term demand and a suitable distributionnetwork.

A team of the client’s experts should performa thorough on-site examination of each alterna-tive before the final decision is made; closecontact with national and local government agen-cies is important. The recommendations of thisteam should weigh heavily in the choice of site.


Figure 7. Accuracy of cost assessment based on available information [41]


Partnership with qualified domestic enter-prises is becoming increasingly popular (e.g.,joint ventures).

3.3. Process Design See also ! Process

Development, 1. Fundamentals and

Standard Course

The feasibility study defines the process objec-tive, i.e., it specifies products (type and quantity),

feedstocks and auxiliaries (type and quantity),and local conditions (environmental situation,elevation, climate, energy situation). This objec-tive, together with the overall state of the art andthe experience of the operater, licenser, or plantdesign and construction contractor, provide thebasis for process selection.

Process selection can be done most simply inthe form of a block flow diagram (Fig. 8), inwhich each block represents a unit operation or,in complex plants, a plant section containing

Table 1. Design costs for cost estimates [43]

Type of estimate Synonymous terms Accuracy, % Costs as percentage

of project value

Order of magnitude estimate ratio estimate � 30 – � 50 0 – 0.1

seat of the pants estimate

ballpark estimate

guesstimate

Study estimate evaluation estimate � 20 – � 30 0.1 – 0.2

predesign estimate

factored estimate

Preliminary estimate sanction estimate � 10 – � 25 0.4 – 0.8

funding estimate

authorization estimate

budget estimate

Definitive estimate project control estimate � 5 – � 15 1 – 3

Detailed estimate tender estimate � 2 – � 5 5 – 10

contractor’s final

cost estimate

Figure 8. Block flow diagram (olefin plant)


several unit operations. The blocks are joined bylines representing the principal material andenergy streams.

The first step in process design is to establishthe operating parameters for the major stages inthe process:

1. In the case of chemical reactions, the pres-sures, temperatures, concentrations, reactortype, and reactor size are defined or estimatedon the basis of the reaction kinetics andexperience gathered in existing plants

2. In the case of mixing (stirring, gas disper-sion, suspension) or separation (distillation,drying, precipitation, filtration) of sub-stances, the pressures, temperatures, con-centrations, and type and size of apparatusare defined or estimated on the basis ofestablished rules.

If information needed for setting the operat-ing parameters or designing reactors/apparatusis not known, it must be obtained in bench orpilot-plant tests or calculated approximately onthe basis of similar reactions or unit operations.

The unit operations used in process engineer-ing are described in [44–49].

Process Flow Diagram. The next step is toprepare a process flow diagram from the blockflow diagram. Standard symbols (e.g., defined inDIN 28 004) are used to represent reactors andother apparatus, including equipment for con-veyance and control of important streams.

In complex plants, it may be necessary first toprepare a synoptic flow diagram (Fig. 9) and thento draw up individual flow diagrams, giving theneeded detail for plant sections and auxiliaryoperations.

Determination of Final Process Data.When the desired effective operating time peryear has been set (e.g., 8000 h, corresponding to91 % availability), the design capacity of theplant (i.e., the mass throughput per unit time) isdefined. The next step is to compile the specifica-tions for all feedstocks, auxiliaries, catalysts,utilities, and end products, and to estimate whatintermediate products are to be expected. Thesespecifications include relevant physical andchemical properties as well as the battery-limitstates of all substances received and shipped.

On the basis of the process flow diagram, thepreliminary process parameters, and the above-mentioned specifications are used to preparematerial and energy balances for the processsteps and finally for the entire process. Thisobjective is not generally achieved in a singleset of computations. The experienced processengineer must use an iterative procedure to mod-ify the process flow diagram and/or the processparameters so that a closed material and energybalance is attained as simply as possible. Thefollowing must always be ensured:

1. Compliance with emission limits.2. Plant safety (i.e., adequate margins of safety

relative to critical operating conditions).3. Maintenance of product quality.4. Control of startup operations and of planned

and unplanned shutdowns. This includesspecification of components and media re-quired (e.g., heatup burners, cooling andpurge gases, and pressure-reducing valves).

These calculations must also take account oflong-term effects, such as increasing contamina-tion (resulting in a higher pressure drop and lessefficient heat transfer) or aging of catalysts(lower conversion, changes in temperature andconcentration profiles).

The calculations give mass and energy valuesfor all important points of the plant, preferablydownstream of each unit operation. The mass andenergy flow rates and the final process parametersare tabulated at the foot of each process flowdiagram and keyed to points in the plant(Fig. 10).

The preliminary sizes of the reactors andapparatus are now checked and, if necessary,modified in the light of the final processparameters.

If a plant is to be operated at reduced capacityfor short or long intervals, appropriate calcula-tions must be performed. If unacceptable operat-ing conditions or bottlenecks are found in certainplant sections, additional measures must be taken(e.g., supplementary heating, gas recycle, or thepartial shutdown of some unit operations). Asimilar treatment applies when occasional over-loading of the plant is expected.

Other factors are then determined, namely thequantities of substances that have to be available


Figure

9.

Ov

eral

lp

roce

ssfl

ow

dia

gra

m(o

lefi

np

lan

t)


for the initial charges and the storage capacities(including those outside the battery limits) need-ed for feedstocks, auxiliaries, intermediates, andend products.

Finally, a detailed process description is writ-ten. Assessments of known processes are avail-able on a subscription basis from Chem Systems

Inc. and SRI International. A survey of produc-tion processes for initial and intermediate organicproducts is given in [50].

Process Simulation. Process design calcu-lations for multistage, interconnected processeswith material and energy recycle soon become

Figure 10. Individual process flow diagram for a plant sectiona) Heat exchanger; b) Purification tower; c) Control valve; d) Block valve; e) Steam trap; f) Blind; g) Control loop (temperature,pressure, flow)


very complex. Computer tools enable designersto develop key concepts in a reasonable time andthus to optimize the process according to certaincriteria (investment cost, yield, energy economy,production costs). ‘‘Flow sheeting’’ programs arecomplicated computer programs that model unitoperations mathematically and allow them to beinterconnected. A plant can thus be representedas a network of unit operations with material andenergy streams and thus simulated [51], [52]. Thematerial and energy balances can be calculated asfunctions of the process parameters. An iterativeprocedure can be carried out to bring the balancesto equilibrium for individual and interconnectedunit operations.

Simulation programs are available for steady-state operation and dynamic conditions (e.g.,ASPEN PLUS, DESIGN II, PROCESS, HYSIM,and SPEED UP).

Design calculations for reactors and otherequipment (e.g., heat exchangers) can be per-formed with special-purpose design programs andprocess simulation packages. The program for afired tubular furnace (e.g., steam reformer) allowscalculation of process conditions as a function ofthe configuration and geometry of the tubes, bur-ners, and combustion chamber. An important func-tion of such programs is to simulate the equipmentwhen connected into systems and to identify andremedy bottlenecks (de-bottlenecking).

Process simulators have integrated substancedata bases that meet the needs of most applica-tions. Further data can be obtained from databases [53] and compilations of physical andchemical data [54–56]. Proprietary data and em-pirical factors (interactions, long-term effects)can also be input.

3.3.2. Optimization

The object of plant optimization is to obtain anoptimal economic result. This is a continualproblem during the operation of a plant, espe-cially if its capacity is diminished by aging orincreased by expansion, or if product earnings,costs, or expected profits change during its life-time. The parameters necessary for subsequentoptimization must, if possible, be established inthe design stage. They relate to process design,the plant concept, the selection of equipment,and the process control system.

The operating result is primarily determinedby product earnings, expected profit, and costs.Obviously, costs decrease with longer plant ser-vice life and higher availability. The feasibilitystudy should provide data about both of thesefactors.

Most chemical production facilities are oper-ated around the clock. Since fixed costs representa significant proportion of the operating costs(interest payments, personnel, energy supply,overheads), high availability is essential for anoptimal result and is often more important thanmaximal process optimization.

Single-train plants with many unit operationsin series are more susceptible to breakdowns thanplants in which the critical sections are multi-trained or have standby equipment. The draw-back of a larger capital investment must beweighed against the advantage of a higher ex-pected availability.

In established methods of risk analysis, theplant concept is systematically analyzed on thebasis of process flow diagrams, process descrip-tion, equipment lists, and operating experience(e.g., reliability and maintainability, RAM). Aninitially higher expenditure on equipment notonly results in better availability but also lowersrepair and maintenance costs.

Optimization of process engineering mustthen be investigated. The process design ob-jective of a unit operation or a plant can beachieved with various combinations of capitalcosts and variable production costs (feed-stocks, auxiliaries, utilities, energy consump-tion, disposal) as the following simplifiedexamples show:

1. In plants with high gas throughputs, the cross-sectional areas of piping, fittings, and reac-tors/apparatus determine the pressure drop inthe plant and thus the energy that must beexpended to transport the gaseous media.Large cross sections, with correspondinglyhigher capital costs, lead to lower energy costsand vice versa.

2. In heat exchangers, such as those used forwaste-heat recovery, the quantity of trans-ferred heat increases with increasing ex-change area (¼ higher capital costs) and in-creasing flow velocities (¼ higher pressuredrop ¼ higher energy consumption) and viceversa.


In each case, there is an optimum for giveneconomic parameters. The second example ismore complicated, because not only must thecost optimum for a given quantity of heat bedetermined but also the optimal quantity of heatto be exchanged. It must further be taken intoconsideration that the cost of waste-heat transferto the environment decreases when more heat isrecovered.

Similar examples could be cited for the opti-mization of conversions, the optimization of theproduct mix when products are coupled, and thesimultaneous minimization of byproducts andresidues and of their reprocessing or disposal.

The examples lead to the following conclu-sions: identical plants do not have a uniqueoptimum; instead, they have a variety of optimathat depend on the crucial technical and econo-mic constraints of a given site location. Optimaldesign of the plant is based on economic para-meters employed in the design phase. Subsequentdeviations may partly offset one another or mayaccumulate in the result.

The objective is thus to assign cost factors tothe functional dependences of the process designor, in mathematical terms, to express the depen-dence of the costs on the engineering variables inthe form of a cost function. Limiting parametersalways have to be introduced, e.g., emissions,plant reliability, product quality, and safety fac-tors for equipment and material (to ensure maxi-mum lifetime and on-line time). Optimizationcan be solved by a suitable method (linear andnonlinear optimization, mixed-integer program-ming, gradient and search procedures).

The large number of variables in a plantdesign and the high degree of interaction in plantswith many process loops mean that a facilitycannot be completely optimized during the de-sign phase. The dimensions of such a programexceed any reasonable and justifiable computereffort.

It is useful to begin by performing an eco-nomic – technical analysis of the process basedon the ‘‘standard design’’ (not yet optimized).This analysis reveals the process stages in whichsignificant fractions of the costs are incurred,consumed, or transformed, and expresses themas a proportion of the total costs. As a rule, a fewkey points dominate the economics of the entireplant. Optimization work can thus be facilitatedright from the start.

If individual cost items in subsequent operat-ing periods are expected to deviate significantlyfrom the values chosen initially, new calculationscan be made for the few key points, takingmaximum and minimum values (sensitivityanalysis).

A practical application of this method is thecomparison of designs ‘‘on an evaluated basis.’’The costs for the necessary capital (often withallowance for the expected return on investmentand tax considerations) and for capital goods arerepresented in a formula. The actual require-ments for capital and capital goods are substitut-ed into the formula. The lowest resultant valueidentifies the best concept for the selected pre-mises. Details of cost structure and financingneed not be known.

Optimization of Individual Tasks. For thecalculation of various reactor types, see !Mathematical Modeling and ! Model Reactorsand Their Design Equations.

Enthalpy – temperature (H/T ) diagrams andexergy analysis (formerly also availability anal-ysis) are being increasingly used in conjunctionwith simulation programs to optimize the energyeconomy of the plant [57]. This is especiallyworthwhile for processes with high heat turnoveror high compression ratios. Apparatus costs mustbe determined separately.

The design of heat-exchanger networks isbased on analysis of the heat fluxes in the networkas a whole. One representative of such methods isthe Linnhoff ‘‘pinch’’ method, see ! PinchTechnology. This technique uses the H/T dia-gram with cumulative curves for the quantities ofheat dissipated and absorbed in various sectionsof the plant at defined temperatures. The methodcan be applied to utility systems and to theintegration of thermal engines [58]. Software isavailable for the design of heat-exchanger net-works by this method (e.g., HEXTRAN andADVENT). An alternative method for heat-ex-changer/utility networks is based on themixed-integer method [59].

Synthesis-gas processes offer an example ofintegrated loops. These reactions are mostlyexothermic, and an attempt is made to transferthe excess heat of reaction to steam instead ofcooling water. Use of waste heat from gasproduction to supply the heat required for gaspurification and converting processes has led to


a variety of integrated loops with significantreductions in operating costs, for example inammonia and methanol synthesis and in theproduction of nitric, sulfuric, phthalic, andmaleic acids.

Another optimization possibility is the use ofheat pumps. The mechanical compression ofvapors and their condensation at higher pressureoffers interesting solutions with relatively lowinvestment costs, for example in the distillativeseparation of components with similar boilingpoints (e.g., such as ethylene – ethane and pro-pene – propane).

The operability and economics of integratedloops must be checked during process design.This can be done by using LINNHOFF’s method ofheat integration analysis [60], [61].

Process Synthesis. The development of op-timal combinations of unit operations is an itera-tive process that is now carried out with the aid ofsimulation programs. An advanced program per-forms computer-aided process synthesis by au-tomatically generating design variants and se-lecting the best ones under consideration ofuncertain data, i.e., when material properties,thermodynamic data, and kinetics of partial pro-cesses are incomplete. Results can be applied tosome practical problems [62–64] especially toheat-exchanger networks (HENs) and utilitysystems.

The design of separation processes is muchmore difficult because of the great number ofspecies present. Process synthesis has thereforenot reached a comparable level. A survey of thedesign of column cascades appears in [65].

Optimization has to be customized for everyapplication, key points can be identified only byeconomic and technical analysis of a process.The boundaries between ‘‘routine’’ optimizationduring process design and a special, supplemen-tal optimization study are not clearcut. Thepractical operability of a plant should never beignored. Overly complicated circuits, highlycomplex control systems, dewpoints and corro-sion limits that are too close together, and in-creased maintenance costs can all wipe out cal-culated cost savings.

Continuous optimization is needed through-out the service life of a plant. Digital processmonitoring and control systems allow appropri-ate data acquisition, storage, and archiving.

Process data processing systems print data inthe form of diagrams, graphs, and tables. Theyare an indispensable aid in the commissioningand optimal operation of plants. Process-basedsimulation programs allow on-line and off-linebalancing and prompt detection of abnormaloccurrences.

3.3.3. Safety Aspects and EnvironmentalControl

In the following section the essential elements ofsafety and environmental control are treated –relevant to the design and construction of achemical plant, using Germany as an example.The laws and decrees cited are only valid inGermany, however, there are similar laws inother countries, e.g., those issued by the EPAand OSHA in the United States and the ‘‘Stoom-wezen’’ in The Netherlands.

The materials present in a chemical plant,their processing, and processing equipment con-stitute a source of risk to persons and property inthe plant area and its surroundings. The level ofrisk depends on the nature, extent, and probabili-ty of occurrence of injury or damage [66]. Safetyengineering institutes measures that reduce (lim-it) the risk to a degree acceptable to the publicrequire that:

1. Potential hazards must be identified2. Effective safety standards against these ha-

zards must be established3. The standards must be transformed to engi-

neering and/or management safety practices4. It must be proved that the safety level meets

requirements5. The effectiveness of the adopted measures

must be evaluated and improved [67]

Safety-related functions are the responsibilityof governmental supervisors, the plant operator,and the engineering contractor. In approving theplant, the regulatory authorities not only ratifythe safety objectives but also evaluate the scopeand quality of the safety measures. The operatoris responsible for correct execution of thesemeasures. The design and construction firmsmust assist the operator in complying with thestandards [68–70].


3.3.3.1. Protection Against Emissions

The following important environmental protec-tion goals are necessary for the approval of a newplant and are therefore the concern of authorityengineering:

Landscape and Surroundings. The erec-tion of a plant on a site not expressly intendedfor industrial use can run into difficulties [71]. Itis also necessary to clarify in advance whateffects the plant will have on nearby residentialareas and what levels of emissions and noise areacceptable in industrial areas [72–75].

The appearance of the plant must be appro-priate for the surroundings. This factor is gov-erned by restrictions on building height, design,materials, color, the construction of visual bar-riers, and landscape plantings.

Air Pollution. Pollution control begins withthe classification of hazardous substances andprevention or minimization of emissions to theatmosphere. Release under normal operatingconditions is prevented by using appropriatedesign and process conditions (e.g., gas collec-tion and recovery systems, use of low-pollutingburners, catalytic gas purification, use of high-quality flange connections and seals) [76–78].

Safe operation of a chemical plant must beensured to prevent or minimize the hazard to thesurroundings. Possible sources of danger (acci-dents) include release of large amounts of haz-ardous substances (gases, liquids, solids), fire inthe plants, and explosions [72].

Safety aspects must be taken into consider-ation in process design, plant layout, and equip-ment selection; in the construction, operation,and maintenance of the plant; and in the trainingof plant personnel [69].

The ‘‘hazard and operability study’’ (HAZOP)is often used and can reveal weak points in plantequipment and operation while the facility is stillunder design. This method of risk analysis hasbeen proven in years of use [79–81].

Wastewater. The wastewater generated in aplant is collected and treated in systems classifiedaccording to water quality (e.g., severely con-taminated, moderately contaminated, uncontam-inated, rain water). If the systems are properlydesigned, the treated wastewater can be released

into a system approved by the local authority[82], [83].

Wastewater produced in case of fire (fire fight-ing water) must be collected in a retention basinwhose capacity is usually sufficient to hold thewater used in 1 h against the design fire- case [84].

Soil. Soil protection is afforded by sealingall plant areas that might be contaminated byhazardous liquids or solids under normal operat-ing conditions or in an accident [85].

Waste. ‘‘Waste’’ denotes all those sub-stances and parts that cannot be recycled to theproduction process or otherwise reused.

As early as the process selection step, specialattention must be paid to waste prevention be-cause waste is difficult to dispose of. In largechemical complexes, wastes from one processcan often be used as feedstocks in other proces-ses. This alternative should be investigated close-ly in feasibility studies performed at a very earlystage of the project [86–88].

3.3.3.2. Noise Control

The primary objectives of noise- control designare in compliance with contractual and legalprovisions while ensuring that the plant is easyto maintain and runs economically. Noise can becontrolled at the source by selecting low-noiseproducts and processes. Low-noise equipmentoften has the welcome side effect that it offerslow energy consumption and longer service life.

Basic concepts and research in acoustics arediscussed as examples in [89–92].

Regulations. Noise- control regulations areintended to protect the surroundings and the plantpersonnel.

Protection of the Surroundings. The basisfor immission noise limits in Germany is theBundes-Immissionsschutzgesetz (Federal Im-mission Control Act) and the TA L€arm (Engi-neering Directive on Noise Control) contained init [93]. The directive lays down permissibleimmission noise levels as a function of land use(Table 2). The site of measurement varies; as arule, it is 0.5 m in front of an open window of theresidence. Regulatory practice has been to treatthe permissible levels cumulatively: if several


plants emit to one receiver, the maximum levelmust be distributed among all the emitters. Fur-thermore, if a plant is expanded, its permissiblenoise-level contribution must not be exceeded.

This approach ensures that the permissible totalnoise level in the residential area is not exceeded.On the other hand, new plant sections are onlyapproved if they meet strict noise standards.

Protection of Plant Personnel. The basis fornoise regulations at the workplace in Germanycomprises the Arbeitsst€atten Verordnung (Work-place Regulation) [94] and the relevant sectionsof the Unfallverh€utungsgesetz L€arm (AccidentPrevention Code) [95] which contain referencesto DIN standards and VDI guidelines. Theseregulations set a maximum personal noise levelof 85 dB(A) for an 8-h shift and recommend theuse of personal hearing protection above 85 dB(A). Personal hearing protection must be worn atlevels over 90 dB(A).

The most important regulations for plant de-sign follow:

Measurement of noise at DIN 45 635 part 1,

machines and following parts

Average level and assessed level temporal

fluctuating sound processes

DIN 45 641

Sound propagation in the open VDI 2714

Assessment of working noise in the

neighborhood

VDI 2058 sheet 1

at workplace regarding danger to hearing VDI 2058 sheet 2

with regard to various occupations VDI 2058 sheet 3

Sound projection from industrial construction VDI 2571

Noise from piping VDI 3733

Noise abatement for ventilation and air

conditioning plants

VDI 2081

Personal soundproofing VDI 2560

Soundproofing by mufflers VDI 2567

Soundproofing by shielding VDI 2720

sheets 1 þ 2

Soundproofing by metal cladding VDI 2711

Design. The engineering firm must guaran-tee compliance with noise regulations at theworkplace and in residential areas. The contractshould also stipulate the type of noise measure-ment and the operating conditions at the time ofmeasurement.

Planning for noise control begins in the pre-liminary design phase and continues throughbasic and detail engineering. The engineer mustcarry out the following activities:

1. Calculate the permissible sound level for theentire plant on the basis of the maximumlevel allowed in the residential area andavailable studies on the workplace noise-level limits.

2. List noise-producing components and estab-lish their permissible sound levels. Noise-protection practices are dictated by practicaland economic considerations.

3. Prepare noise specifications (including per-missible sound levels) as part of the bidspecifications for all noise-emittingequipment.

4. Check the bids (e.g., for machinery, controlvalves) to ensure that noise requirements aresatisfied.

5. Compile specifications for silencers, hoods,and insulation; check bids and orders forthese items.

6. Compile noise specifications for thebuilding.

7. After the design is complete, write a designreport on residential and workplace noiselevels.

8. Inspect installation of equipment at the con-struction site.

9. Measure noise levels of noise-generatingequipment at the workshop where it is man-ufactured, and also later when it is installedin the plant and the plant is on stream.

10. Prepare a final report.

Manufacturers of noise-generating equipmenthave many ways of reducing noise. Examplesfollow:

Electric motors: Reduction of cooling air re-quirement, use of low-noise cooling fans, useof improved insulation.

Control valves: Division of large-expansioncross sections into smaller areas (perforated

Table 2. Permissible noise immission levels

Type of builtup area Standard value, dB(A)

Day Night

Exclusively industrial utilization 70 70

Mainly industrial utilization 65 50

Equal housing and industrial

utilization

60 45

Mainly housing areas 55 40

Exclusively housing, health

resorts, and hospitals

50 35


cage), division of pressure release into multi-ple stages, optimized flow control.

Air coolers and small cooling towers: Reductionof rotor peripheral velocity, modification ofblade profile, increase in number of blades,use of low-noise gears.

Pumps: Optimization of impeller design, avoid-ance of cavitating conditions, reduction ofimpeller peripheral velocity (below 45 m/s).

Steam generators and process furnaces: Low-noise, forced-air burners; use of ceramic-fiberlinings on interior walls.

Compressors: Frequency- controlled drives,low-noise oil systems, direct drives (no gears),low-noise surge-limit control.

Important secondary practices of noise abate-ment include:

1. Soundproof enclosures2. Soundproof hoods and barriers3. Soundproofing insulation on piping, ducts,

and machine housings4. Silencers in the form of absorbers, resonators,

or combinations of both types

In most chemical plants, on-battery soundpressure levels can be held to 85 dB(A) by meansof careful design. Large compressor sections arean exception; levels up to 100 dB(A) can beexpected and such areas must be designated ashigh-noise areas.

Investment costs for noise control normallyrange from 0.5 to 3 % of total plant material andinstallation costs. These percentages are ex-ceeded if residential restrictions make it neces-sary to enclose the entire plant.

Plant safety and reliability must not be im-paired by noise- control measures. Low-noisemachines must therefore be preferred over loudmachines with soundproof enclosures. If hoodsor enclosures cannot be avoided, accessible areasinside noise enclosures on gas-handling devicesmust be provided with adequate ventilation, gasalarms, and possibly fire fighting systems. Noise-control barriers and shielding must not blockescape routes.

3.3.3.3. Occupational Safety and Health

The principal requirement in occupational safetyand health is that physiological and psychologi-

cal burdens on the employees caused by workingand other conditions must be limited to a gener-ally accepted level. Measures must also be takento prevent or control risks in case of an accident[70].

The occupational safety and health authoritieshave defined general conditions for ventilation,lighting, and ambient temperatures at work-places, protection against weather and noise, andthe safe use of traffic routes inside the plant.Accident insurance regulations are especiallyimportant for plant layout and process design ofchemical plants. These rules concern: harzardousoperations, work involving hazardous substances[77], [78], use of special auxiliary equipment,and ergonomic design of the workplace [96].Suitably equipped ‘‘social’’ facilities such as restand changing rooms, washrooms, toilets, andmedical stations must also be included in thedesign [94].

Warning of unavoidable dangers must begiven, and appropriate protective measuresmust be instituted (e.g., signs marking fire orexplosion hazard zones and appropriate safe-guards against ignition). Escape routes andprotected areas with emergency lighting, fixedpersonal protection facilities (emergencyshowers), and alarm systems must be provided[94], [97].

Appropriate layout of buildings and apparatusor enclosures around particularly dangerousequipment help to minimize injuries and damage[96].

Effective fire fighting measures include shortaccess routes as well as fixed or mobile fire-extinguishing equipment with an assured supplyof extinguishing media and an adequate actionradius.

Occupational safety and health measures alsoapply during construction of the plant. Theyrelate to the structural design and size of theplant and the construction methods. As much aspossible of the equipment used in subsequentnormal operation of the plant must be availableduring commissioning for protection of theworkers [96].

3.3.3.4. Plant Availability

Capacity and profitability calculations for achemical plant are normally based on 8000 h/aon-stream (corresponding to roughly 330 d/a).


Shutdowns are generally planned at intervalsof one or two years to allow cleaning of heatexchangers, apparatus, and piping; charging ofnew catalysts and chemicals; replacement ofworn mechanical parts; and prescribed inspec-tions by regulatory authorities.

Unplanned shutdowns are usually caused bymechanical defects or automatic emergencyshutdowns when operating parameters are out-side the limits for normal plant operation.

Important items of equipment are duplicated(standby equipment) to ensure continuous oper-ation between scheduled shutdowns. This isstandard practice for continuously operatedpumps and reciprocating compressors. Standbyturbine compressors are not necessary because oftheir longer maintenance intervals. In auxiliarysystems (e.g., the lubrication system), however,the necessary reliability is provided by installingstandby pumps and filters.

If operating conditions make regeneration orcleaning necessary during production, standbyequipment is again used (e.g., fixed-bed reactors,molecular-sieve adsorbers, dryers, and filters).

Piping (as used to convey suspended solids orpowders) may be susceptible to plugging. Instal-lation of standby piping or flushing connectionsmay be desirable.

Measures to ensure reliable plant operationduring power outages must be considered at anearly stage (emergency planning).

The drives of important process equipment(e.g., cooling-water pumps, instrument-air com-pressors, boiler feedwater pumps) are usuallydual (electric motor plus steam turbine).

Emergency power-generating units are need-ed to maintain safety-relevant drive and controlfunctions (including emergency lighting, com-munication facilities, and computer-aided pro-cess control systems) during power outages. Inthe case of particularly critical equipment, aseparate power source (e.g., battery, instru-ment-air reservoir, nitrogen reservoir) must beprovided to bridge the startup time of the emer-gency generator.

Control functions and process control systemsplay a vital role in reliability and safety. Relevantprocess parameters and the points where they areto be measured must be defined during processdesign so that indicators and alarms will warn theoperating personnel promptly whenever operat-ing conditions become abnormal.

Allowance must also be made for operatorerror so that consequential damage (e.g., over-heating or pressure buildup in uncontrolledexothermic reactions) can be avoided. Auto-matic emergency-shutdown devices are pro-vided for such cases. They are often redun-dantly included in both the measurement andshutdown systems. They must be regularlyinspected by the plant operator or the regula-tory authorities.

3.3.3.5. Authority Engineering

The construction and operation of chemicalplants are affected by many legislative provi-sions and regulations that are concerned withenvironmental protection and plant safety [68].These requirements have major consequencesfor plant design and construction. It is nolonger sufficient to comply with all laws,standards, and specifications applicable to agiven plant at a given site. Instead, a formalapproval process, usually with public partici-pation, must be gone through in the designphase. Only then can construction of the plantbegin [98], [99].

The length of the approval process depends onthe type of plant, the environmental sensitivity ofthe plant site, and the nature of the approvalprocedure. Another important point is whetherthe project involves expansion of an existingfacility or an entirely new ‘‘grass-roots’’ planton a previously nonindustrial site.

The time taken for an application for a con-struction permit to be approved is usually sixmonths to a year, but sometimes longer. This ispreceded by a lead time of about a year, duringwhich the conditions for the plant are discussedand preliminary talks are held with the regulatoryauthorities. The total span from the investmentdecision to groundbreaking is therefore about 1.5years. This is a substantial fraction of a totalproject duration of 2 – 3 years.

The granting of construction and operationalpermits requires close collaboration between theplant owner, the engineering firm, and the au-thorities (Fig. 11). All activities aimed at devis-ing an approved plant concept are grouped underthe heading ‘‘authority engineering’’ and areusually the responsibility of the engineering firm.Typical activities carried out during the designphase are listed below.


Feasibility Study/Preliminary Design.The feasibility study and preliminary designinclude technical and economic optimization ofthe process with minimization of environmental-ly harmful factors. The following parameters areestablished

1. Nature and quantities of substances present2. Waste and residues3. Wastewater4. Emission of air pollutants5. Type and design of plant equipment6. Nature (open or closed) of processing

systems7. Safety and reliability standards [77], [78]

As soon as site selection is complete, thefollowing questions must be answered:

1. Which authorities are responsible for approv-ing the construction and operation of theplant?

2. Which laws must be observed?

3. Which regulations, especially local ones,must be complied with?

4. What is the public opinion at the intendedlocation?

5. Has any nearby project gone through appro-val proceedings recently? If so, with whatresult? How much time did the proceedingstake?

6. Will special restrictions over and above nor-mal legislation and regulations apply to thesite? [75], [100], [101].

In order to clarify these points, informal contactwith the regulatory authorities should be initiatedas soon as the initial concept of the plant is set.

Process Design/Basic Engineering. Re-sults obtained during the preliminary phase areused for process design/basic engineering (e.g.,for planning off-gas collection and combustionsystems and wastewater systems). A preliminarysafety analysis may be useful to identify potentialrisks (e.g., threat to the environment due to

Figure 11. Principle flow scheme of German authority approvals procedure


release of substances, or risk to the plant due tohazards in the vicinity). This kind of analysis iscalled an environmental impact study [73]. Theresults of such an analysis may influence the plantlayout [72], [75].

Detail Engineering, Construction, andCommissioning. Many authority engineeringactivities take place in the detail engineeringphase. They include:

1. Preparation of project documentation2. Preparation of a detailed safety analysis3. Engineering escort duty during approval

proceedings4. Implementation of design changes required

during approval proceedings5. Management of partial approval procedures

that take place in parallel with the mainapproval procedure

6. Selection of experts and technical cooperationwith them to clarify detail questions raisedduring approval proceedings

The activities of engineering and authorityengineering must be well coordinated if theprogress of work at the construction site is notto be held back.

An important point for the success of aproject is that the engineering activities con-cerned with early civil work activities should betaken care of early. This is especially importantfor the plot plan and buildings; escape, emer-gency and access routes; and fire fightingconcept.

The authorities grant partial approvals (e.g.,for civil work, erection, and commissioning ofplant sections) so that progress is not unneces-sarily delayed. They also check that relevantregulations and provisions are observed duringconstruction and installation. When constructionis complete the entire plant is examined by theauthorities. Deficiencies must usually be reme-died immediately. The authorities only grantpermission for commissioning when the accep-tance report has been made.

During commissioning proof of compliancewith approved levels of emissions, wastewatervalues, etc. must be submitted. Measurementsare difficult to perform and time consuming. Ifimprovements to the plant are required at thisstage, they may be very expensive.

3.4. Basic Engineering

The focus has so far been on process design(process flow diagrams and parameters such asoperating temperatures and pressures and flowrates). Now the geometric dimensions of indi-vidual equipment items, the design temperaturesand pressures, the materials of construction, andthe layout of the entire plant must be established.(The main elements of basic engineering docu-mentation are described in Section 5.1).

3.4.1. Equipment Specification from theProcess Engineering Standpoint

Equipment dimensions and capacities are dictatedby the process. Data from the process flow sheetcan be used for the sizing of process equipment,machinery, piping, etc. Examples of data that canbe derived in this way are the diameter, number oftrays, and tray spacing for distillation towers.These design data are entered in process engi-neering data sheets (Fig. 12) that contain allrelevant specifications for the specialist engineer.For example, the data sheet for process equipmentincludes a schematic drawing with overall dimen-sions, operating and design pressures and tem-peratures, number and nominal diameters of noz-zles and manholes, material of construction, cor-rosion allowance, insulation thickness, etc.: inshort, the information that the equipment designengineer needs in order to perform strength cal-culations and prepare a more detailed drawing.For pumps, the data sheet must show normal,maximum, and minimum flow rates, inlet andoutlet pressures, operating temperature, materialof construction, type of medium, and physicalproperties of the medium. On the basis of thisinformation the mechanical engineer can selectthe optimal pump with the best efficiency.

Specifications are prepared similarly for con-trol systems, safety valves, and all other items ofplant equipment. The nominal diameters of pip-ing are calculated for the specified flow rates,physical properties of the streams, and economi-cally acceptable pressure drops.

3.4.2. Materials of Construction

See also ! Construction Materials in ChemicalIndustry.


Figure 12. Data sheet with process information for a deethanizer


Materials of construction in chemical plantsmust be able to withstand mechanical, chemical,and thermal stresses and must not be attacked bythe medium with which they come in contact.Two criteria must be met:

1. Materials must be approved for use in pres-sure-bearing parts under the pertinent regula-tions, i.e., their guaranteed values, processing,and permissible service conditions are definedand can be reproduced at any time.

2. Materials must be suitable from the corrosionstandpoint. Their behavior and propertiesshould show little or no change under theaction of the media with which they come incontact.

Material selection should be solved by closecollaboration between the materials specialist,the designer, and the process engineer or chemist[102–109]. The materials most commonly em-ployed in process engineering are unalloyed,low-alloy, and high-alloy steels. Both solid steeland cladded steel fabricated by rolling, weldoverlaying, or explosion bonding are used invessels, towers, heat exchangers, storage tanks,piping, and other equipment.

Stresses. Materials of construction mustwithstand temperatures from ca. � 180 to1100 �C and pressures from vacuum to severalhundred bar.

The selection of a material is dictated by threecriteria: mechanical stress, thermal stress, andchemical attack. Seldom do these three types ofstresses occur singly; the usual case, in which twoor all three are present at once, governs materialselection.

The most important ferrous materials used inplant construction, are the following steels:

Predominantly mechanical stress:Structural steelsFine-grained structural steelsQuenched and tempered steelsSteels for low-temperature service

Coexisting mechanical and thermal stresses:Steels for high-temperature serviceHigh-strength alloy steels for high-tempera-ture serviceHeat-resisting steels

Steels for hydrogen service at elevated tem-perature and pressure

Chemical attack together with thermal and me-chanical stresses:Ferritic chromium alloy steelsAustenitic chromium – nickel steelsFerritic/austenitic steels (duplex steels)

The selection of steels for predominantlymechanical stress depends on strength, tough-ness, and weldability. States of mechanical stressin individual parts are often incompletely known.Design is therefore based on approximate rulesderived from simple loading modes (tension,crushing, bending). The time dependence of load(e.g., static or cyclic) must also be considered.

The operating pressure, operating tempera-ture, and number of load cycles are crucial forstrength calculations of apparatus and piping.The temperatures determine the strength (yieldpoint). The use of fine-grained structural steels,with higher yield points than normal carbonsteels allows design of equipment with thinnerwalls and thus results in significant savings inweight and welding work.

Equipment must be sized so that it does notfail by ductile fracture, brittle fracture, fatigue, orcreep (Table 3).

The choice of steels for chemical service, orwhere chemical attack occurs together with ther-mal and mechanical loads, is difficult becauseseveral types of corrosion are possible, eachresulting in a different type of failure. The prob-lem of material selection in this case is often verycomplicated because corrosion is due to multi-component systems.

Alloys. Corrosion-resistant alloy systemshave been developed which form a passive layerthat affords protection against corrosion. Suchalloys must remain stable during subsequenttreatment (e.g., welding) so that phase precipita-tion does not affect the passivity of the material.

The most commonly used alloy systems forchemical plant construction are those based oniron, nickel, and copper. Figure 13 shows thesethree groups schematically, with the maximumconcentrations of the alloying elements singly orin combination. A great number of alloys with thedesired properties can be produced with thesesystems.


Other metals and alloys used in plant con-struction are aluminum, titanium, zirconium, andtantalum. See also ! Construction Materials inChemical Industry.

Corrosion. For a detailed description ofcorrosion, see ! Corrosion, 1. Electrochemical,! Corrosion, 2. High-Temperature. Corrosionphenomena (e.g., selective corrosion, diffusion,crevice corrosion, and pitting) must be givenspecial attention but are not amenable to designcalculations.

The most frequent form, general corrosion,can be dealt with by appropriate corrosion al-lowances of ca. 1 – 5 mm. The corroded mate-rial must not, however, interfere with the processor affect the product (discoloration or flavorchanges in the pharmaceutical, beverage, andfood industries).

Charts, tables, empirical values, and proces-sing guidelines are available for material selec-tion according to corrosion criteria. Carbonsteel, for example, is attacked only slightly bywater, but severely by water in the presence ofair. Pitting occurs if air-containing water isheated, or if oxygen is present in steam andcondensate piping; this often rules out the use ofcarbon steel. Although stainless steels resistmany media, they also suffer pitting or stresscorrosion cracking in the presence of halogencompounds.

Material selection has to take into accountboth the chemical nature and the flow of themedium. Rapid motion of a liquid along a pipewall can accelerate corrosion, whereas a protec-tive film often forms on the surface when thevelocity is low.

Table 3. Nature of failure of materials

Nature of fault Cause Measure

Ductile fracture unacceptably high loads calculation with elasticity limit or safety correction values

Brittle fracture stress also below the permissible elasticity

limit by influences from

calculation of the brittle fracture safety with fracture

mechanical values on the basis of

1) multiaxial state of stresses the combined effect of material faults and

2) thermal stress stresses

3) state of material highly dependent on

4) state of defect 1) material production

5) geometry of component 2) quality of manufacture

3) fault finding and

4) fault description with nondestructive testing

Fatigue introduction of crack and crack propagation

by alternating stress

calculation with conventional strength values for

alternating stress (e.g., fatigue limit) taking into account

all stresses as with the danger of brittle fracture

fatigue crack propagation at existing fault sites consideration of mechanical fracture principles and

their mathematical utilization

Creep, time interval time-dependent deformations and fractures at high 1) calculation with creep strength

temperature and stresses below the 2) calculation of time yield limit

elasticity limit 3) crack propagation by existing defects

Figure 13. Alloy systems most commonly used in chemicalplant construction


Intergranular stress corrosion cracking maybe caused, for example, by alkaline solutionsabove 100 �C under pressure in welded vesselsof unalloyed steels.

Transgranular stress corrosion cracking canoccur in equipment made of austenitic Cr – Nisteels, while crevice corrosion results from im-proper fastening of tubes in tube sheets; thesetypes of corrosion are both accelerated by vibra-tions (corrosion fatigue).

Electrolytic corrosion can take place whenmetals widely separated in the electrochemicalseries (e.g., copper, iron, and aluminum) are notinsulated from one another in the same piece ofequipment apparatus and come in contact withconductive liquids.

Other corrosion-related problems are hydro-gen embrittlement, embrittlement at low temper-ature, and high-temperature corrosion.

The same degree of corrosion protection canoften be obtained with several materials. In suchcases, price, service life, and profitability must bebalanced [110].

Costs can be saved by applying more noblematerials as a coating or cladding. Electro-plated coatings cannot be employed in chemi-cal plant apparatus because they do not offerlong-term protection. Claddings of nonferrousmetals, their alloys, or austenitic steels can beused if the contact between the corrosivestream and the load-bearing steel shell of anapparatus can be prevented by appropriatedesign.

In simpler cases, plastic coatings can be em-ployed in place of cladding. Stoving finishes(duroplastic) have proved suitable for contami-nated cooling water and weak acids in heatexchangers (service up to 240 �C). Polytetra-fluoroethylene coatings are highly resistant toacidic and alkaline substances (up to 300 �C).Rubber and hard rubber, respectively, are effec-tive against weak acids and salt solutions up to ca.þ 100 �C. It should be kept in mind that plasticcoatings tend to swell and unbond in the presenceof organic substances, especially at elevatedtemperature.

3.4.3. Plant Layout

The layout becomes a high-priority item duringbasic engineering [111].

For large plants, the planner begins with1: 500 layout sketches that merely show thespace required for individual units. Such prelim-inary layouts are used to determine the mostexpedient arrangement with possible transferpoints at battery limits for material and energystreams. Conventional layout techniques employadhesive films and overlaying of transparentsketches; PC and CAD programs are also findinguse.

The layout should include approximate dataon the positions and sizes of storage areas for rawmaterials, intermediates, and end products, aswell as pipe bridges, roads, underground piping,and sewerage. Control room and electrical sub-stations, compressor buildings and service facil-ities, and road and rail connections are shownwith their overall dimensions. The accessibilityof plant equipment for repair and maintenance,construction aspects, safety, and inspection mustbe considered from the very start. The conse-quences of later expansion must also be takeninto account.

If the existing information is adequate, thelayout should be drawn to scale. The layout andthe process flow diagram then permit assessmentof the production sequence, mass transport, andstorage (Fig. 14).

On the basis of the layout and specifications,buildings should be inserted next as needed(ground plan, number of floors, height betweenfloors).

Layout Model. The layout can also be madeinto a block model (Fig. 15). Layout models haveproved especially useful for complicated instal-lations such as refineries and petrochemicalplants. They convey a general impression of thefinal appearance of the plant, even at an earlystage. Approximate 1 : 100 or 1 : 50 models ofequipment items are made of foamed polystyreneor a similar material and can then be movedaround to establish suitable positions andspacings.

The layout model includes steel structuresbut does not cover the details of pipe runs. Itmainly serves as a basis for discussion, permit-ting a number of fundamental questions to beclarified.

At this stage of basic design (at the latest),the design engineer is thus able to decide whichparts of the plant will be outdoor or enclosedfacilities, and whether it will be on one or more


levels. A process plant should be outdoorsunless there are pressing reasons to enclose it.This allows substantial savings in constructioncosts; machinery and equipment remain moreaccessible; and the danger of fire and explosionis reduced for processes involving flammablematerials. The outdoor setting, however, entailsmore expense for shelter against weather, heat,and cold.

For some types of plant equipment, the layoutcriteria are nearly always the same. For example,turbocompressors, reciprocating compressorsand their drives; coolers and oil circulation linesshould be located in sheds or compressor build-

ings. Pumps, in contrast, are usually placed out-doors; they are installed in pump houses only ifthis is necessary on environmental grounds (e.g.,for noise protection).

Production facilities that are sensitive to am-bient conditions (e.g., film and fiber production,paper mills, pharmaceutical plants, catalystplants, packaging facilities) must be set up insidebuildings. Raw materials and products that aresensitive to moisture and sunlight must be storedin covered areas or enclosed buildings.

In contrast to the solidly constructed buildingsrequired in Europe, buildings in tropical regionscan be lightly constructed. Sheds open on two

Figure 14. Plant layout plana) Steam generation; b) Process steam generation and fuel oil system; c) Oil wash with dispersed oil separator; d) Propene –propane separation; e) Debutanizer; f ) Depropanizer; g) Deethanizer; h) Condensate and slop system; i) Hydrogenmethanization; j) Hydrogenation; k) Propene refrigeration; l) Ethylene refrigeration; m) Charge gas compressor; n) Causticwash; o) Water wash with gasoline stripper; p) Cracking furnaces; q) Substation, transformer station; r) Control room;s) Social facilities; t) Ethylene – ethane separation; u) Charge gas dryer; v) Acetylene conversion; w) Demethanizer;x) Cold box; y) Compressor house; z) Pumps, compressors


sides, affording protection against wind and rainonly, may be adequate if the process does not callfor climate control.

3.4.4. Preliminary Piping andInstrumentation Diagram

A piping and instrumentation diagram, based onthe process flow diagram, is needed for moreaccurate calculations at the preliminary designstage. For the basic engineering package it shouldcontain the following information:

1. All equipment and machinery, drives, pipingor transport routes, and fittings (includinginstalled spares)

2. Nominal diameter, pressure, material of con-struction, and design information of piping

3. Field instruments, control devices, and con-nections between them

4. Special fittings required for process controland safety, e.g., check valves, safety valves,level gauges, condensate drain lines

5. Significant dimensions of equipment andmachinery

6. Essential data on materials of construction

3.5. Calculation of Plant Costs

Once the engineering documents for the calcula-tions at the requisite accuracy are available, plantcosts can be determined. It is useful to employ ascheme as shown in Table 4 for this. A ‘‘stan-dard’’ scheme has been proposed by ARIES andNEWTON [112] and other authors. The calculationis subdivided into three groups of items: equip-ment, bulk materials, and indirect costs; each hasto be calculated differently.

The equipment group includes all itemizedplant equipment such as towers, reactors, andheat exchangers, vessels and machinery that arecalculated ex factory without packaging. Theseitems are normally specified individually in en-gineering design allowing a rapid, detailed, pre-liminary calculation to be made.

The bulk materials group covers items such aspipes, control systems, electrical equipment and

Figure 15. Layout model (hydrocracker complex), courtesy of Lurgi AG


materials, insulation, and paint. Exact determi-nation of these costs is expensive and time con-suming and can be done only on the basis ofdetailed material takeoffs (MTOs). This groupalso takes in civil work, structural steel anderection work.

Other Costs include engineering, procure-ment, construction supervision, commissioning,travel costs; price inflation during the construc-tion period; insurance, duties, and contingencies.These items can be only calculated for the project

as a whole and cannot be determined until theequipment and bulk materials costs are known.

3.5.2. Equipment

Because most pieces of equipment are ‘‘tailor-made,’’ manufacturers’ price lists are not oftenavailable for cost calculations. The best way toget accurate prices is to submit enquiries to themanufacturers. This can be done on the basis ofthe design specifications, but applicable stan-dards (e.g., DIN or ASA), design specifications,and acceptance conditions (e.g., AD-Merkblattdocuments, ASME Code, TUV, Lloyd’s) mustbe indicated. Such inquiries are, however, time-consuming and make a great deal of work for thevendors; they are accordingly unwelcome.Therefore inquiries are only made with compli-cated equipment and machinery. Simpler itemsare estimated on the basis of in-house documents.

An engineering firm normally has a data basecontaining important data (including weightsand prices) on all equipment and machinerycovered by orders and inquiries in recent years.The data base must be kept up to date, thisrequires close cooperation with the purchasingdepartment. Armed with such a system, the firmcan make fairly accurate estimates, for example,of the cost of heat exchangers per square meter orper kilogram, given the size, type, pressure, andmaterial of construction. The same holds fortowers, reactors, and vessels; here also the size,pressure, temperature, and material must beknown. The costs of simple machinery can bedetermined similarly. The use of computer pro-grams makes it an easy matter to calculate theweights of equipment items.

Before such prices are incorporated into theestimate, correction factors must be determinedso that current prices can be obtained. There aretwo reasons for such a correction:

1. The figures stored in the data base cannot becompletely up to date, and there may be a lagof half a year or more before the order is issued

2. Purchase prices depend not only on markettrends but also on the economic situation ofthe manufacturer

The use of such a data base system necessi-tates the availability of appropriate cost-index

Table 4. Example of a calculation scheme for plant costs

Designation % of 1 % of 1

þ 2

% of 1

to 3

% of 1

to 4

Equipment

Columns 12.5 7.4 4.7 3.4

Reactors 6 3.5 2.2 1.6

Heat exchangers 22.5 13.3 8.4 6.1

Tanks 18 10.6 6.7 4.8

Furnaces 10 5.9 3.7 2.7

Machines 26 15.3 9.6 7

Other equipment 5 3 1.9 1.4

Total 1 100 59 37.2 27

Bulk material

Steel structures 8.3 4.3 3.1 2.2

Piping 25 14.7 9.3 6.7

Control systems 15 8.8 5.5 4

Electricals 9.5 5.6 3.5 2.5

Noise abatement 0.7 0.4 0.3 0.2

Catalysts 2.5 1.5 0.9 0.6

First charges 1.2 0.7 0.4 0.3

Spare parts 7.5 4.4 2.8 2

Total 2 69.7 41 25.8 18.5

Total 1 þ 2 100

Package units

Erection (including

material for

43 27 19.5

insulation

and painting)

Civil work 16 10 7.2

Total 3 59 37 26.7

Total 1 þ 2 þ 3 100

Other costs

Packing 3 2.2

Transport 2 1.4

Insurances 1.5 1.1

Planning costs 14 10.1

Supervision of

construction

5 3.6

Commissioning 4 2.9

Allowance for

inflation

4 2.9

Unforeseen 5 3.6

Total 4 38.5 27.8

Total 1 to 4 ¼project costs

100


figures for price adjustment. More informationon cost-index figures is given in Section 2.2.1.5.

3.5.3. Bulk Materials

Provided the engineering documentation (layout,piping and instrumentation diagrams etc.) isexact enough (see Fig. 7, Section 3.1), bulk ma-terial costs can be calculated fairly accurately byapplying unit prices (per piece, m, m2, m3, kg,etc.) to material takeoffs. Installation costs arealso derived from takeoffs classified according tofunctional disciplines (unit prices for construc-tion activities plus costs of site preparation,erection equipment, materials, etc.). If unit pricesfrom an in-house data base system are used forbulk materials, they must be adjusted in the sameway as equipment prices (see Section 3.5.2).

Another option is to obtain detailed currentunit prices from the manufacturers or construc-tion contractors. This method yields accurateresults, but is time consuming and involves highcosts. It should therefore be employed only whena highly accurate estimate is needed.

The engineering documents available in thedesign stage are usually incomplete. The trend inbulk materials estimation is therefore towardapplying multiplication factors to the estimatedtotal equipment costs. The latter can be obtainedonly, however, by analyzing projects alreadyrealized. In order to achieve satisfactory accu-racy, separate multiplication factors must bederived for each plant type and each process.The larger the number of facilities evaluated, themore accurate are the multiplication factors. Thepercentages given in Table 4 represent multipli-cation factors for the individual cost items of atypical chemical plant; normally, material andconstruction costs for a bulk item are determinedseparately. Other multiplication factors are pub-lished in [7].

If the required accuracy is 4 � 10 %, how-ever, these two estimation approaches arecombined.

Civil Work and Structural Steel. Forstructures such as compressor houses, controlrooms, laboratories, and workshops the enclosedvolume is usually determined and the costs esti-mated by using unit costs. In the case of adversesoil conditions or heavy structures, it may be

necessary to perform a preliminary static calcu-lation so that the foundation size and/or thenumber of piles needed can be determined moreaccurately. The other civil-work items are oftenhandled by means of multiplication factors.

The same holds for structural steel, althoughhere the costs are found in terms of the weight andthe price per tonne for heavy, medium, and lightsteel construction.

Control Systems. The trend toward plantautomation and increasingly strict safety stan-dards have increased the contribution of controlsystems to plant costs. The degree of sophistica-tion of the control system of a chemical plantdepends strongly on the future operator. Accord-ingly, it is often impossible to work with generalmultiplication factors. Costs are therefore calcu-lated from the number of control circuits, re-quired computer capacity, number of displaysand control panels, etc. Multiplication factors areused only for installation materials.

Electricals. Since the number and sizes ofelectric motors are normally known from thedetailed equipment estimate, it is relativelysimple to determine cost-intensive electricalitems such as motors, transformers, switchgear,and cables. Costs for other items, such asgrounding, lightning protection, lighting, andinstallation materials are handled with multipli-cation factors.

Erection. The determination of equipmentinstallation costs on the basis of unit-weightformulas gives adequate accuracy; it is alsosimple because the cost of major equipment(other than machinery) is usually based onweight. A similar method can be used for ma-chinery, but the calculation process is oftendivided into equipment setting (unit-weight for-mulas) and equipment alignment (hourly basis).

Installation costs for bulk material items (e.g.,control systems, electrical, insulation, and paint)and for catalysts and first charges are usuallydetermined by applying multiplication factors tothe material costs.

The civil work discussed above normally in-cludes installation costs. Erection costs for struc-tural steel are established on the basis of unit-weight installation formulas and subdivided intoheavy, medium, and light steelwork.


Serious difficulties arise in the accurate esti-mation of piping installation because the exactmaterial takeoff and the exact routes of pipe runsare seldom known. The labor cost of installationdepends on the number of welds and flangeconnections, pipe diameters, wall thicknesses,materials of construction, and installationheights. Estimation is therefore done with unit-weight prices tabulated for each nominal diame-ter or nominal-diameter group. A separate calcu-lation is needed for each material of construction.

Installation costs can also be estimated fromthe number of welds per meter of straight pipeand the nominal diameter but this requires de-tailed knowledge of the piping design.

Vendors normally offer package units, such ascooling towers and refrigeration units, includinginstallation; the entire scope of supply and in-stallation costs given in the bid specifications cantherefore be incorporated in the calculation as alump sum.

The calculation of the construction of a plantmust also cover the costs of site preparation,utilities, construction equipment, transportationequipment, scaffolds, site roads, fencing, secu-rity, first aid, and other items.

3.5.4. Other Costs

Bulk material costs are commonly determinedfor each section of the plant, whereas ‘‘other’’costs are calculated for the project as a whole.Multiplication factors are employed for itemssuch as packaging, shipping, insurance, priceescalation, and contingencies.

Before the contingency factor is established, itis necessary to make certain that the calculationsfor the various functional disciplines do notcontain any multipliers of this type, since other-wise contingency amounts grow out of control.Engineering, procurement, construction supervi-sion, and commissioning costs are, however,usually determined individually.

Engineering and Procurement Costs. Inaddition to the approximate method of obtainingengineering and procurement costs by applyingmultiplication factors to plant costs, two moreaccurate methods are available: calculation ofengineering hours and procurement hours on thebasis of equipment items or the documents to be

prepared for each functional discipline. The latteris more accurate.

Itemized Equipment Approach. The num-ber of hours per equipment item can be referred tothe work done on each item; all equipment itemsare then added together with multiplication fac-tors for other functional disciplines. Alternative-ly, a total number of hours per equipment itemcan be determined for all functional disciplines.This total number of hours varies widely, de-pending on the processes employed, the scope ofauthority engineering, and existing design docu-ments. It generally lies between 600 and 1200 hper equipment item. This method can be usedonly if experience has been gathered with exist-ing plants of the same type.

Calculation Based on Documents to bePrepared. The estimation of man-hours basedon the number and size of drawings and docu-ments presupposes a great deal of experience inproject execution and the availability of docu-ment breakdowns from earlier projects (includ-ing empirical figures for the hours spent on allother activities, such as procurement and expe-diting, dealing with vendors, and inspection ofequipment). This procedure also calls for anexact definition of the individual services (ser-vice catalog) so that the various functional dis-ciplines can be clearly isolated from one another.In practice, a blend of the two methods of calcu-lation is often used.

After the man-hour requirements for engi-neering and procurement of a project have beendetermined, they are subdivided into categoriesand multiplied by appropriate hourly rates todetermine the costs. Travel, communications,reproduction, computer costs, and the cost of themodel must be added.

Construction Supervision Costs are oftenobtained by applying multiplication factors to theequipment and bulk materials groups or to theengineering hours. A better, slightly more com-plex method is to determine the costs on the basisof construction and manpower schedules.

The manpower schedules include supervisorypersonnel for the functional disciplines used bythe operator and the engineering contractor; alsothe installation specialists provided by the man-ufacturers of complex apparatus, machinery, andpackage units; and supervisory personnel, if any,assigned by the licenser.


In contrast to engineering costs, estimates arebased not on hours but on person-days and dailyrates. These rates normally include accomoda-tion and food costs for personnel. The calcula-tion must also cover overtime, travel expenses,and costs for the construction office and itsoperation.

Commissioning Costs. The costs ofcommissioning relate to the time from the endof erection to the start of production. They arealso classified as investment and must thereforebe incorporated into the estimate. Commission-ing usually lasts one to three months, but up to sixmonths for very large multistage plants. This costgroup includes the following items:

Personnel Costs. Personnel costs are gener-ally determined in the same way as installationsupervision costs.

1. Operating personnel on a rotating shiftbasis

2. Laboratory personnel on a rotating shift basis3. An on-call installation crew who remedy

mechanical problems and/or reinforce theshift crew in the workshop

4. Specialists assigned by vendors for commis-sioning special equipment and machinery

5. Consulting or supervision by licenser’spersonnel

6. Possible increased deployment of process andspecialist engineers from the operator’s engi-neering department

7. Consultation or supervision by personnel be-longing to the engineering contractor

Other Commissioning Costs. These costshave to be estimated case by case. For routineprocesses where most products are directly mar-ketable, raw material, auxiliary, and fuel costscan be virtually neglected. In larger, more inno-vative plants running difficult processes, thesecosts may be very high. Further difficulties mayarise if the market for a new product has to becreated. Other commissioning costs are dividedinto

1. Training of company personnel (possibly inthe licenser’s facility)

2. Raw materials and auxiliaries as well as utili-ties needed to replace defective charges orproduct not up to specification

3. Travel expenses for personnel not belongingto the company

Indirect Costs. Other indirect costs can ac-count for a large portion of investment costs.They are:

1. Licensing fees2. Land costs3. Land development costs4. Fees for government inspections and

approvals5. Financing costs6. Administrative costs and costs for possible

expansion of sales organization to market theproduct

7. Public relations work to inform the publicabout the new plant

8. Working capital, such as raw materials stocksand finished product storage

3.6. Conclusion of Preliminary DesignPhase

The last step in preliminary design is the prepa-ration of a report containing the followinginformation:

1. The updated feasibility study.2. Profitability calculation with graphs of accu-

mulated revenues and expenses, the break-even point, and profits (similar to Fig. 6,Section 2.3.1). If a clear decision in favorof one of the alternative investments is pos-sible, the profitability calculation is limitedto a single proposal. If, however, entrepre-neurial questions figure in the analysis, thereport should include the two best alterna-tives.Inaccuracies in the primary documentsand the amounts added to allow for theseshould be established and specified in allcalculations.

3. Schedule for financing requirements.4. Schedule for personnel requirements.5. Time schedule for the phases of execution up

to the start of production.6. The project manual containing all the studies

and results from preliminary design (basicengineering documentation), including theestimate.


4. Contract Writing and Forms ofContracts

4.1. Licensing Agreements

Process development has become so expensivethat development costs can seldom be covered byroyalties. Aside from government-funded re-search, new processes are developed chiefly byproduction-oriented chemical companies or pet-rochemical concerns, which regard license fees asincidental income. In cases where engineeringfirms hold licensing rights, they either arise fromlicense agreements with production companies orrepresent improvements to established processes.

Licensing agreements may relate to patentlicenses (rights to use granted patents, Sec-tion 4.1.1), process licenses (which include pat-ent rights and all know-how, Sections 4.1.2 and4.1.3), and straight transfers of know-how forprocesses not protected by patent (Section 4.1.4).

4.1.1. Patent Licenses

Suppose chemical company A has developed aprocess that is under patent protection but iswholly or partly covered by the earlier protectionof chemical company B. Company A will seek tojoin B by exchanging patent rights, a mutualgrant of rights to use the patents, or the purchaseof a patent license from B. Usually, company Basks for compensation in an amount that dependson the age, the importance of its rights, and thedegree of overlap. This fee only covers theparticular use in question. The licenser does notdisclose experience above and beyond the pub-lished contents of the patents. If the fee asked istoo high for A or there are doubts about thevalidity of B’s patents, then in the absence of anagreement A can either seek to have the courtsdeclare B’s patents invalid or can disregard themand risk legal action by B.

4.1.2. Process Licenses

As a further example, B has plant-scale experi-ence while A only has experience with a pilotplant for the same or a similar process. Even if thenew process is clearly an improvement, it isexpedient for A to purchase B’s experience

because inevitable setbacks and lost time ongoing from the pilot plant to a first production-scale facility (‘‘scaleup risk’’) usually cost morethan a process license.

In acquiring a process license, company Awill commonly be confronted with one or moreof the following possiblities:

Case 1. To date, company B has only built itsown full-scale plant. It has not yet granted anylicenses to third parties and therefore has nodesign documentation on plants with differentfeedstocks and utilities, as needed by A for itsplant. B is not prepared to guarantee third-partyplants, but only to offer a patent and know-howcontract. Once such a contract has been signed, itpermits A to examine the operating records andassemble the documentation needed for the pro-jected plant.

Case 2. Company B is interested in world-wide licensing of the process, maintains a largein-house engineering department, and hasworked out the complete process design. Inaddition to the license and know-how contract,B will offer guarantees, and may even be ready toundertake engineering, procurement, construc-tion supervision, and commissioning with sepa-rate billing for these services.

A variant of this case is when B has developedthe process in collaboration with an engineeringcontractor and granted exclusive use or construc-tion rights to that company. Here again, licenseeA cannot seek competing bids because the pro-cess is a ‘‘monopoly.’’

Case 3. As in case 2, B owns the processdesign and is prepared to give guarantees in thecontext of a license and know-how contract. Bleaves it to licensee A, however, to select anengineering contractor to construct the plant.Company A requests competitive bids from sev-eral engineering firms, each of which must enterinto a confidentiality agreement regarding theworking documents delivered to it. Licenser Bwill opt for this procedure when its patents havegiven it the lead on the market for a long enoughtime and disclosure to several engineering con-tractors will lead to the wider use of the processand generate royalties.

Case 4. Since patent protection for processesdeclines in value with age, it is in B’s interest tosecure its know-how to the maximum extent.Accordingly, B will hand over the acquisitionand licensing rights to one or two trusted


engineering firms in the form of a license agree-ment (which may be exclusive or nonexclusive,for stated countries or for the world). Licensee Acan then acquire process rights, engineering, andplants only by contracting with one of theseengineering companies.

Process licensers usually give limited guar-antees on the functioning of the process andproduct quality, but their liability commonlyextends only to half of the license fee. Commis-sioning assistance is generally given – in specialcases, after training of the operating personnel inB’s own plant or another licensee’s plant. Indeveloping countries, licenses are only grantedwith long-term management contracts, whichmany banks require as a condition of financing.

For profitable processes, royalties amount to1 – 4 % of the product value for the life of thepatent, but for at least 10 years. A running royaltyis a license fee levied on a specific measurablequantity of production from a specified technol-ogy. A paid-up royalty generally represents thecurrent value of 10 years’ royalties and is thusequal to 5 – 6 times an annual royalty. If supplycontracts are in effect, the royalty may also becalculated in terms of the plant value (e.g., 5 % ofthe value of the entire facility or 10 % of the valueof the process facility proper) or as a fixedamount per unit product, often with price escala-tor clauses.

4.1.3. Process Licenses via EngineeringContractors

Cooperation with engineering contractors oftenincreases the licenser’s chances of obtainingadditional revenue by licensing its entire operat-ing know-how. The licenser simultaneously re-duces the load on in-house engineering capacitybecause the external engineering firm bears themain load of establishing engineering documen-tation, interpretation, and training. Licensing istherefore being increasingly handled by engi-neering firms who check and extend the processdocumentation and may also optimize someequipment items or process steps. Improvementsare possible when new operational know-howhas not yet been implemented as redesigns in thelicenser’s first full-scale plant; this is difficultwith good processes because of market require-ments (supply contracts for products). Engineer-

ing firms are able to undertake all design, supply,and plant construction tasks, including commis-sioning. Competitors offering the same processwill design different plants because of theirdifferent design and construction experience. Incomparing bids, the customer must thereforeconsider not only the price, but also the refer-ences, guarantees, and quality of the bidders.

Production companies granting licenses onlytend to guarantee the typical basic features of theprocess (yield and product quality). They nevertake responsibility for plants erected by thirdparties. Engineering firms thus see an opportuni-ty to guarantee the whole plant. This is, of course,only possible when the company has built manyplants and has wide experience and knowledge.The licenser generally remunerates the engineer-ing firm for this aid by paying it part of the royaltyin return for the additional responsibility.

If the engineering firm has no special experi-ence, it will supplement the licenser’s processguarantee with a guarantee of correct engineeringdesign; in the case of supply contracts, it willrelieve the customer of some risk by giving amaterial and price guarantee. Depending on ex-perience, the firm may also guarantee the capaci-ty of the plant and the utilities consumptionwithin stated tolerances. When processes arelicensed from the licenser either directly or viaan engineering firm, it is important for the licens-er to ensure that ‘‘secret know-how’’ remainssecret and that the exchange of experience, in-cluding supplementary discoveries of the licens-ee (feedback), remains confidential. Naturally,the licenser will compensate the licensee foreconomically valuable improvements.

4.1.4. Know-How Contracts viaEngineering Contractors

The know-how contract is a modification of theprocess license agreement. When patent protec-tion ceases, the process licenser attaches greatimportance to keeping its undisclosed know-howsecret. This know-how is given to a few engineer-ing firms under strict confidentiality agreements,which are binding on the firms’ employees. Com-panies interested in the construction of plants maybe told solely what has already been published.They can only obtain more precise informationafter having signed a secrecy agreement.


The texts of know-how contracts are compa-rable to those of license agreements, but the fee islower. The activity of engineering firms and anyguarantees they might give are similar to thosediscussed under license agreements.

Some engineering companies have often man-aged to improve current processes that are nolonger protected so that new applications result.In most cases, however, the activity of such firmsis limited to simpler processes (e.g., gasificationand gas purification), unit operations, or improve-ments in thermal economy, automation, environ-mental protection, and disposal technology.

4.2. Design and Supply Contracts withEngineering Contractors

Should an investor bring in an engineering firmto construct its plants? This question ariseswhenever the investor does not have adequatein-house engineering capacity. In the followingsections it is assumed that the investor needs anoutside engineering contractor for a construc-tion project.

4.2.1. Selection of EngineeringContractors

4.2.1.1. Importance of Risk in the PlantBusiness

The intention to build a chemical plant presentsthe investor and the candidate engineering firmnot only opportunities for success but also risks.The erection of a large plant entails above-aver-age, qualitative and quantitative risks. The fol-lowing features of the large-plant business arecrucial in risk assessment:

1. Complexity and duration of the project2. Responsibility for long-term operation of the

plant3. Transfer of investor’s entrepreneurial risks to

the engineering firm and vice versa4. Priority of the project in investor’s and engi-

neering firm’s business results5. High financing budget6. Heavy dependence on market development of

the product

A unique feature of the plant design andconstruction business is that these risks are gen-erally cumulative, so that both the investor andthe engineering contractor must practice riskmanagement, i.e., measures aimed at identifying,assessing, and limiting risks.

Since the investor and the engineering con-tractor deal with potential risks in different ways,the formulation of a plant construction contractbetween these parties is extremely important:both parties must be satisfied that their interestsare protected.

Generally, there is no benefit to the investor inlooking too hard for every competitive advan-tage. This is especially so when the engineeringcontractor may fall into the danger of trading offplant quality for savings as a result of acceptingbelow- cost prices and unsatisfactory conditions;such shortcuts often become apparent only afterthe plant is on-stream. As a rule, sharp competi-tion forces engineering firms to seek an optimaloutcome at minimum cost. These considerationshave promoted cooperation between investor andengineering contractor and have become crucialpoints in contract drafting.

4.2.1.2. Selection and Award Criteria

The investor develops his own criteria for se-lecting an engineering firm to carry out a con-struction project. Bid invitations and bid com-parisons are used to award a contract that isacceptable to both parties. The most importantcriteria follow:

1. Does the engineering firm have experience orreferences relevant to the tasks it may have toperform?

2. Does the firm have experience in the countryand locality where the plant is to be built(logistics) ?

3. Is there a danger of communications problemsduring execution of the project (languagebarrier) ?

4. What kind of staff situation exists within theengineering firm? Will it be able to organizegood project management?

5. What standards and specifications will governthe work? Can the engineering firm ensurecompliance with standards that may be newand unfamiliar to it?


6. What references does the firm offer withregard to the quality of supply and servicesand compliance with time schedules?

7. Is the firm’s credit rating adequate for therequirements of a large contract?

In the bid invitation, the investor states what iswanted and required with regard to the technicalconcept (process technology, scope of deliveryand services, quality requirements, etc.) and thecommercial concept (type and contents of con-tract, financing, marketing, etc.).

A thorough, detailed bid represents a signifi-cant cost to the bidder. A company will onlymake this investment if it has a good chance ofwinning the competition. The bid invitation musttherefore be written in a clear, understandablemanner so that the potential bidder can preciselyidentify the task to be performed.

In order to make bids comparable, all biddersmust be given the same documents and informa-tion. The bid invitation should always include thefollowing:

1. General description of project with site lay-out plan.

2. Services and deliveries desired (e.g., basicengineering and know-how, complete engi-neering, complete engineering plus procure-ment assistance, delivery with or withoutconstruction and commissioning).

3. Precise data on the process or process stagesto be covered by the bid. If the bidder doesnot have rights to the process, the invitationmust state whether the process license is alsoto be covered or whether this will be handledby the investor directly with the processlicenser.

4. Production capacity and product quality.5. Available feedstocks, auxiliaries, and utili-

ties (composition and quantity available).6. Availability of electric power and water for

construction purposes.7. Available infrastructure (e.g., workshops,

laboratories, warehouses, and socialfacilities).

8. Overall time schedule.9. Guarantees desired for production, quality,

consumption rates, materials, date ofcompletion.

10. Pricing terms of payment desired.11. Standard codes and guidelines to be applied.

12. Deadline for bid submission.13. Period for which bid must remain binding.14. General conditions.

A qualified engineering firm may still decide,not to submit a bid – possibly because it sees toolittle chance of realization of the project or achance of success in the face of stiff competition.

The simplest approach to bid comparison is toprepare schedules of prices, delivery times, termsof payment, terms of delivery, exclusions, andmiscellaneous conditions. Large investor com-panies send preformulated tables to bidders,especially for standard processes; the biddermerely has to enter the services, exclusions, andmiscellaneous conditions.

The differences found in the bid comparisonshould be analyzed and then discussed with thebidder. Discussions are often time consumingand should be carefully planned. An efficientnegotiating program should cover the followingtopics, in order:

1. Fundamentals, infrastructure, overall con-cept, process engineering, economics

2. Equipment, material, and services to be pro-vided; exclusions

3. Special and general conditions; guarantees4. Price5. Time schedule, including intermediate targets

4.2.2. Form and Content of Contracts

4.2.2.1. Basic Concerns in Contract Writing

In writing the contract, both the party invitingbids and the bidder can propose, negotiate, andconclude agreements. The elements of the con-tract must therefore cover all those aspects thatthe potential contracting parties deem not satis-factorily governed by other provisions (usuallyby relevant legislation).

Efforts to reach contractual agreement asidefrom relevant legislation are primarily devoted tomaking the potential risks manageable. Detailson contract drafting can be found in [37], [38],[113–115].

Since the profit margins of the engineeringcontracting business are small, it is important toidentify, assess, and allot all risks. For a multi-million-dollar project differences of a few tenths


of a percent can decide whether a bid is acceptedor rejected.

Often the only other possibility for absorbingrisks is the contractor’s profit, which averages ca.2 – 4 % of contract value in the plant design andconstruction business. Such a small margin canonly cover limited cost overruns on a singleproject.

Methods of dealing with potential risks at thecontract drafting stage can be classified into twogroups. First, each of the parties must considerthe well-established policies of its company. Theextent of potential risk for the company resultingfrom deviation from such a policy governs whichperson in the company hierarchy has the power ofdecision. The person in charge of the negotiationsmust therefore know when the limits of hisjurisdiction have been reached. The decisionwhether to accept or reject conditions proposedby the other party must then be passed on to anappropriately higher level in the companyhierarchy.

Second, there are modifiable (dispositive)goals for the negotiating parties. The limits ofnegotiability (breaking points) are reached whenone or the other party’s willingness to makecompromises has been exhausted or when accep-tance of the other party’s proposals would resultin incalculable risks.

As a rule, the engineering contractor has todecline to accept liability for indirect andconsequential damages. Furthermore, the con-tractor cannot be held responsible if postpone-ments of deliveries and services occur as aresult of circumstances beyond his control(e.g., war, revolution, strikes). Other possiblebreaking points include excessive guaranteerequirements.

The engineering contractor will reject a pro-posal for unlimited liability. Limitations on lia-bility include:

1. Limitation of total liability for delays and/ornonattainment of process guarantees and/orfor costs incurred for the correction of designerrors in equipment or during constructionand installation.

2. Time limits on the guarantee for materials,typically xmonths after commissioning of theplant; if commissioning is delayed and this isnot the fault of the engineering contractor, a‘‘not later than’’ date must be agreed on.

3. The liability provisions set forth in the con-tract should bar recourse to liability lawsbecause these do not make appropriate allow-ance for the special features of the plantconstruction business.

4. No liability for indirect or consequential da-mages, such as lost profits, loss of use, and lossof production. From the engineering contrac-tor’s standpoint, this is a nonnegotiableclause. If such liability were accepted, theexistence of even financially sound contract-ing companies might be endangered.

4.2.2.2. Contract Types and Provisions

Although there are many types of contracts, thefollowing are particularly important:

Engineering Contract. An engineeringcontract normally governs compensation for en-gineering and procurement services, and thesupervision of construction, and commissioning.It usually provides for reimbursement of inciden-tal costs such as travel, communications, com-puter support, and accomodation.

The contract can be for complete engineering,including procurement and supervision at theconstruction site up to the successful completionof the guarantee run.

The contract may, however, be limited topartial services, such as basic engineering, de-tailed engineering, procurement services,supervision of construction, supervision ofcommissioning, and supervision of third-partyengineering services.

An engineering contract does not includedelivery of plant equipment or the performanceof plant construction. The procurement servicesthat may be included are generally carried out ‘‘inthe name and on behalf of ’’ the investor.

The contractor’s liability in an engineeringcontract extends to correcting design errors atno cost to the investor, and often includes apercentage of costs incurred as a result ofcorrecting problems in equipment or duringconstruction.

Reimbursable Contract. In the reimbursablecontract, every hour of work performed by theengineers and procurement staff is paid for, plusall incidental costs. Proof of working hours isrequired.


A reimbursable contract offers an advantagewhen the scope of work is not well-defined (sothat it is impossible to determine a fixed price) orwhen abandonment of the project is anticipated.

The hourly or daily rates specified in thecontract are often classified by category. Thecontract must state what is included in the hourlyrates (e.g., salary, other payroll costs, workplacecosts, profit).

An important drawback of this type of con-tract is that the investor can strongly influence thecontractor’s execution of the project. Because thescope of engineering services is generally notadequately defined, control of the service budgetis difficult.

Reimbursable Contract with Target Price.In this type of contract, the engineering contrac-tor accepts a share of the risk for staying withinthe calculated service costs. A target price is seton the basis of the calculated costs; the engineer-ing contractor generally takes a certain percentparticipation in any overrun, but receives a bonusif the work comes under the target price.

The target-price provision can also extend toequipment and construction costs. A sufficientlyexact definition of the services is required so thata fairly reliable calculation is possible. The in-vestor gains the advantage of better budgetcontrol.

Lump-Sum Engineering Contract. If thebid invitation for a chemical plant defines thescope of work well enough, a lump-sum bid canbe prepared. This type of contract has the advan-tage for the investor that the budget is set inadvance (provided no additional work is neededin the course of the project). The engineeringcontractor has much better control over the proj-ect with regard to costs (man hours) and sche-dules. In contrast to the reimbursable contract,the investor has a limited say in decisions takenduring the project.

Supply Contract, Turnkey Contract. As arule, a supply contract commits the engineeringcontractor to provide engineering, and supply ofall plant equipment and materials needed for theconstruction of a complete chemical plant. Thecontract must define the limit of responsibility ofthe engineering contractor for plant equipment;the boundary may be the ship, railroad car, or

truck used to transport the equipment to theconstruction site. The engineering contractor’sresponsibility can, however, extend to the receiptof equipment on site.

A turnkey contract includes the provisions ofthe supply contract, plus construction services. Ifthe engineering contractor does not have thepersonnel resources for construction work, itgenerally subcontracts this work to specialistfirms but assigns its own management and su-pervisory personnel to maintain single-line re-sponsibility to the investor.

In supply and turnkey contracts, all goods andservices are procured in the name and on behalfof the engineering contractor. The contractorthus assumes liability to the investor for themechanical functioning of equipment as provid-ed by the contract. In turn, the liability risksassociated with this material guarantee areshifted to the relevant suppliers and subcontrac-tors. Similarly, the engineering contractor willimpose penalties on the suppliers and subcon-tractors for late delivery or installation to reduceits own time risk.

Supply and turnkey contracts are based on alump-sum price, sometimes with a provision forprice escalation. In order to keep the price riskquantifiable, the bid must be based on a detailed,accurate definition of the scope of deliveries andservices for the plant to be erected.

4.2.2.3. Essential Elements of a Contract

The structure and delimitation of scopes of de-livery and work are very important, especiallybecause these factors affect liability questions,contractual provisions, and the negotiation pro-cess. They are expressed in the form of

1. Specifications of services2. Description of the scope of delivery with

delivery boundaries3. Guarantees and liabilities4. Criteria for handing the plant over to the

investor

Specification of Services. Although thespecification of technical and commercial ser-vices is not usually problematic from the stand-point of contract law, it is often highly relevant asa basic fact and for later reference. Since thisspecification normally comprises a very large set


of documents, it should be formulated as one ormore appendices to the contract. Much unneces-sary discussion between the contracting partiescan be avoided if the specification of services iscarefully prepared in detail and states clearlywhat services must be performed by whom.

It is useful to prepare a list of services for theproject, which can be based on the specificationservices contained in the bid invitation, as well asin the bid. Any modifications made in the courseof contract negotiations must be incorporated.

The specification of services must also containthe detailed conditions and constraints needed tocarry out the assignment, a procedural description,and a list of relevant regulations and standards.

The list of services should give a detaileddescription of technical and commercial servicesto be performed, indicating what design docu-mentation is to be prepared (e.g., drawings, datasheets, specifications, flow sheets and sche-matics, lists, approval documents).

Moreover, it must be stated which of theservices will be performed by the engineeringcontractor, the investor and third parties.

Scope of Delivery/Delivery Boundaries. Asupply contract must describe the equipment andmaterials to be supplied; a turnkey contract mustalso define the construction services. In addition,the scopes of delivery and work must be delim-ited with respect to third parties.

The description of the scopes of delivery andwork should contain the most complete list pos-sible of apparatus and machinery; a descriptionof electrical equipment and materials and controlsystems; approximate quantity requirements forpiping, concrete, cables, and structural steel; anda description of construction services. It is not,however, expedient to set down exact numbersbecause final data on equipment size, pipe rout-ing, etc. cannot be made until the design work isunder way. Establishing the details too earlycould hinder subsequent optimization of the de-sign, this would not be in the investor’s interest.

Guarantees. Forms of guarantee for chem-ical plants have been devised that are technicallymeaningful and can be verified at a reasonablecost.

Mechanical (Material) Guarantees relatesolely to individual pieces of equipment, but not

parts subject to wear. A period (e.g., 12 or 18months) is defined in which repair or replacementis undertaken by the contracting party or suppli-ers at no cost to the investor.

Process Guarantees generally relate to thecapacity of the plant, product quality, and theconsumption figures for utilities such as steam,cooling water, and electric power.

The contract should state the conditions usedto verify the process guarantee (e.g., analysis offeedstock, quality of utilities). Furthermore, itshould define the measurement and analysismethods used in the guarantee run and itsduration.

The forms of guarantees are different forutilities (steam, electric power, fuel gas), wherea certain amount of over- and underconsumptioncan offset each other, and for plant capacity andproduct quality, where shortfalls result inpenalties.

If the plant does not meet the agreed figures inthe guarantee run, the engineering contractor isgiven an opportunity to make improvements. Ifthese are not successful either, the relevant con-tractual consequences take effect.

Handing Over the Plant. The criteria forhanding the plant over to the investor are usuallystated in the contract. The plant is often handedover section by section and/or in phases. Severalforms of handover are employed:

1. Transfer to the operational custody of theinvestor : This, as a rule, takes place at thebeginning of test operation. The investor’spersonnel run the plant under the directionof the engineering contractor.

2. Provisional handover: Provisional handovertakes place after a report on the successfulguarantee run has been signed, or after a ‘‘notlater than’’ date has passed (if the guaranteerun has not been done for reasons that theinvestor has to justify).

3. Final handover: Final handover comesafter all defects listed in the report madeafter the provisional handover have beencorrected.

Final inspection of the plant, performed byboth parties, completes the handover procedure.


5. Execution of the Project

Design and construction of chemical plants arecomplex operations comprising many interrelat-ed activities (Fig. 16). Plant design and the pro-curement of equipment occupy workers fromnearly a dozen special engineering and procure-ment disciplines.

Medium-sized to large projects [contractvalue (50 – 250)�106 DM; (30 – 170)�106 $]have a design period of approximately 15 – 18months and a total project duration (up tocommissioning) of ca. 18 – 24 months. Some100 – 150 engineers and procurement staff areinvolved at the peak of such a project in thedesign offices alone.

5.1. Scope of Work

Work on total chemical plant project comprisesbasic engineering, detail engineering, procure-ment, civil work and erection, and commission-ing. (The ‘‘authority engineering’’ activity, inwhich documents are prepared for submissionto the authorities having jurisdiction, is generallycarried out during both basic and detailengineering.)

Depending on its engineering capabilities andresources the investor may execute part of the

project (basic engineering and/or procurement,and/or construction). The remaining activities (orthe whole project) are executed by an engineer-ing firm under contract.

Basic Engineering is based on process de-sign (Section 3.3) which is performed during thepreliminary design phase by the investor, by thelicenser, or by an engineering firm in closecooperation with the investor. Process design isa component of basic engineering.

Basic engineering documentation includes theprocess flow diagrams, piping and instrumenta-tion diagrams, plant layout, equipment list (bro-ken down according to plant sections), utilitiesdistribution scheme, process engineering datasheets, noise protection concept, electrical equip-ment list, summary of electrical consumers (one-line diagram), data sheets for control equipmentand instrumentation, functional process controland instrumentation plan, description of the pro-cess control system, and soil report.

The content and level of detail in basic engi-neering documentation is such that detail engi-neering can be done (possibly by another engi-neering firm) without significant difficulties.

Detail Engineering. In detail engineeringthe engineering and procurement teams pre-pare detailed plans, drawings, specifications,

Figure 16. Main tasks of project execution


calculations, and descriptions so that the follow-ing steps can be carried out:

1. Preparation of bid invitations for all plantequipment, material, and services such ascivil work and erection of plant equipment

2. Selection of manufacturers, vendors, subcon-tractors; placing of orders

3. Execution of quality assurance operations atmanufacturers’ and vendors’ workshops

4. Shipping of plant equipment to the plant site5. Execution of civil work and erection of plant

equipment6. Commissioning

Procurement Services include all activitiesin connection with preparation of bid invitations,evaluation of bids and bid comparisons, andplacing of orders. They also involve ensuringon-time performance of manufacturers and ven-dors (expediting), as well as the planning andsupervision of the shipping of plant equipment tothe plant site.

Civil Work and Erection of a facility aregenerally subcontracted to specialist firms by theengineering contractor or by the investor. Thework is often supervised by the same organiza-tion that does the detail engineering. It must notbe overlooked that the construction documenta-tion prepared by the engineering contractor willnot be free of errors, so that corrections have to bemade on-site. Such corrections should be carriedout by the engineering contractor’s specialists.

The contract should state which partner isresponsible for construction execution time andcosts: the investor, the engineering contractor, or(as at large, complex plants) a general contractoraccepting overall responsibility.

Commissioning of a plant comprises all thework done after ‘‘mechanical completion’’ up tocertification of the guarantees embodied in thecontract. The term ‘‘mechanical completion’’should be defined unambiguously and in detail.Once ‘‘mechanical completion’’ has been certi-fied, the plant passes into the custody of thebuilder. Preparatory work for commissioningand commissioning itself are usually performedby employees of the future operator under thedirection of the engineering contractor or licens-er. When the guarantee tests defined in the

contract have been passed, the plant is handedover to the owner. Minor activities remain thatare carried out by the engineering and/or con-struction contractor. This work is specified in apunch list and must be completed within a statedtime.

5.2. Project Organization andManagement

The design and construction of a chemical plantwithin a predefined time and budget calls forcareful organization of the people working on theproject, a clear definition of their responsibilitiesand competences, and an appropriate manage-ment concept.

A chemical-plant engineering firm usuallyexecutes many such projects, differing in size,duration, and complexity, at any one time. Thecontracting firm is geared to this kind of assign-ment; it often develops its own set of ‘‘tools’’ andis organized exclusively for these activities.

The following description of the relativelycomplex steps in the execution of a chemicalplant project is given from the viewpoint of anengineering contractor. It should not, however,be forgotten that investors and/or operators ofchemical plants also follow a similar procedureto design and construct plants in their own areasof expertise.

5.2.1. Matrix Project Management [116],[117]

The first powerful management concepts for theexecution of complex, single projects were de-vised in the United States during the last years ofWorld War II. It was recognized that existingforms of organization were not suited to thesolution of complicated armaments assignmentson a crash basis. This management philosophywas subsequently employed in the space pro-gram, and later found use in the industries ofWestern Europe. It can be defined as follows:‘‘Project management is a management conceptfor the solution of a well-defined problem withina predefined time subject to a cost frameworkspecified for the project’’ [117].

Personnel from a wide range of disciplineswithin a company work on a defined project in an


interdisciplinary setting and must be coordinatedand directed. This means:

1. Assignment of appropriate personnel to theproject from functional organizations in thecompany

2. Organization of the personnel into a projectteam for a defined period of time

3. Designation of a project manager4. Establishment of responsibilities and compe-

tences for the duration of the project

The organization of the project team and,above all, the responsibility and competences ofthe project manager and his colleagues, havethree basic forms: functional, matrix, and auton-omous project management.

The matrix form of project management, ei-ther in pure or modified form, is the most suitableconcept for engineering contractors because theyperform ‘‘multiproject’’ management. Such anorganization represents the best solution for in-tegration of temporary project teams into thecompany organization. It also ensures that theprojects are optimally executed.

Matrix project management is characterizedby division of competences (Fig. 17). The proj-ect manager is responsible to company manage-ment for the realization of project targets. Themanagers of the functional departments (engi-neering and procurement) involved in the projectare responsible for delegating appropriate per-sons to the project team. The managers also carry

the technical responsibility for the performanceof these team members. The project managerdetermines the ‘‘what’’ and ‘‘when’’ of a task inthe project, while the department managers de-termine the ‘‘who’’ and ‘‘how.’’

For smaller, simpler projects and projects of arepetitive character, which do not keep a projectmanager busy full-time with management tasks,the matrix system can easily be modified so thatproject management is taken over by a qualifiedperson from a functional department, who alsocarries out the required specialist work.

5.2.2. The Project Manager

The execution of a project in the matrix organi-zation concept places heavy demands on theproject manager [117], [118]. He assumes ‘‘proj-ect responsibility’’ to company management forthe assigned project: compliance with budgetedproject costs, agreed time schedules, and allcontractual conditions, particularly the attain-ment of the agreed quality level.

For the customer, the project manager is thefirst representative of the engineering firm for theproject, and also his first partner in discussions.The management tasks of the project manager areto set targets, establish guidelines, promote in-formation flow, supervise, analyze and correct,motivate, and report. He must accord the sameweight to the interests of the customer as he doesto his own company.

Figure 17. Matrix project management


The technical capabilities of the project man-ager should include not only specialized knowl-edge of the project and the technology, but alsoknowledge of how design and construction workis executed and ability in engineering, procure-ment, contract drafting, and project control.These capabilities should be complemented byfamiliarity with the client’s language, country,and the client, as well as skill in giving presenta-tions and in moderating discussions. Other qual-ities include analytical ability, leadership andnegotiation skills, ability to work under physicaland psychological stress, ability to make deci-sions, and at the same time ability to integrate andto make compromises.

In larger projects, project engineers are putunder an experienced project manager; they takeresponsibility for the execution of portions of theproject.

5.2.3. The Project Team

A project team comprises employees from tech-nical and procurement departments. If they arenot fully occupied by a project (e.g., as it windsdown), they may also belong to a team workingon another project at the same time. The orga-nization of a project team (Fig. 18) must beadapted to the specific needs of the project.

Tasks, responsibilities, and competences areunambiguously defined. The project managerbears responsibility for meeting targets until theproject is handed over to the owner, he istherefore placed above the construction sitemanager, who in turn heads the constructionsite organization.

Efficient coordination, with short lines ofcommunication within the project team, is cru-cial. An effort is therefore made to separate theproject team members physically from theirfunctional departments within the company andlocate them close together.

The team members remain subordinate to theproject manager in regard to project requirementsand for the duration of their participation inproject execution. They continue to make theirtechnical and functional ‘‘residence’’ in theirhome departments.

5.2.4. The Start Phase of a Project

The most important phase in the execution of aproject is the start phase [119], [120]. The first1 – 3 months are crucial to the success of theproject. In this period all basic decisions must bemade; all project-specific documents needed bythe team members and the project manager mustbe generated.

Figure 18. Organization of a project team


The essential decisions and documentationinclude:

1. Selection of project manager and keypersonnel

2. Creation of project team and its organization3. Working out project structure, including

definition of subprojects and work packages4. Planning of project execution and prepara-

tion of project execution guidelines5. Identification of codes and standards govern-

ing the project (usually included in thecontract)

6. Preparation of detailed time schedules (barcharts and network diagrams) as a basis fortime scheduling and control

7. Drawing up a detailed budget as a basis forcost control

8. Preparation of a detailed man-hour budgetfor each of the technical and procurementdisciplines

9. Determination of nominal progress curvesfor all disciplines involved, as a basis formonitoring compliance work progress

10. Manpower planning (office and constructionsite)

5.3. Project Control (Schedules,Progress, Costs)

(Project control during the construction phase isdescribed in Section 5.6.2.2). The control ofproject execution is one of the most importanttasks of the project manager. As early as possi-ble, the project control team (schedule and costcontrol engineers) provides information aboutthe time situation, the progress of work, and theconsumption of man-hours in relation to duedates and determines the cost situation for de-liveries and services [121]. Regular analysis ofoutstanding activities, expected time consump-tion, and cost and man-hours up to the end of theproject is used to update these values. A com-parison of the actual/expected/target valuesshows the reliable status of the project, enablingthe project manager to identify problems at anearly stage. After appropriate analysis, he andhis coworkers devise solution options, whichthen lead to decisions about further steps. Thisprocedure generally allows corrective measures

to be implemented so that the target status can beregained.

5.3.1. Time Scheduling

Time scheduling and control involve the use ofbar charts or network diagrams. The choice ismade at the start of execution and depends on thesize, complexity, and criticality of the project,and the customer’s requirements. Schedules areusually prepared and updated by computer(mainframe and/or PC).

Bar Charts. Bar charts are used for plan-ning and control of small, simple projects em-ploying established processes and involving littletime risk. These charts show the planned elapsedtime for each discipline and their importantactivities. In general, the following areas areincluded: process engineering, plant layout, civilwork and structural steel, mechanical equipment(furnaces, process equipment, machinery), pip-ing, electrical, and control systems.

The schedules cover the full span of thecontract period and are broken down into thefollowing activities: engineering (specifications,drawings); procurement (bid invitations, bidcomparisons, orders, delivery time, shipping);construction and commissioning.

Figure 19 shows an example. A ‘‘dual-bar’’system is employed to check the status of indi-vidual activities with respect to the due dates atany time during execution. The upper bar showsthe planned duration of the activity. The lowerbar indicates, as of the cutoff date, the actual orexpected start and end of the activity. The prog-ress of the activity is indicated by filling in thelower bar.

If needed, bar charts for individual disciplinescan be expanded to show more detail. This isdone, for example, when an early activity plan isprepared for the first three months of projectexecution, or when a detailed chart is drawn upif the status of work in one area is critical.

Network Diagrams. The network tech-nique is widely used in industrial operationsresearch [116], [121–124]. According to DIN 69900, the term ‘‘network diagram technique’’

includes all methods used to analyze, describe,plan, oversee, and control processes on the basis


Figure

19.

Bar

char

t


of graph theory; considered parameters includetime, costs, and materials. The main applicationof network diagrams is in project planning andsupervision. The project is broken down intosteps (activities), which are placed in a networkdiagram according to their logical dependences(precedences).

Formal representation employs arrows andnodes (a node may be represented by a rectangleor a circle). Network diagram techniques differ inhow the logical conditions ‘‘event’’ and ‘‘acti-vity’’ are assigned to these fundamental elements.

Event-on-node plan: The network is formu-lated mainly in terms of events, which are re-presented by nodes. An event is the start or finishof an activity and has no duration.

Activity-on-node plan: The network is for-mulated mainly in terms of activities, which arerepresented by nodes.

Activity-on-arrow plan: The network is for-mulated mainly in terms of activities, which arerepresented by arrows.

The following network methods based on theabove approaches were devised independently ofone another.

The Program Evaluation and Review Tech-nique (PERT) is an event-on-node method andwas devised in 1958 by the U.S. Navy in collab-oration with the Boots & Hamilton consultingfirm and Lockheed. The impetus for its develop-ment was the program to design and constructnuclear submarines. PERT uses three time esti-mates for each activity: optimistic, probable, andpessimistic. The analysis is run with each esti-mate and the results are averaged.

The Critical Path Method (CPM) was alsodeveloped in the United States in 1957. It is anactivity-on-arrow network method that was de-vised by Du Pont and Remington Rand. It wasfirst used for planning maintenance and conver-sion work in the chemical industry.

The Metra Potential Method (MPM) was firstused in the design of nuclear power plants andwas developed in 1958 by the French consultingfirm SEMA. It is an activity-on-node technique.

Several other network methods have sincebeen worked out. The Precedence DiagramMethod (PDM) was developed from MPM andallows greater flexibility in the way precedencesare represented.

The advantages of network diagram planningcan best be exploited with computers. By the end

of the 1970s, these techniques had been opti-mized for mainframe systems. Since the begin-ning of the 1980s, a variety of personal computerprograms have been written, and network dia-gram techniques have come into wide use. Main-frame and PC software are capable of outputtingthe results of network calculations in the form ofdue date lists, bar charts, and network plots.

To control progress effectively, the actualstatus of project execution must be determinedat regular intervals, the results compared with thetarget data from the network chart, and the con-sequences ascertained by recalculating the net-work to the end of the project.

Event-oriented network systems play a sec-ondary role in project planning and control.Activity-on-node and activity-on-arrow chartsare about equally important in the planning andcontrol of all kinds of projects, including researchand development.

Some engineering firms have their own soft-ware for calculating network plans. Lurgi, forexample, uses the PDM method to preparenetwork charts (unless the customer requiresotherwise). The calculation is done with theLurgi Netzplan System, which was developedin-house and is specially adapted to the condi-tions of chemical plant construction. Networkdiagrams are used for large, complex projects,chiefly when there is a great time risk. Theproject is broken down into individual activitiesof the various divisions involved, similar to theprocedure for bar charts (see above). The levelof detail is predefined by the project managerand scheduling engineer. The stored data can bequickly updated on screen (interactive opera-tion) and the network diagram immediatelyrecalculated.

When the network calculations are complete,the results can be output as lists of due datessorted under all kinds of criteria, or bar chartswith or without interdependence. Figure 20shows the steps involved in project control withnetwork planning.

5.3.2. Progress Planning and Control

Progress planning and control is performed foreach discipline involved. For managementneeds, these individual plans are assembled intoan overall plan.


The progress plan is generally plotted graphi-cally. A ‘‘target’’ curve for the planned progressof work, for example of engineering, is drawn upin the following way. The work of each engi-neering discipline is broken down into individualactivities. The duration and the expected monthlyconsumption of work units (e.g., man-hours)available from experience is specified for eachactivity. The sums of the monthly work unitsplanned for individual activities are expressed asa fraction of the total number of work unitsrequired to give a target progress curve. Theseplanning curves are prepared at the start of theproject. During execution, they form the basis forcontrol of actual work progress and actual con-sumption of work units (e.g., man-hours).

Actual work progress(physical progress)is de-termined by scheduling engineers who query thediscipline engineers and evaluate the work per-formed. An example of such a work progresschart is shown in Figure 21. The positions of thecurves of physical progress and work units con-sumed, relative to the target curve, give theproject manager a clear indication of the timecompliance situation and the efficiency of thepersonnel involved. If there are significant devia-tions from the target curve, the causes should beanalyzed and appropriate corrective measurestaken.

5.3.3. Cost Planning and Control

Costs. The objective of cost control is toprovide correct information, as early as possible,on the cost status for equipment, materials, ser-vices, and indirect costs, and to identify reliabletrends in cost development.

The project manager instructs the cost controlengineers to analyze planned orders for equip-ment and services so that cost budgets are met.This ‘‘cost engineering’’ already involves thecost engineer at the stage of bid invitation, pricecomparison, and assignment of order stages.

Cost control is used throughout the entireproject for engineering and procurement, as wellas for construction. All costs connected with theproject are considered, such as costs of equip-ment and bulk materials (mechanical, electrical,control systems, structural steel); spare parts;civil work and erection; third-party services;indirect costs (e.g., travel, computer services,communications); and costs for engineering, pro-curement, and construction supervision.

Figure 22 illustrates the operation of a com-puter-supported project cost control system.

Cost control is based on the calculation used toobtain the contract price. A detailed budget isprepared at the start of project execution. In thecourse of project execution, this budget will be

Figure 20. Project control with network system


modified if change orders are received from theclient. The project team members responsible foreach of the disciplines involved, in collaborationwith the cost engineer, keep a continual watch onthe technical and cost developments of the proj-ect in their respective areas of responsibility.

A data link between purchasing and costcontrol allows updating of actual costs. Costcontrol, however, is based on comparison ofcalculated and expected values, i.e., the calculat-ed values are always compared with the costsforecasted up to the end of the project. Thisforecast is repeatedly updated for each disciplineby the specialist engineer and the cost engineer.Forecasts are based on the order values at thecutoff date, the calculated values of equipmentnot yet ordered, and expected cost increases ordecreases. The cost control cycle closes whendata for the forecast and costs for approvedchanges are input to the cost control system.

RiskAnalysis. The analysis of orders still tobe carried out and services still to be performed isfed into the latest forecast. This analysis oftenreveals potential risks that may have a decisive

influence on the project. The effects of these riskson costs and their probability of occurrencecannot generally be clearly defined. One ap-proach to risk quantification is the Lurgi ‘‘projectrisk analyis’’ concept [125], [126]. The concept isbased on the risk profile developed during expertconferences.

Cashflow Schedule. Knowledge of how toprocure funds for equipment and services at theappropriate time is important for the investor,but also for the engineering firm working onsupply or turnkey contract. A project cashflowschedule is a combination of cost planning,time scheduling, and progress planning. Thefollowing procedure is used to prepare such aschedule:

1. Planning of deliveries and services, includingpayment modalities agreed on with the sup-pliers of equipment and subcontractors

2. Determination of relevant actual figures3. Deviation analysis (e.g., postponements)4. Revision of the plan

Figure 21. Engineering work progress


Figure 23 is a graphical representation of acashflow schedule. Payments can be read off indetail from the associated lists.

5.3.4. Project Report

The preparation of regular reports for the man-agement of the engineering firm and the inves-tor is the task of the project manager. Theseproject status reports should provide compre-hensive information; information on cost andman-hours should not, however, be included inthe report to the investor in the case of a lump-sum contract.

The report should contain the following items:

1. Texta. Summary (highlights): project status,

trends, problems

b. Detailed information. Progress of individual disciplines (pro-

cess engineering; civil engineering,structural steel; apparatus; piping, ma-chinery, electrical, control systems, pro-curement civil work, and construction)

. Problems in execution and recom-mended remedies

. Forecast for the following month andkey points

2. Graphs and lists. Time schedules. Progress curves (for individual disciplines

and the project as a whole). Network diagrams and lists. Procurement lists

3. Cost report. Analysis and assessment. Status of costs and man-hours

Figure 22. Principles of cost controlling


. Cost report (computer printout), summary

. Cost report (computer printout), detailed

5.4. Detail Engineering

5.4.1. Process Engineering

Most of the process engineering of a project isperformed at the basic engineering stage (Sec-tions 3.3 and 3.4). In addition, the process en-gineers devise the plant control concepts in col-laboration with the control system engineers. Thecontribution of process engineers to the comple-tion of piping and instrumentation diagrams ex-tends far into the detail engineering phase. Theprocess engineers also prepare the process des-cription, which states how the process operatesand identifies important control functions andspecial features.

In cooperation with the appropriate specialtyengineers, the process engineers write detailedstartup instructions which are needed for commis-sioning. The process engineers responsible forprocess design should also be involved incommis-sioning because they are familiar with the processand control details of the plant. They can also gainconsiderable expertise in operation of a plant,know-how that they can use in future design.

If the engineering firm is responsible for‘‘authority engineering,’’ the process engineeralso makes a significant contribution to the ap-proval documentation (see also Section 3.3.3.5),

which includes specifications for products, by-products, residues, and wastes; emissions; safetyanalyses; and HAZOP studies.

5.4.2. Plant Layout

Plant layout is an interdisciplinary activity. Itsmost important components are the layout (plotplan) and the piping and instrumentation dia-gram. Both documents are created, in prelimi-nary form, during basic engineering (seeSections 3.4.3 and 3.4.4). They are continuallyupdated in the course of detail engineering.

Plot Plan [38], [111]. The layout of, forexample, a petrochemical plant is usually drawnto 1: 100 scale. It shows the outlines of equip-ment items, pipe bridges, and buildings, all di-mensioned. In the case of buildings and platformson tanks and towers, horizontal projections inappropriate planes and vertical sections are alsoincluded (see Fig. 24).

An experienced erection engineer should beinvolved in the layout planning so that allowancecan be made for erection operations, in particularthe space required for the installation of heavyapparatus. Other factors that must be consideredinclude maximal exploitation of available space,placement of heavy apparatus on the groundfloor, operability of important block valves, easymaintenance of machinery, and short runs of

Figure 23. Cashflow schedule


pipes with large diameters and/or made fromexpensive materials. There must be adequatesafety distances between pieces of equipment,escape routes for operating personnel, and accessfor fire fighting vehicles.

It is also advisable to discuss the basic plotplan with the client’s personnel (plant operators,maintenance personnel) at an early stage. Theprogress of construction and new detailed infor-

mation provided by equipment vendors duringdetail engineering necessitate continual changesin the layout. In order to avoid delays in the startof construction, an attempt must be made to‘‘freeze’’ the building dimensions and the posi-tions of heavy apparatus as early as possible.

The final layout is the result of design workperformed by all the disciplines involved in theexecution of the project.

Figure 24. General arrangement drawing


Piping and Instrumentation Diagram.The piping and instrumentation (P & I) diagramor mechanical flow diagram is based on thepreliminary P & I diagram from basic engineer-ing. The latter is developed and elaborated indetail engineering, as new information is ac-quired from the engineering disciplines andequipment vendors.

The final P & I diagram describes the wholeplant in detail (by use of coding). The contents ofthe P & I diagram from the basic engineeringstage (Section 3.4.4.) are supplemented duringdetailed engineering by:

1. Operating data and dimensions of equipment2. Design data for machinery3. Data on insulation and heating of equipment,

machinery, and piping4. Elevation of machinery and equipment5. Information on noise abatement6. Delivery boundaries7. Codes for equipment nozzles8. Codes for fittings9. Detailed information on electricals and con-

trol systems

The utility systems (e.g., steam, instrumentair, and condensate systems) are diagrammedseparately from the process systems. In larger,more complicated chemical plants, P & I dia-grams may comprise > 100 DIN A2 sheets.

The P & I diagram contains all essentialinformation developed by the individual disci-plines: process engineering; equipment, machi-nery, piping engineering; engineering for elec-tricals and control systems. It must also includedata provided by the manufacturers of equipmentand machinery (e.g., the control system of acompressor). This information becomes avail-able over a prolonged span of time.

The P & I diagram is therefore revised sev-eral times in the engineering stage (Fig. 25 is aportion of a P & I diagram). An attempt shouldbe made to review the P & I diagram with allresponsible persons (and, if possible, represen-tatives of the client). After this review, the P & Idiagram is ‘‘frozen’’ and only essential changesshould be subsequently allowed (e.g., changesconcerned with plant safety). Minor changes areoften made during commissioning; these shouldbe incorporated into the P & I diagram so that

the document reflects the ‘‘as built’’ state of theplant.

5.4.3. Apparatus and Machinery

All important process engineering data for appa-ratus (e.g., heat exchangers, reactors, towers,vessels, tanks) and machinery (e.g., pumps,blowers, compressors, turbines) are specifiedduring basic engineering. Data sheets preparedin this stage contain essential information onoverall dimensions, pressures, temperatures,quantities, materials of construction, etc., of eachpiece of apparatus and machinery. In detail en-gineering the apparatus and machinery engineerscomplete this information. The result of this workis a set of specifications in the form of drawingsand descriptions, which enable qualified manu-facturers to submit bids for apparatus andmachinery.

The equipment engineers prepare so- calledguide drawings, which are scaled drawings indi-cating all dimensions dictated by process engi-neering (e.g., number and diameter of trays in atower, spacing of trays, and tower height). Alldimensions of importance for shipping are alsoshown. Relevant legal provisions must be takeninto account. Nozzle tabulation and other impor-tant design data are attached to the guide drawing(see Fig. 26). The wall thickness is estimated sothat the weight of the apparatus can be calculatedThe number and dimensions of the nozzles, andfrequently their elevations, are stated. The hori-zontal orientation of the nozzles is determinedlater when the exact position can be ascertainedfrom the piping design.

The guide drawings and supplementary infor-mation form the technical portion of the bidinvitation, which is sent to selected manufac-turers. The information in the bid invitation mustbe presented in such a way that the bidders cansubmit comparable bids (see also Section 5.5.1).

The design office of the manufacturer pre-pares detailed workshop drawings and calculatesthe final wall thicknesses. The workshop draw-ings are checked by the engineering firm whoalso fixes the position of the nozzles and informsthe manufacturer of any changes.

Once the drawings have been approved, pro-duction can begin. The manufacturer is respon-sible for compliance with legal provisions.


Figure 25. Section of a piping and instrumentation (P & I) diagram(e.g., LIC ¼ level control; TE ¼ local temperature indicator; TI ¼ temperature indicator in the control room; TIC ¼temperature control)


Figure 26. Guide drawing for a vessel


Specialist engineers periodically inspect com-plicated equipment, even during its production.Such inspections are independent of those per-formed by a third party (e.g., one of the GermanTUV organizations or Lloyds) when mandatedby law (e.g., for pressure vessels). The equipmentis cleared for shipping only after final acceptanceby the same specialist engineers.

The specification and procurement of machin-ery are similar to that for apparatus. In contrast toapparatus, which is usually custom-built and thusindividually designed and drawn, an attempt ismade to use off-the-shelf machinery. There aretwo reasons for doing so: to minimize engineer-ing costs and to hold down the purchase price.

The machinery engineers prepare specifica-tions for every machine to be procured. Thespecifications are based on the data sheets com-piled by the process engineers, which contain allinformation relevant to the process (operatingconditions, materials of construction). As anexample, Figure 27 shows a data sheet for cen-trifugal pumps taken from the bid specification.The machinery manufacturer supplements thedata sheet with further information on the modelhe has selected for the bid.

An important element of order handling is thetime schedule according to which the machinerymanufacturer is to submit information about themachine (e.g., dimensions, weight, vibratory be-havior). It is important for the engineering firm toobtain this information as early as possible toavoid delays in the design of footings and foun-dations, buildings, and piping. Such informationshould also be finalized as soon as possible toavoid duplication of work.

For noise-abatement design see Section3.3.3.2.

Spare parts required for plant startup and thefirst two years of on-stream operation are com-monly ordered at the same time as the machinery.The manufacturer recommends the type andquantity of spares. The subsequent operator ofthe plant makes the final decision once the spe-cialist engineer has checked the bid.

5.4.4. Piping

The objective of piping design is to prepare alldrawings and specifications needed for procure-ment and installation of the piping components.

Theengineeringofpipingsystems isclosely linkedwith the engineering of all other disciplines. In theinitial phase of engineering, information is incom-plete andoften preliminary. The data become morecomplete and exact as work progresses. Becausethe need for on-time availability of piping datarequiresearly information from theother engineer-ing disciplines, a step-by-step procedure is em-ployed. Often the first steps are based on assump-tions,sothat frequentcorrectionsare required later.

Piping accounts for a relatively high propor-tion of chemical plant costs and piping engineer-ing may represent as much as 20 – 40 % of totalengineering. Refineries and petrochemical plantslie at the upper end of this range.

Piping engineering can begin once the follow-ing information (at least in preliminary form) isavailable:

1. Standards and codes (of the investor or theengineering firm)

2. P & I diagram3. Layout model4. Plot plan5. Guide drawings for apparatus6. System drawings for machinery7. Preliminary civil and structural steel drawings8. Data on electricals and control systems

Piping Specification. For the sake of effi-ciency in engineering, procurement, and pipinginstallation, and in view of the wide variety ofpiping components and design, a piping specifi-cation is first prepared. This document is basedon the standards and codes applicable to the plantand relevant engineering regulations. The pipingspecification also contains special piping designguidelines for the project.

An important element in the piping specifica-tion is the piping classification which minimizesthe different types of piping components re-quired. All piping components (pipe, fittings,flanges, bolts, seals, etc.) are classified on thebasis of flowing media, pressures, and tempera-tures that occur in the plant.

A piping class comprises the expected dimen-sions of components and their materials of con-struction for a given set of media, pressures, andtemperatures. The classification is based on pres-sure – temperature diagrams from DIN 2401 orANSI B 16.5 (see Fig. 28). Each of the areasrepresents one piping class. All components


Figure 27. Data sheet for a centrifugal pump


within one such area are uniformly sized. Fittingsand flanges are standardized according to pres-sure level. Wall thicknesses are calculated fromthe pressure and temperature. Once the pipingclasses have been worked out, the figures arestored in a data base and can be retrieved asneeded. The use of such a data base greatlyreduces the amount of work to be done in speci-fying the piping system for a plant.

Piping List. All pipe runs are identified by acode number and a piping class, and are compiledin a piping list. The associated data are stored in adata file. The piping list is prepared at the sametime as the P & I diagram.

Isometric Piping Drawings and PipingModel. Drawings that show both the geometryof the run and its location in the plant are neededfor the prefabrication and installation of piping. Itused to be common to plot every pipe run andevery fitting in a piping diagram with plan,elevation, and section views. This method hasbeen largely replaced by a diagram of a singlepipe run and its components, along with mea-surement and control devices and pipingsupports.

The initial piping studies and the finalisometric drawing of a pipe run are done inparallel with the construction of a pipingmodel. A bill of materials containing all pip-ing components is drawn up for every piperun. Figure 29 gives an example of such anisometric drawing. Computer-aided design(CAD) techniques are used increasingly inpreparing isometrics.

The isometric drawings are supplemented byplans for pipe bridges and underground piperuns.

The model shop uses the plot plan to make abasic model at 1 : 33 1/3 or 1: 25 scale thatincludes all apparatus, buildings, frameworks forequipment, stairs, ladders, platforms, and pipebridges (Fig. 30). The piping model forms thecenter for coordination of all detail designs [127].

Installation work carried out on the model inparallel with piping includes air conditioning andcable ducts, control panels, hoists, and cranes.

A piping model has the following advantages:

1. Piping routes are easy to check for collisionswith other equipment

2. The plant operator can check ease of operationand maintenance

3. The model can serve as a training facility foroperating personnel and as a form of instruc-tion during installation

The completed model should be thoroughlyassessed by all discipline engineers, the latermaintenance engineer, and the operator. Anynecessary changes made at this stage are muchless costly than if they are made later on theconstruction site.

Piping Calculations. Piping calculationscover strength calculations for individual ele-ments (wall thicknesses, flanged joints) andstress analysis of the piping system.

Wall thicknesses are calculated from the pres-sure and temperature ratings of the piping class.

The safe functioning of a piping system de-pends on correct sizing and proper layout. Spe-cial attention should be given to the elasticity ofthe piping and the use of supports and anchors.Temperature changes give rise to stresses inpiping systems, which in turn generate forcesand moments at connection and support points.Computer-aided elasticity calculations are per-formed to make certain that the strains resultingfrom stresses in a given piping layout are withinthe elastic range. If the stresses are too high, adifferent configuration must be selected or com-pensators must be inserted. For small-diameterpipes and moderate temperatures, these expen-sive calculations are often superfluous, sinceexperienced piping engineers lay out such pipingwith adequate elasticity.

Figure 28. Piping classes (pressure – temperature diagram)


Material Takeoff and Procurement. Afirst rough material takeoff can be performedwhen the P & I diagram has reached a certainlevel of completeness and the plot plan has beendrawn up so that fittings can be counted and thelengths of the main pipe runs can be estimated.The objective of this preliminary takeoff step isto invite bids and place orders for piping com-ponents with long delivery times. Sufficient ma-terial can thus be made available on site whenpiping installation begins.

As piping design advances, isometrics andpiping plans with bills of material are gener-ated. Another (not yet final) material takeoff isthen prepared and has a higher degree ofaccuracy than the preliminary takeoff. Furtherorders are then placed. At this stage, bidinvitations can be sent for the installationwork, and the piping installation contractorcan be selected. The final material takeoff is

worked out after all isometrics and pipingplans are complete.

The preparation of the material takeoffs iscomputer-aided. Sorting and condensing pro-grams calculate the quantities that have to beordered [128]. An integrated materials manage-ment system allows the print out of lists andcalculations for every step (e.g., bid invitation,ordering, expediting, and material handling onsite). The efficient use of such a system requires aconsistent high-order data structure as well as theunambiguous definition of piping components interms of piping classes.

Insulation and Coatings. The thickness ofinsulation needed on equipment and piping mustbe established at a fairly early stage since thisvalue may influence other parameters such as thelength of nozzles and the width of pipe bridges.Insulation thicknesses are entered on the P & I

Figure 29. Isometric piping drawingSymbols and designations mark piping components (e. g., valves, flanges, reducers), dimensions, position of the pipe run


diagram and in the piping list. Thermal insulationfor pipes carrying hot media generally consists ofmineral wool enclosed in galvanized or alumi-num jackets. Polyurethane foam enclosed insheet metal is widely used for pipes carryingcold media to prevent icing and cold bridges.

Uninsulated surfaces of tanks, piping, andsteel structures must be painted to protect themagainst corrosion. As a rule, machinery is deliv-ered with the specified prime and topcoats. Rustmust be removed from the surface before appli-cation of the prime coat. In many cases, a secondprime coat is needed before the first and secondtopcoats are applied.

Underground pipe is either coated with as-phalt or jacketed in plastic.

5.4.5. Control Systems [129–133]

Automation of chemical plants is increasing.Rapid progress in microprocessor technology hasled to the development of distributed controlsystems (DCS) that can meet the increasingly

stringent requirements of modern process opera-tion. The objectives are to improve the availabil-ity of operating process plants, enhance theirreliability, and optimize their operation.

The distributed functions facilitate the engi-neering, operation, and maintenance when bro-ken down into levels (Fig. 31).

Centralization of process control systemsmeans that plants are chiefly fitted with electronicdevices, since this kind of equipment with itsreliable signals is suitable, even for explosionhazard areas. Pneumatic instrumentation is lim-ited to pneumatically actuated controllers andlow-order local control loops.

With the help of process monitoring andcontrol systems, advanced control strategies canbe built up in modular form. The modules per-form both computing and dynamic functions, sothat a variety of signal processing algorithms canbe selected for optimal control strategy.

The control of material streams, plant optimi-zation, and balancing is implemented by processcontrol computers at a level above the processcontrol systems. These computers may have an

Figure 30. Piping model (fluid catalytic cracker complex, courtesy of Lurgi AG)


on-line function or a data management function.Software vendors offer appropriate modular soft-ware. Such programs are linked together to per-mit control of products by centralized programs.

Optimization programs did not gain wide useuntil stable on-line analytical instruments withshort response times were developed. The addi-tional investment is amortized after as little asone to two years. Complicated analytical sys-tems, however, have higher costs for mainte-nance, which is performed by specially trainedpersonnel.

Analytical instruments are built in prefabri-cated enclosures and tested at the vendor’s work-shop. Installation simply involves connecting theprocess loop lines, utilities, and data cables.

Plant Safety and Availability. Regulationson plant safety and environmental protectionhave rapidly become more stringent, influencingthe choice of automation hardware and systemstructure. Safety control requires the use of re-dundant systems approved by the regulatoryauthorities. Interfaces connect these systems tothe process control system, special attentionshould be paid to transmission time between thedifferent systems.

Process Monitoring and Control System.In petroleum refineries and petrochemical plants,it is often necessary to operate 3000 – 4000 loopsand give the plant operator access to these in ameaningful order.

Sensor signals relating to the process andcontrol functions, along with signals to motorcontrol centers (MCC) and valve actuators, arehandled in the processing stations, which per-form configured tasks such as signal condition-ing, control, and signal processing. The proces-sing stations are assembled from modules andtailored to individual functions. Process informa-tion is transmitted to the operating and monitor-ing system via serial busses.

The chemical plant is controlled with exten-ded software functions for graphical display,along with process graphics overlays. The hier-archical information structure of data represen-tation leads the operator to the proper level in theinformation structure. The alarm functions notifythe operator directly of the inititating measuringpoint in the process. The automation structure isgoverned by the following important criteria:

1. Size of process plant2. Continuous or batch process3. Behavior of process over time

. Steady and stable

. Product output or quality strongly affectedby load variations and/or perturbations

4. Complexity of process. Simple control strategies. Complex interdependences. Frequently changing recipes

5. Local or central process control6. Startup and shutdown strategies7. Upgradability8. Amenability to changes9. Capability of linking with automation sys-

tems at other plants, other monitoring/con-trol levels, or information systems

10. Type of reporting11. Safety, availability12. Standardization13. Environmental restrictions14. Maker and service capabilities15. Personnel considerations (crew size,

qualifications)16. Economic and management aspects

Only close collaboration between process en-gineering and process control specialists belong-ing to the staff of the engineering contractor andthe owner can ensure proper decisions.

In the central control room, the operating andmonitoring devices collect all needed processinformation. All signals from the plant (flow,pressure, temperature, etc.) are dynamically dis-played on a screen. Two to three screens perworkstation, with the necessary operating fea-tures (touch screen, light pen, keyboard), haveproved optimal with regard to cost and volume ofinformation. The process control system in-cludes reporting features that maintain a contin-uously updated record of alarm and conditionreports, series of measurements, balances, andoperator actions. Trend displays of the processvariables are replacing conventional chart recor-ders. The latter are needed only as required by theregulatory authorities (e.g., emission measure-ments) or to record guaranteed values (e.g.,temperatures in a catalyst bed).

The workstations and peripherals should bearranged so that the operator sees the wholeworking field as a closed area and operators can


exchange information in order to coordinate theiractions in case of abnormal occurrences(Fig. 32).

Engineering of Control Systems. It is use-ful to break the engineering of modern measure-ment and control equipment into field devicesand central control rooms (process control sys-tems). Different levels of detailed knowledge areneeded for these two areas. The high rate ofinnovation in process monitoring and controlsystems demands continuous retraining of thedesign engineers.

The main activities involved in engineeringfollow and make use of computer-aided engi-neering (CAE) systems with different softwarerequirements:

1. Preparation of basic documents such ascoding system, power supply and distribu-tion, materials of construction, P & I dia-grams, control strategy, functional dia-

grams for process and device control sys-tems, instrument list, quantity structure list,requirements for process measurement andcontrol system

2. Preparation of instrument specifications suchas data sheets for all instruments to be in-stalled, with information on designation ofmeasurement location, process data, man-ufacturer’s data, materials of construction

3. Engineering of process measurement andcontrol system: configuration documentation,process graphics, loop sheets, description ofprocess measurement and control system

4. Planning of central facilities such as powerdistribution, instrument cabinets, monitoringrooms

5. Preparation of installation documents such ascable run plans, cable lists, hookups, and listof installation materials

The pareparation of as-built documentsonce the plant has been commissioned and themaintenance of important documents thereafter

Figure 32. Control room, courtesy of Lurgi AG


facilitate plant maintenance and the remedyingof malfunctions.

Information on reliability, maintenance cost,spare parts management, experience, availabilityover an extended time, and service are importantfactors in the selection of instruments and sys-tems. Ease of access to instruments and systemsgreatly reduces the number of plant malfunctionsand thus increases profits.

5.4.6. Electrical Design

The objective of electrical design is to supplyelectric power reliably and economically to allconsumers. The designer does not create isolat-ed solutions component by component but mustfind the optimal solution for the system as awhole.

Design begins where high-voltage power en-ters the plant, and may include medium- and low-voltage switchgear, transformers, generators,emergency backup systems,lighting,grounding,and communications. It covers three areas:

1. Planning of power generation and distribution2. Planning of electric utilities3. Installation planning

Planning of Power Generation and Distri-bution. The operator wants to optimize use ofthe electric power and to insure that the systemcan handle short- circuit loads, that the powergrid can handle short- circuit loads, that the pow-er grid offers the necessary reliability, that in-vestment costs are minimized, and that operatingcosts are held down.

The following points therefore have to beexamined carefully in the design of the distribu-tion grid:

1. Selection of voltage levels2. Determination of transformer ratings3. Location of load centers4. Location of distribution stations (with allow-

ance for danger zones)5. Reliability of supply from electric utilities

and/or in-plant generating capacity6. Materials of construction

The elements of the electrical grid must beselected and sized. The use of powerful com-

puter programs is indispensable (to keep theconsumer list, perform short- circuit/load –flow calculations, determine the run up behaviorof motors, and carry out the sizing of cables).The results of these steps are entered in the blockdiagram.

The list of electrical consumers gives a de-tailed description of energy consumption andprovides the basis for the energy balance, inwhich the installed power and net power demandare calculated.

Planning of Electric Utilities. Once theresults of the above activities are available,documents needed for specifying the electricalutilities are prepared. These include technicalspecifications, engineering data sheets, circuitdiagrams, cable lists, terminal diagrams, andmimic diagrams. These technical procurementdocuments form the basis for bid comparisonsand order specifications. The plans are preparedby CAD methods.

Installation Planning. Electrical installa-tion accounts for a significant fraction of invest-ment costs, so detailed planning is a prerequisitefor economic execution. At this stage access to aplant model is extremely helpful.

The installation plans are drawn up by CADmethods on the basis of layout plans andcomprise:

1. Position plan for electrical consumers2. Cable run plan3. Cable run sections4. Grounding position plan5. Lighting layout plan6. Hazardous area classification7. Layout plan for communication systems

On the basis of the designs and documentsprepared, the quantities needed are determinedand bid invitations are prepared for bulk materi-als and installation. The ordered equipment isinspected at the workshops to check for compli-ance with the specifications.

The cost of electrical equipment and materi-als makes up 6 – 10 % of the total chemicalplant costs. The high end of the range appliesto grass-roots plants where a new infrastructuremust be created. For further information, see[134], [135].


5.5. Procurement

Procurement activities consist of three maintasks:

1. The purchase of plant components andservices

2. Expediting during the fabrication of plantcomponents (i.e., supervising the fabricationsequence of plant components according to anagreed time schedule)

3. The shipping of plant components to theconstruction site

In U.S. oriented regions, workshop inspectionof plant components also comes under thisheading.

Depending on the terms of the contract, theengineering firm procures plant equipment in itsown name or in the name and on behalf of theinvestor. The procurement department of anengineering firm is acquainted with the worldmarket and carefully observes trends. The pro-curement and engineering activities are closelylinked together. The purchasing and shippingagents as well as the expediters are also membersof the project team, and thus subordinate to theproject manager. Procurement man-hours makeup 8 –12 % of total engineering hours spent onproject execution.

5.5.1. Purchase of Equipment and Services

The main steps in purchasing are:

1. Preparation of a vendor list, possibly incollaboration with the investor

2. Preparation and dispatch of bid invitationsbased on requisitions written by the special-ist engineers

3. Handling queries from bidders, checking on-time receipt of bids, checking received bidsfor completeness

4. Checking bids for comparability by theengineer

5. Preparation of bid comparison and orderrecommendation by the purchasing depart-ment

6. Checking the order recommendation (bycost engineers, specialist engineers, and pos-sibly the project manager)

7. Negotiations with the assistance of the spe-cialist engineer and possibly the projectmanager

8. Preparation of order documents9. Checking order confirmation

10. Approval of bill payments after confirmationfrom the specialist engineer

11. Compilation of lists of bid invitations, bidcomparisons, and orders

Bid Invitations and Comparisons. The en-gineer responsible for a particular disciplineprepares specifications for the components heneeds in the form of data sheets, guide drawings,descriptions, and information on when each itemwill be needed. These documents are sent to thepurchasing department, which adds relevantbusiness conditions and sends the packages toselected bidders. The potential bidders are cho-sen by the responsible engineers and purchasingagents when the vendor list is drawn up. If goodsare purchased in the name and on behalf of theinvestor, the investor commonly has a say in theprocess. Good definition of equipment itemscovered by the bid invitations is important sothat bids from competing vendors are compara-ble as to content and thus price.

The above procedure is also followed in theprocurement of services. The technical docu-mentation (e.g., for installation of piping) isprepared by the specialist engineers responsiblefor piping, in close cooperation with the erectionplanning department. This documentation in-cludes the piping material takeoff, plant layout,specifications for piping installation, informationon material storage capabilities, and schedules.The received bids for plant components andservices are examined by the responsible engi-neers to insure that they are comparable andconform to the requirements stated in the bidinvitations. Bidders may often be asked to correcttheir scope of delivery and services. The bid pricemay be adjusted as a result.

Technical bid comparison is followed by com-mercial bid comparison and an order recommen-dation. Often, the final decision is only made afterverbal negotiations with two or three bidders.Decision criteria include not only lowest price butalso the technical reliability of the plant componentcovered by the bid, the experience and reliability ofthe manufacturer, and the vendor’s solvency andworkshop capacity utilization.


Orders. Especially in the case of complicat-ed plant components and large service packages,the order often goes out in abbreviated form byTelex, to make the best possible use of theagreed-on lead time. The detailed order docu-ment follows immediately. The order is preparedby computer-aided techniques so that, for exam-ple, the value of the order is transferred directlyinto the computer-aided cost control system.

If the plant components are clearly defined,the specification used for the bid invitation canalso be employed for ordering. For larger andmore complicated items, the scope of delivery orservice must be unambiguously described with astatement of exclusions. Imprecision at this pointcan result in unpleasant confrontations with thevendor. Receipt of the order is confirmed inwriting by the vendor.

5.5.2. Expediting

The engineering firm has an obligation to theinvestor to erect the plant within a certain time.The time schedule agreed between the engineeringfirm and the vendor must therefore also be com-plied with. The engineering firm establish a pro-duction schedule monitoring system for this pur-pose. Supervision begins as soon as stocks ofmaterial are ordered, it covers the manufacturer’sdesign work (workshop drawings) and other pro-duction steps. Expediters from the engineeringfirm carry out their checks by telephone calls andregular visits to material vendors and the manu-facturers of plant equipment. They report regularlyto the expediting engineer and the project manager.

When delays are expected, corrective mea-sures must be instituted in collaboration with themanufacturer (e.g., changing material vendors,weekend work, night shifts).

5.5.3. Shipping

The packaging and shipping of plant componentsto the construction site may be included in theorder given to the vendor, or may be the respon-sibility of the engineering firm. In larger projects,the engineering firm should take responsibilityfor coordinating and supervising packaging andshipping. The principal activities of the shippingdepartment are:

1. Checking the specifications for packaging,shipping, payments, and duties (these areusually part of the contract with the investor)

2. Drawing up plans for the delivery ofequipment

3. Issuing standard invoices for import licenses4. Obtaining packaging bids and issuing

orders5. Checking container lists and obtaining

transport approval for large and heavycontainers

Further activities include booking freightspace, procuring insurance, and supervisingloading and transport. Shipping, customs, andbank documents (including invoices) must alsobe prepared. Finally, damage and faults must betaken care of.

5.6. Planning and Execution of CivilWork and Erection

The main execution phases of a project up tomechanical completion (engineering, procure-ment, civil work, erection) overlap one anotherin time. The sequence of engineering workshould guarantee that

1. Plant equipment with long delivery times(e.g., compressors, complicated apparatus)can be ordered as early as possible

2. Civil work (e.g., foundations, cable ducts,buildings) is begun early so that equipmenterection is not delayed

Civil work should be begun as soon as theengineering work is 25 – 30 % complete.

By way of example, Figure 33 shows theproject master schedule for the design andconstruction of the expansion of a refinerycomplex including the progress curves forengineering and construction. The time tomechanical completion is 30 months if basicengineering (which must be performed by thelicenser) is complete at the outset. Usually thetime required for basic engineering is four tosix months. Figure 33 also shows that engi-neering office work is only complete by thetime of ‘‘mechanical completion.’’ The re-maining work includes the preparation of finaldocumentation.


5.6.1. Planning of CivilWork andErection

The planning of civil work and erection is part ofdetail engineering.

5.6.1.1. Planning of Civil Work (IncludingStructural Steel Work)

As a rule, engineering for civil work and struc-tural steel is done by engineers in the civilengineering department assigned to the projectteam. Often, however, their activity is limited tobasic civil design, while detailed civil design isassigned to engineering firms in the countrywhere the plant will be built. These firms arefamiliar with local conditions, know the localregulations, and have short lines of communica-tion to the construction site and the firm perform-ing the civil work.

Important information required at the start ofbasic civil design includes:

1. Soil evaluation report that contains, data onthe subsurface soil conditions at the plant site,water table, water analysis, and soil bearingcapacity. It should also give settlement cal-culations so that plant components subjectedto severe dynamic loads can be calculated anddesigned.

2. Data on the proposed wastewater system.3. An approved layout.4. Geological and climatic figures such as earth-

quake factor, prevailing wind direction, andsevere snow conditions.

5. Static and dynamic load data for the founda-tions of machinery, equipment, furnaces, andsteel structures.

6. Footprint dimensions of machinery andequipment: piping and cable cutouts in floors,platforms, and walls.

On the basis of this information, preliminaryplans are drawn for foundations, buildings, steel

Figure 33. Project master schedule (refinery expansion project)


frames, traffic routes, underground piping, se-wers, wastewater systems, and heating/ventila-tion/air conditioning systems. They are the basisfor detailed planning by the civil engineeringsubcontractor or in the office. Together with theestimated quantities determined for steel andconcrete, these documents are used in invitingbids. The detail engineering for structural steel isusually carried out by the structural steelsupplier.

After the submitted bids have been evaluated,the contractors for civil work and structural steelare selected on the basis of qualitative and priceaspects.

5.6.1.2. Erection Planning

Planning the installation of plant equipmentstarts at a relatively early stage in the engineeringprocess. The sequence of installation activitiescan strongly influence the detailed scheduling ofengineering and procurement. The schedule foroverall project execution should be developedbackward from the agreed mechanical comple-tion date and specifically for equipment with longdelivery times. In large plants, separate schedulesare worked out for each plant section. Erectionschedules are revised at intervals throughoutdetail engineering and procurement as the agreedequipment delivery times are incorporated intothe schedules.

Drawing up the plot plan calls for the cooper-ation of an experienced erection engineer, whomust consider in particular the erection require-ments for heavy components (space requirement,accessibility).

The land on which the plant will later bebuilt must be prepared prior to constructionwork. The planning of temporary facilities isgenerally the responsibility of the engineeringfirm. Besides surveying and leveling, it is nec-essary to plan for the delivery of utilities andthe removal of runoff and sewage. Other facili-ties include construction offices, stores, open-air storage areas, site roads, site fencing, pipingprefabrication shops, communication facilities,toilets, first-aid station, guardroom, changingrooms, and accommodation for subcontractorpersonnel.

The engineering firm subcontracts installationwork to qualified firms specializing in the erec-tion of structural steel, apparatus, machinery, and

installation of piping, electricals, and controlsystems. Subcontracting takes place in the detailengineering stage as soon as sufficiently exactinformation is available on the plant componentsand bulk materials. This is especially importantwhen installation is covered by a fixed-pricecontract.

5.6.2. Execution of Construction

The construction work performed by specialistsubcontractors is generally directed by the engi-neering firm. If the contract provides for theinvestor or a third party to do the construction,the engineering firm only supplies technical ad-visory services.

5.6.2.1. Construction-Site Organization andManagement

The construction manager and his team super-vise, coordinate, and direct construction. Re-sponsibility for all site activities belongs to theconstruction manager, as specified in the con-tract, relevant codes, and regulations. The con-struction manager is answerable to the projectmanager and is the engineering firm’s principalrepresentative to the investor on the site. Theorganization of the construction team must takeaccount of the size and complexity of the project,time schedule, local conditions, and contractualobligations.

Figure 34 shows a typical site organization fora large project. Commonly the investor maintainsa similar, but smaller organization so that dis-cussions can be carried on at all technical levels.

The main tasks of the construction site teamare:

1. To plan, coordinate, and manage all siteactivities

2. To arrange for site offices and establish sitesecurity systems

3. To organize and oversee materials manage-ment

4. To perform scheduling and progress control5. To define working methods6. To prepare and carry out quality control7. To establish and supervise work safety

procedures


8. To coordinate and oversee the work of con-struction subcontractors

9. To manage and clarify the constructiondocumentation

10. To implement a cost control system andarrange payments

11. To prepare construction-site orders12. To prepare deficiency reports and control

insurance cases13. To prepare as-built drawings14. To implement a change order management

system15. To submit reports to the investor and the

project manager16. To direct and oversee functional tests17. To initiate and direct the final plant inspec-

tion and, when the plant is mechanicallycomplete, to pass it on to the commissioningmanager or turn it over to the custody of thefuture plant operator

5.6.2.2. Time Scheduling and ProgressControl

Time Schedules. An overall constructionschedule is created during detail engineering.

This plan is continually refined as new informa-tion becomes available.

Construction work calls for more detailed,individual schedules for on-site activities, whichallow better monitoring of individual jobs andfast response to schedule changes.

Experience shows that detailed constructionnetwork diagrams are unwieldy because of thelarge quantity of data. Individual schedules foruse at the construction site are therefore usuallyprepared as bar charts that also show the inter-dependencies between the various activities.

Two types of bar charts are usually used:

1. Detail schedules for plant sections, subdi-vided according to functional disciplines.These charts form the basis for assessingprogress of work.

2. Detailed schedules for each functional disci-pline that include all plant sections. Thesecharts are used for capacity planning forconstruction personnel and their tools, equip-ment, materials, and consumables.

Progress of Work. Regular evaluation ofprogress in construction provides reliable

Figure 34. Organization of a construction team


information about the current status of the proj-ect. Schedule changes show up and measures canbe planned and carried out early enough to insureon-time completion of the plant.

Progress planning is based on a detailedschedule, list of plant components, material take-offs, and specific rating factors. A specific ratingfactor is an empirical number of hours requiredfor a specified activity (e.g., hours per tonne, m3,or piece). If there are no rating factors, the hoursrequired for stated activities are estimated inadvance.

The total number of hours thus found for eachactivity is allotted to the planned execution timefor individual activities. Expressing such allot-ments in percent allows a target progress curve tobe determined for each functional discipline ineach plant section; this curve serves as a refer-ence for monitoring construction progress.

Progress in each special discipline is evaluat-ed every two to four weeks. Activities not com-pleted at the time of progress assessment must beincluded. The activities of the special disciplinesare therefore divided into steps and evaluated. Abreakdown for above-ground piping installationserves as an example:

Prefabrication:

Pick up material 2 %

Prepare and tack parts 16 %

Weld 16 %

Fit up and weld small parts 6 %

Installation:

Transport 5 %

Install, tack 20 %

Weld 11 %

Attach clamps, supports 9 %

Inspection:

Do preliminary tests, remedy deficiencies 6 %

Pressure test, flush 7 %

Do final test and prepare report 2 %

Total 100 %

Assessments of individual operations resultfrom years of experience. The progress valuesfound for each discipline are then summarizedfor each plant section, yielding the progress foreach plant section or the plant as a whole. Thesevalues are compared with the planned targetprogress values. If there are deviations, thecauses are analyzed and appropriate measurestaken.

The progress report contains the above infor-mation and is an essential part of the regularlyupdated construction-site report.

5.6.2.3. Construction Work [123]

Work at the construction site begins with prepa-ration of the terrain. The plot must be surveyed,graded, and terraced if necessary. Access roadsmust be laid out and old structures demolished.Utilities for construction must be brought in.Construction-site offices, storage areas, andworkshops must be built. Accomodation (con-tainers) for construction personnel must beprovided.

The construction work begins with excavationand foundation work. If the soil quality necessi-tates driving piles, this must be done first. Thesequence of pouring foundations depends on theorder in which equipment is to be delivered andinstalled.

The first step in erection is the erection ofheavy equipment (reactors, towers) and steelstructures (pipe bridges and equipment support-ing frames). Very large process equipment oftencannot be shipped in one piece. Tall towers aredivided into sections, while large tanks are de-livered in the form of prefabricated pieces. Thetools needed for assembly (e.g., welding andcutting machines) and facilities for stress-reliefannealing of the welds must be provided at thesite. If possible, the delivery of heavy unitsshould be scheduled so that they can be placedon their foundations or supported in their framesimmediately. Specialists provided by the manu-facturer usually assist in the installation ofpumps, compressors, and turbines, as well as‘‘package units’’ such as refrigeration systemsand complicated conveyors; these experts latercommission the components installed.

Piping installation at a chemical plant is oftenthe most labor intensive and longest phase ofinstallation. It starts with the placement of un-derground pipelines,the mounting of straightpiping on bridges, and the prefabrication ofpiping. When the number of connection pointsto apparatus and machinery is great enough (i.e.,when the devices have been delivered and put inplace), the prefabricated piping sections are con-nected. Satisfactory progress in prefabricationand smooth installation of piping depends onskillful scheduling of the preparation of isometric


drawings and the observance of this schedule.Furthermore, the procurement of piping materialshould be scheduled so that the material forprefabrication arrives at the site on time. Com-puter-aided integrated material management sys-tems are a great help in the handling of bulkmaterial.

Weld inspection is carried out by X-ray meth-ods. Which piping is to be inspected depends onthe quality assurance specifications.

After a pipe run has been installed, it ispressurized with water to reveal any leaks. Thepressure test is documented in a report and thepiping is approved for painting or insulation.

Insulation work starts at vessels, towers, andreactors and often requires the construction ofcomplex scaffolds. Pipes should not be insulateduntil a given plant section has a sufficiently largenumber of pipe runs that have been approved forinsulation.

The installation of electronic devices andcontrol systems takes place after a section ofpiping has been completed. Devices in controlrooms and substations can, however, be installedindependent of other work as soon as the build-ings have been completed. Underground electri-cal cables are layed after piping. Electrical andpneumatic cables for measurement and controlare installed in cable ducts after the completion ofunderground work. The laying of cables on cabletrays is put off until as late as possible to preventdamage during simultaneous piping installation.The same applies to the installation and junctionsof field instruments.

Furnaces are lined with refractories beforeshipping to the site or on site. Trays are installedin towers after access to the towers has beenprovided by platforms and ladders. Lightningprotection and grounding wires are installed atan early stage, during the fill work of foundationexcavations.

Functional tests of the installed equipmentmark the end of erection work. These tests aredone with the plant in the cold condition and withno product.

The contract must precisely define ‘‘mechan-ical completion,’’ since the contractual obliga-tions of the engineering contractor to the inves-tor often end at this point. Responsibility for thecommissioning of the plant may lie with theinvestor, the licenser, or the engineering con-tractor. Generally speaking, a plant is mechani-

cally completed when subsequent commission-ing will not be delayed or disrupted by installa-tion work and that the safety of the plant is fullyguaranteed.

The certificate of mechanical completion isusually accompanied by a ‘‘punch list’’ thatdefines all installation work that is still outstand-ing and to be done in the commissioning phase.The certificate is generally granted when thefollowing activities have been performed:

1. Pressure testing of equipment and vesselswith air, water, or nitrogen

2. Purging and, if necessary, chemical cleaningand pressure testing of piping

3. Testing of stress-free piping connections tomachinery and checking of rotation directionand coupling seating

4. Brief trial run of pumps (with water) and ofmachinery and motors (as possible withoutproduct)

5. Calibration of measuring instruments, alarms,interlocks, and cutoff points

6. Functional checking of electrical equipmentand control systems

Figure 35 shows a three-train reformer plantunder construction.

5.7. Commissioning

5.7.1. Plant Design and Commissioning

Commissioning must be considered even duringbasic and detail engineering in the design ofequipment, piping, and control systems. Faultyprocess design can have serious effects on thetime required for commissioning and the amountof corrective work needed. The start of produc-tion may be significantly delayed and the ownermay suffer a substantial loss of production andrevenue.

Difficulties in commissioning and causes ofdelays have been identified as [136]:

26 – 29 % faulty design

56 – 61 % failure of plant components

13 – 15 % errors by operating personnel


Commissioning costs as a percentage of totalplant investment are:

5 – 10 % for established processes

10 – 15 % for relatively new processes

15 – 20 % for novel processes

Commissioning should be a special consider-ation when the piping and instrumentation dia-gram is designed. A commissioning engineerwith relevant experience should be brought induring the planning work. This engineer shouldprepare the complete operating manual whichshould be available before the final version of thepiping and instrumentation diagram.

The experienced commissioning engineeralong with specialists (and maintenance engi-neers) working for the future plant operatorshould also be involved in checking the pipingmodel. Errors in pipe routing and poor access forthe servicing, installation, and removal of equip-ment can thus be remedied at an early stage.

5.7.2. Operating Manual

The operating manual is a condensed ‘‘referencebook’’ for the entire plant. It should contain allimportant details about the design and opera-tion. The typical contents of an operating man-ual for a chemical plant follow [123], [136],[137]:

Part I. Operating Instructions1. Design PrinciplesStatement of the type, purpose, and capacity of

the plant; specification of quality and quanti-ties of feedstocks and products (includingwaste streams); utilities and consumables.

2. Description of the Process and the Plant2.1. Description of the process with its princi-

ples (e.g., chemical and physical principles ofthe process stages). The process itself is dem-onstrated by process flow diagrams showingequipment, machinery, and instruments andimportant process conditions.

Figure 35. Reformer plant during construction, courtesy of Lurgi AG


Auxiliary systems such as refrigeration, steam, orslop (wastewater) systems are similarlyshown. The delivery and disposal of utilitiesand consumables is also discussed.

2.2. The plant description covers the designs ofthe individual plant sections, the functions oftheir components, and the control of the in-stalled unit operations.

2.3. Material balances.2.4. Process principles and guidelines for plant

operation explain the theoretical basis of theprocess, as well as the process variables andtheir effects on product quality or composi-tion. Diagrams, formulas, nomographs, andtables allow estimation of these variables(e.g., raw-materials composition, cooling wa-ter temperatures).

3. Special EquipmentThis chapter contains an in-depth description of

special-purpose or critical equipment (e.g.,reactors, compressors, turbines). A subchap-ter deals with particularly important or com-plex control loops or interlockings and emer-gency shutdown systems.

4. Preparation of the Plant for CommissioningThis chapter lists the preparatory steps required

for commissioning (e.g., flushing, cleaning,and neutralizing of piping, equipment, andplant sections; inspections; pressure and leaktests; inspection of safety devices; mechanicaltests of machinery; drying of furnace refrac-tory or reactor linings; and specifications forcharging catalysts and consumables).

5. Plant StartupAn outline of the overall plan for starting up the

plant is first given. All startup operations arethen described in detail step-by-step. Specialprecautions and unusual design conditions arehighlighted.

The startup instructions are broken down asfollows:a. Initial startup after installation is complete.b. Startup after a prolonged shutdown.c. Restart after a brief shutdown when the

plant is still warm.d. Procedures for catalyst regeneration or

replacement.e. Measures to be taken after abnormal oc-

currences. Possible disturbances are listedtogether with their effects and countermea-sures. This section discusses how to reme-dy problems during operation; how to keep

plant sections in operation while problemsare being remedied; and how to performrestart afterward.

6. Plant ShutdownThis chapter describes procedures for planned

and unplanned shutdown of the plant. It issubdivided as follows:a. Partial shutdown for periodic catalyst re-

generation or removal of cracking depositsfrom furnace tubes

b. Procedure for brief shutdownc. Procedure for extended shutdownd. Shutdown on utilities outagee. Emergency shutdown and special

precautions

7. Analysis SpecificationsAnalysis specifications: required or recom-

mended number of analyses during commis-sioning under steady-state operating condi-tions and exceptional operating conditions.

8. Operating ReportThis chapter describes which data are to be

recorded during plant operation. A standardform for reporting during steady-state opera-tion or commissioning is recommended.

9. Safety PracticesThe safety regulations are summarized. Potential

hazards are discussed, and the behavior of theoperating personnel is recommended or pre-scribed. Information about safety facilitiesand the locations of first-aid stations is given.

10. MiscellaneousList of blinds, setpoints for alarm and switching

functions.Part II. Drawings and Equipment

Specifications1. DrawingsThis chapter contains drawings that relate to the

process or to the plant as a whole:a. Process flow diagrams and P & I diagramb. Plant layout planc. Underground pland. Selected overall drawings of important

equipment (e.g., reactors)

2. SpecificationsEquipment design specifications are compiled.

Relevant drawing numbers, technical pro-curement specifications, and other documentscontaining supplementary information arealso noted.


3. EquipmentManufacturersOperating Instruc-tions

Part III. Technical Documentation andDrawings

Manuals are prepared for each engineering dis-cipline. These manuals show all specificationsand drawings relating to plant componentsand their operation and maintenance.

5.7.3. Responsibility and Organization

Responsibility for commissioning generally lieswith the party granting the process license: theinvestor/owner, licenser, or the engineering firm.The commissioning team is led by the commis-sioning manager. The key positions are occupiedby experienced startup engineers. Startup opera-tion goes on around the clock, so that an adequatenumber of startup engineers must be available forshift work.

In large plants involving two or more processsteps, it is desirable to break the plant down intosections and assign responsibility for each to asmaller startup team.

On mechanical completion of the plant mostof the installation personnel leave. Some special-ist engineers remain on site, however, especiallythose involved with piping, electricals, controlsystems, and machinery, who solve problemsthat arise during commissioning.

The actual manual commissioning activitiesare generally performed by personnel of theoperator who have already gone through class-room training. The operating personnel can oftenbe trained in similar plants operated by associa-ted firms.

5.7.4. Preparation for Commissioning

The commissioning manager must ensure thatthe plant is supplied with the necessary quantitiesand qualities of feedstocks, utilities, consum-ables, and energy in time for the planned startof commissioning. Spare parts and a fullyequipped repair shop must also be available. Thecooperation of specialists provided by the man-ufacturers is essential for the commissioning ofcomplicated equipment (e.g., compressors, re-frigeration plants).

The plant laboratory has a vital function dur-ing commissioning. Analytical data are an im-

portant input to process control. Sampling andanalysis programs must be prepared and dis-cussed with the laboratory.

The commissioning team should be present onsite during the final installation phase. While theinstallation team performs function tests, thecommissioning engineers perform a detailedcheck of the plant, focusing on process designand operation (e.g., inspection of towers, inter-nals, and control systems). Changes requested bythe commissioning team can then be carried outby the installation team.

When the commissioning manager is con-vinced that the plant is ready for operation, hetakes over responsibility for further activitiesfrom the erection management.

5.7.5. Plant Startup

The measures described in Sections 5.7.3 and5.7.4 apply to chemical plants in general, where-as activities during the initial startup of a plantdepend on the type of process.

Commissioning takes place step by step asspecified in the operating manual. The first unitsto be started are utilities and off-sites (e.g., cool-ing water loop, steam generation). At the sametime, lined furnaces are dried and heated inaccordance with the vendor’s specifications. Thecatalyst is charged, reduced when necessary, andbrought up to reaction temperature. Plants inwhich combustible media circulate must bepurged with inert gas so that they are oxygen-free before charging. Steam lines must be care-fully dewatered.

All measurements are recorded and balancesare run so that incorrect behavior of the plant canbe quickly detected and corrective measuresinstituted.

Initial disorders are almost always encoun-tered: these result, for example, from utilitiesoutages, mechanical damage, and hot running ofbearings or stuffing boxes. An attempt should bemade, however, to get the plant running first andstart up all systems, provided the safety of per-sonnel and equipment is not endangered. Thedefects can then be remedied during the firstscheduled shutdown of the plant.

After operation has stabilized, conditions areoptimized. When the planned values of productquantity and quality, utilities consumption etc.,


have been attained, the guarantee test is carriedout. Guarantee values and conditions for per-forming the guarantee test are stipulated in thecontract.

If the test results are satisfactory, a report forhandover of the plant to the owner is signed.Responsibility for the plant and its operation nowshifts to the owner. Any defects still to be re-medied are entered in a punch list and a deadlinefor corrective action is established. Generally theservice life of plant equipment is guaranteed for afurther, contractually agreed period (parts sub-ject to wear are usually exempt from this guar-antee). Whether this guarantee is the responsi-bility of the manufacturers or the engineeringfirm depends on the contract. Figure 36 showspart of a plant complex for olefin production.

6. Computer Support

Most engineering contractors have investedheavily in computerization, with the emphasis

on computer-aided design (CAD), computer-aided engineering (CAE), design calculations,data-base management,and office communica-tion sys-tems [138]. Decisions on the use of suchsystems, in particular CAD and CAE, are drivenby benefits, chiefly reductions in costs and turn-around times, gains in the transparency of meth-ods used, and systematic support for projectprocedures.

6.1. Role of Computers in ProjectExecution

A variety of systems based on discrete and closedmathematical models are employed in processengineering for the simulation and design ofprocesses. They can be accessed from mainframecomputers, workstations, or personal computers(PCs).

For special processes, firms use internallydeveloped programs and modules based on stan-dard PC software. Internationally recognized

Figure 36. Section of an olefin complex, courtesy of Lurgi AG


simulation programs are employed to preparemass and energy balances and to optimizeheat-exchanger systems. Powerful systems arealso available for computer-aided process analy-sis in large plants, dynamic simulation, and plantoptimization.

Project management uses computer softwarewith a high degree of integration for scheduling,cost planning, and project control. These systemsare generally accessible on both mainframes andPCs.

The specific applications of computer systemsvary. Graphical documents (e.g., process flowdiagrams, P & I diagrams, loop diagrams) areprepared with CAD systems which are beingincreasingly linked to engineering data bases.Two-dimensional design instruments are inwidespread use for site layout planning and plantde-sign; three-dimensional design systems areoccasionally used in special piping-intensiveprojects [139].

The advantages of graphics in plant design arethe consistent and systematic use of models andoverlays and the reuse and evaluation of graphi-cal elements with variable intelligence [140].

CAD use improves collaboration betweenindividual disciplines. For example, if plant andcivil engineering both use the same CAD system,plant design can be optimized ‘‘at the source.’’

Engineering calculations can be performedwith PC programs developed in-house or withinternationally recognized standard softwareproducts.

Standard systems are predominant in directdaily use by engineers. In subfields, such asfinite-elements design, tasks are delegated tospecialists who can perform optimizations withspecial computer tools.

Every step in the procurement of equipment iscomputer-aided. All data and functions are inte-grated into a system that performs bid invitation,bid comparison, ordering, expediting, and ship-ping. Relevant data are available not only to thecost control system but also to accounting. As arule, the entire accounting process is alsocomputer-aided.

Specialized relational data-base systems arewidely used in the procurement of plant compo-nents and bulk materials. These systems arelinked by interfaces.

Administrative functions are supported byintegrated office communications systems. Cler-

ical staff work with PC support connected to laserprinters.

6.2. EDP Infrastructure and Systems

Progressive engineering companies strive forcomplete system integration so that engineering,commercial, and management data can be uti-lized in interlinked modules. In addition to main-frame computers, PCs are increasingly used forindividual support at engineering workstations.

The growing demand for ‘‘distributed intelli-gence’’ and advances in computer capabilitiesare now leading to the use of interconnected,decentralized workstations with alphanumericapplications (data bases, calculations) and graph-ical ones (CAD). Extensive standardization ofthe data-processing infrastructure is desirable.

The variety of software systems used in proj-ect execution are illustrated by the followingexamples:

Design Calculations.Many software systemsare developed in-house for the process design andengineering of plant equipment. The followinggeneral-purpose programs are also commerciallyavailable:

PROCESS, ASPEN PLUS simulation programs, flow sheeting

SDC material data compiler

HTRI design of heat exchangers

ROHR2 strength calculations for piping

PROBAD/FEZEN strength calculations for apparatus

ANSYS, STRUDL finite-element method (FEM)

programs for structural analysis and

material and heat flow

Data-Base Management Systems. The fol-lowing list includes systems developed by Lurgifrom relational data-base systems:

ANSY mechanical equipment

LUPREA electrical equipment

MASY control systems

MVS/LUROMAK piping

DISPO disposition of bulk materials

MOSY management of materials on-site

BISAM bid invitation and ordering

VERONA shipping

ATERM expediting

KAPAZ capacity planning

KOKO cost control

DOSY documentation and archiving

REPRU accounting


Graphics. Standard systems for graphics ap-plications include:

CADAM/AEC two- and three-dimensional

plant layout and design

INTERGRAPH/IGDS, CADEX preparation of P & I diagrams

AUTOCAD preparation of P & I diagrams

in special fields

6.3. Coordination and Interfaces

Growing importance is now attached to the fast,error-free transfer of information generated incomputer-aided operations of the engineeringfirm during project execution, to the owner andto engineering partners (and vice versa). Accord-ingly, the partners must arrive at a good under-standing as to the content of documents and datafiles to be transmitted; standards and codes (datastructures, nomenclature, symbols); and dataformats and EDP procedures.

The definition of interfaces between two dif-ferent EDP systems is an important factor in datatransfer. Standardization of interfaces to a reli-able extent does not yet exist for plant design andconstruction. Various engineering companieshave devised interfaces for two-dimensionalplant layout and design so that drawing data canbe flexibly transmitted to any computer system.

7. Quality Assurance

The primary goal in the design and constructionof chemical plants is to satisfy quality require-ments. These are defined by agreement betweenthe investor and the engineering contractor, bylegal regulations, and by objectives set by theengineering firm. The quality requirements aregenerally specified in the contract between theinvestor and the engineering firm.

Quality assurance is ensured by installation ofrelevant systems. These quality assurance sys-tems cover all technical and organizational prac-tices needed to achieve the desired quality.

Requirements for quality assurance systemsare defined in standards. The international stan-dards ISO 9000 – 9004 have already been incor-porated into most national standards systems[141]. Increasing numbers of quality assurancesystems have been developed, introduced, and

documented in production and service compa-nies. Certification of these quality assurance sys-tems by neutral organizations is in development.

The idea behind the creation of quality assur-ance systems is that the quality of a productshould not only be established after its produc-tion, but rather that the entire production processshould be subjected to appropriate quality assur-ance practices on a phase-by-phase basis. Qualityassurance practices must be defined and imple-mented for all services performed by the engi-neering firm itself (e.g., project management,engineering, procurement, supervision of con-struction, commissioning).

The company quality assurance system is usu-ally documented in a ‘‘quality assurance manual’’which contains information on organizationalstructure and processes, as well as the procedures,means, and methods used to assure quality. It mayalso include references to internal procedures andwork instructions which are not part of the manual.

The manual gives the owner and third parties asummary of the company’s quality policy andquality system. It is also an instrument for com-municating the company’s quality policy to man-agement and employees.

A typical table of contents follows:

1. Quality policy of the company2. Brief description of the company3. Elements of quality assurance:

Management tasksCompany quality assurance systemMarketingResearch and development, engineering,project managementDocumentationProcurementFabrication, civil work, erection, commissioningMeasuring and test equipment, inspectionstatus, corrective actionQuality recordsInternal quality auditsEducation and training

The quality assurance system must not beregarded as a fixture that schematizes all proce-dures – it needs to be continuously improved inthe light of practical knowledge.

An engineering firm does not usually have itsown fabrication capacity or perform construc-tion services. Equipment as well as construction


and installation services must therefore be pro-cured. Suppliers of equipment and firms perform-ing construction work must demonstrate theirown quality assurance systems to the engineeringfirm and allow them to be verified. In addition tothis, employees of the engineering firm monitorthe fabrication of equipment and the constructionwork in accordance with established rues toensure that delivery and performance are inaccordance with quality requirements andplanned schedules. Such supervision does not,however, release a manufacturer or a construc-tion contractor from its contract obligations.

In the normal case, a project can be executedand meet the quality requirements if the provi-sions of the quality system are satisfied. In com-plicated projects or those involving a high degreeof risk or innovation, a quality assurance planmust be drawn up [142]. This sets forth in detailthe quality practices to be followed during exe-cution of the project. A quality assurance man-ager is designated for the project who, afterconsultations with the project manager and theheads of the functional divisions, directs thequality assurance activities. He is independentof the project team, reports directly to companymanagement, and confers with the investor on allquestions of quality assurance.

Many quality assurance practices are involvedin the execution of a project, a few examplesfollow:

1. Checking contracts against checklists2. Defining the degree of checking of technical

specifications and drawings for equipment3. Implementing design change control4. Instituting design reviews to check, for exam-

ple, process flow diagrams, layout plans, pip-ing and instrumentation diagrams, and pipingmodels

5. Selecting competent manufacturers for criti-cal equipment

6. Identifying ‘‘hold points’’ and intensity ofinspection for equipment during fabrication

Quality obtained on the basis of an assurancesystem ‘‘tailored’’ to the company results inseveral important benefits:

1. After consultation of quality assurance docu-ments, the customer of a production or service

company can convince himself of thecompany’s ability to achieve the agreed-onquality of the product or service

2. A company’s quality assurance systems, ex-amined and certified by a competent neutralorganization, can mean a competitiveadvantage

3. If a quality assurance system is organized in ameaningful and expedient manner, agreed-onquality of a product can be obtained at lowcost and with little expenditure of time

Quality assurance practices must already beapplied, for example, during the design stage fora piece of plant equipment. Expensive post-fabrication corrections on a wrongly specifieddevice are then avoided.

8. Training of Plant Personnel

Preliminary Planning. The people who areto operate and maintain a chemical plant musthave the necessary theoretical background, prac-tical training, and know-how.

This applies in particular to personnel indeveloping countries, who should participate inspecially developed know-how transferprograms.

Many owners and operators of chemicalplants write into their contracts with engineeringfirms the transfer of operating and maintenanceknowledge to their specialists, supervisors, en-gineers, and technicians. Training covers techni-cal and commercial jobs as well as middle andupper management.

The following questions should be explored atthe feasibility study stage:

1. What level of education exists in theregion?

2. Will skilled labor be available in the region?3. Is the project a newly-built plant or an expan-

sion of an existing facility?4. If it is an expansion, can skilled operating

personnel be found?5. Is the plant a labor-intensive production fa-

cility or one that can run automatically?6. Can the plant operate autonomously (e.g., in a

virgin forest area or on an island) or does itrequire an industrial infrastructure?


Training Plan. The training plan must beadapted to the needs of the plant and its surround-ings and should be workable regardless of theinitial qualifications of the workers being trained.It should also convey state-of-the-art knowledge.

The training plan comprises organizationalcharts, job descriptions, definition of minimumqualifications of future jobholders, training sche-dules, and identification of facilities for practicaltraining. It may also include administrative to-pics (e.g., how to obtain a visa and residence andwork permits, assistance in finding accomoda-tion, where to get work and safety clothing,personal insurance and medical care during thetraining period).

The planning documents provide a basis forhiring tests and results are compared with theprofile of requirements in the job descriptions.The tests should pose and evaluate technical andmanagement skills questions. If necessary, aninstitute or an industrial psychologist can bebrought in.

Execution of Training. Every participantshould receive a training schedule in which thesubject, day/time, and discussion partner or in-structor are listed.

Training should take place as late as possibleso that there is no lag between training and jobassignment (fluctuation danger). However, train-ing activities should be started early enough sothat the future operator’s personnel can see theirown plant demonstrated in the final installationphase and can perform some functions them-selves. This improves their sense ofresponsibility.

The training program is usually broken downas follows:

Phase I. Presentation of basic information about the plant.

Phase II. Presentation of generally important instructions on

plant operation, maintenance of machinery, safety

practices, and organization.

Phase III. The trainees are divided into operating personnel,

maintenance personnel, and administrative and

management personnel. When possible, these

groups are trained on the same or similar facilities

for the jobs they will later perform.

Phase IV. During the final phase of installation, the plant

personnel familiarize themselves in depth with their

own plant. The training period ends with active

participation in plant commissioning.

Training Costs. Training costs comprisepersonnel, nonpersonnel, and incidental costs.

Personnel Costs are incurred for the peoplewho prepare, execute, and coordinate training, aswell as the trainees salaries. Nonpersonnel costsinclude payments to the operators of facilitieswhere training takes place and the outfitting oftraining rooms on the construction site. Inciden-tal costs comprise costs for accomodation, travel,work clothing, insurance, and utilities. Thesemay make up a significant fraction of total costsif the trainees are sent abroad.

References

1 H. Popper: Modern Cost Engineering Techniques,

McGraw-Hill, New York 1970.

2 H. K€olbel, J. Schulze: Der Absatz in der chemischen

Industrie, Springer-Verlag, Berlin 1982.

3 J. T. Thorngren: ‘‘Probability Technique Improves In-

vestment Analysis,’’ Chem. Eng. Cost File, vol. 9,


4 D. J. Massey, I. H. Black: ‘‘Predicting Chemical Prices,’’

Chem. Eng. Cost File, vol. 11, McGraw-Hill, New York

1969.

5 J. Jung: ‘‘Globale Vorausberechnung von Investitions-

kosten,’’ in GVT-Hochschulkurs: Angewandte Kosten-

und Wirtschaftlichkeitsberechnungen bei der Projek-

tierung verfahrenstechnischer Anlagen, University of

Dortmund 1984, 90 – 114.

6 V. D. Herbert, A. Bisio: ‘‘The Risk and the Benefit,’’

part 2, CHEMTECH 6 (1976) no. 7, 422 – 429.

7 H. K€olbel, J. Schulze:Projektierung und Vorkalkulation

in der Chemischen Industrie, Springer-Verlag, Berlin

1982.

8 J. E. Haselbarth: ‘‘Updated Investment Cost for 60 Types

of Chemical Plants,’’ Chem. Eng. (N. Y.) 74 (1967)

Dec. 4, 214.

9 K. M. Guthrie: ‘‘Capital and Operating Cost for 54

Chemical Processes,’’ Chem. Eng. (N. Y.) 77 (1970)

June 15, 140 – 156.

10 J. Jung: ‘‘Detaillierte Vorausberechnung von Investi-

tionskosten,’’ inGVT-Hochschulkurs: Angewandte Kos-

ten- und Wirtschaftlichkeitsberechnungen bei der Pro-

jektierung verfahrenstechnischerAnlagen,University of

Dortmund 1984, pp. 115 – 137.

11 F. Strailk: ‘‘Das Verfahrensschema als Grundlage bei der

Planung in der chemischen Technik,’’ Chem. Appar. 92

(1968) 419 – 434.

12 H. C. Lang, Cost Engineering in the Process Industries,

McGraw-Hill, New York, 1960, pp. 7 – 14.

13 C. H. Chilton, Chem. Eng. (N. Y.) 73 (1966) 184 – 190;

C. H. Chilton: Cost Engineering in the Process Indus-

tries, McGraw-Hill, New York 1960.


14 W. E. Hand, ‘‘From Flowsheet to Cost Estimate,’’ Pet.

Refin. 37 (1958) 331.

15 W. Burgert ‘‘Kostensch€atzung mit Hilfe von Kosten-

strukturanalysen,’’ Chem-Ing.-Techn. 51 (1979) 484 –

487.

16 C. A. Miller: ‘‘Factor Estimating Refined for the Appro-

priation of Funds,’’ Chem. Eng. Cost File, vol. 7,


17 K. M. Guthrie: ‘‘Date Techniques for Preliminary Cap-

ital Cost Estimating,’’ Chem. Eng. (N. Y.) 76 (1969)

Jan. 13, 138;76 (1969) March 24, 114 –142;76 (1969)

April 14, 201 – 216. Chem. Eng. Cost File, vol. 11,


18 Chemical Engineering, McGraw-Hill, New York –

D€usseldorf, published monthly.

19 Chemische Industrie, Verlag Handelsblatt, Frankfurt am

Main (published monthly).

20 P. M. Kohn: ‘‘CE Cost Indexes Maintain 13-Year As-

cent,’’ in:ModernCost Engineering:Methods andData,


21 J. Schulze: ‘‘Modernisierter Preisindex f€ur Chemieanla-

gen,’’Chem. Ind. (D€usseldorf)32 (1980) no. 10, 657 – 663.

22 J. Jung: ‘‘Globale Vorausberechnung von Betriebskos-

ten,’’ in GVT-Hochschulkurs: Angewandte Kosten- und

Wirtschaftlichkeitsberechnungen bei der Projektierung

verfahrenstechnischer Anlagen, University of Dort-

mund 1984, pp. 90 – 114.

23 J. T. Sommerfeld, C. T. Lenk, Chem. Eng. 77 (1970)

May 4, 136 – 138.

24 H. Gaensslen, Chem. Ing. Tech. 48 (1976) no. 12,

1193 – 1195.

25 F. C. Vilbrandt, C. E. Dryden: Chemical Engineering

Plant Design, McGraw-Hill, New York 1959.

26 ICI ‘‘Factest,’’ Eur. Chem. News 21 (1972) March 17,

32.

27 ASPEN: TECHNOLOGY ASPEN plus Costing Manu-

al, Cambridge 1984.

28 M. S. Peters, K. D. Timmenhaus: Plant Design and

Economics for Chemical Engineers, McGraw-Hill, New

York 1980.

29 Verband der chemischen Industrie: Kostenrechnung in

der Chemischen Industrie, Gabler, Wiesbaden 1962.

30 R. I. Reul: ‘‘Which Investment Appraisal Technique

Should You Use’’? Chem. Eng. Cost File, vol. 10,

McGraw-Hill, New York 1968. W. R. Park: ‘‘The

Investment Profit-Prophet,’’ Chem. Eng. Cost File,

vol. 10, McGraw-Hill, New York 1968.

31 D. Spethmann: ‘‘Flexibilit€ats€uberlegungen bei Investi-

tionsprogrammen,’’ Vortrag auf dem 22. Deutschen

Betriebswirtschaftler Tag, Deutsche Gesellschaft f€ur

Betriebswirtschaft, Berlin 1971.

32 H. Jonas: Investitionsrechnung, De Gruyter, Berlin 1964.

33 J. Leibson, C. A. Trischmann: ‘‘When and How to Apply

Discounted Cash Flow and Present Worth,’’ Chem. Eng.

(N. Y.) 78 (1971) Dec. 13, 97 – 106.

34 A. Fletscher, G. Clarke: Mathematische Hilfsmittel der

Unternehmensf€uhrung, Verlag W. Dummer & Co.,

M€unchen 1966.

35 H. M€uller-Merbach: ‘‘Operations Research/Rev. 1,’’

Methoden und Modelle der Optimalplanung, 3rd ed.,

M€unchen 1973.

36 H. F. Rase, M. H. Barrow: Project Engineering of

Process Plants, J. Wiley, New York 1957.

37 B. Aggteleky: Fabrikplanung, Hanser Verlag, M€unchen

1987, 1990.

38 E. Mach:Planung und Errichtung chemischer Fabriken,

Sauerl€ander, Frankfurt 1971.

39 A. Franke: ‘‘Risk Analysis in Project Management,’’ Int.

J. Project Management 5 (1987) no. 1, 29 – 34.

40 A. Jaafari: ‘‘Management Know-how for Project Feasi-

bility Studies,’’ Int. J. Project Management 8 (1990)

no. 3, 167 – 172.

41 W. T. Nichols, Ind. Eng. Chem. 43 (1951) no. 19, 2295.

42 American Association of Cost Engineers: A Guide to

Capital Estimating (1988) 14.

43 R. J. Loring: ‘‘Cost of Preparing Proposals,’’Chem. Eng.

(N. Y.) 77 (1970) Nov. 16, 126.

44 P. Grassmann: Physikalische Grundlagen der Chemie-

Ingenieur-Technik, Sauerl€ander, Frankfurt 1983.

45 E. U. Schl€under: Heat Exchanger Design Handbook,

Hemisphere Publ. Corp., Washington 1983.

46 J. H. Perry: Chemical Engineers Handbook, McGraw-

Hill, New York 1984.

47 McGraw-Hill, New York: L. Clarke, R. L. Davidson:

Manual for Process Engineering Calculations, 1962; E.

W. Comings: High Pressure Technology, 1956; D. L.

Katz: Handbook of Natural Gas Engineering, 1959; A.

L. Kohl, F. C. Riesenfeld:Gas Purification, 1960; W. L.

Nelson: Petroleum Refinery Engineering, 1958; M. van

Winkle: Distillation, 1967. H. Harnisch, R. Steiner, K.

Winnacker: Chemische Technologie, C. Hanser Verlag,

M€unchen 1984.

48 Gulf Publ. Co., Houston: R. N. Watkins: Petroleum

Refinery Destillation, 1979; E. E. Ludwig: Applied

Process Design for Chemical and Petrochemical Plants,

1964.

49 R. H. Perry: Perry’s Chemical Engineers’ Handbook,


50 K. Weissermel, H.-J. Arpe: Industrial Organic Chemistry,

VCH Verlagsgesellschaft, Weinheim, Germany 1993.

51 L. B. Evans: Foundations of Computer-Aided Chemical

Process Design, vol. 1, Engineering Foundation, New

York 1981, 425 – 469.

52 R. Raman: Chemical Process Computations, Elsevier

Appl. Sci. Publ., London 1985.

53 DECHEMA, DETHERM-SDC (Stoffdaten-Compiler),

Frankfurt, updated regularly. Design Institute of Physi-

cal Property Data (DIPR), American Institute of Chemi-

cal Engineers (AIChE), DIPPR Data Compilation, up-

tated regularly. Thermodynamics Research Center

(TRC), Vapor Pressure Datafile, updated regularly.

54 Landolt-B€ornstein: Zahlenwerte und Funktionen aus

Naturwissenschaft und Technik, Springer-Verlag, Berlin

1985.

55 D’Ans-Lax: Taschenbuch f€ur Chemiker und Physiker,

Springer-Verlag, Berlin 1970.


56 D. Behrens, R. Eckermann: Chemistry Data Series,

DECHEMA, Frankfurt 1977 ff.

57 M. Munsch, T. Mohr, E. Futterer, Chem. Ing. Tech. 62

(1990) 995 – 1002.

58 D. W. Townsend, B. Linnhoff, AIChE J. 29 (1983)

742 – 771.

59 M. A. Duran, I. E. Grossmann, AIChE J. 32 (1986)

123 – 138.

60 B. Linnhoff: ‘‘New Concepts in Thermodynamics for

Better Chemical Process Design,’’Chem. Eng. Res. Des.

61 (1983) 207 – 223.

61 B. Linnhoff: ‘‘W€arme-Integration und Pro-

zeßoptimierung,’’ Chem. Ing. Tech. 59 (1987) no. 11,

851 –857.

62 A. W. Westerberg, Comput. Chem. Eng. 13 (1989)

365 – 376.

63 V. Hlavacek, Comput. Chem. Eng. 2 (1978) 67 – 75.

64 N. Nishida, G. Stephanopoulos, A. W. Westerberg,

ALChE J. 27 (1981) 321 – 351.

65 A. W. Westerberg, Comput. Chem. Eng. 9 (1985)

421.

66 G. Hosemann: ‘‘Methodisches Grundkonzept tech-

nischer Sicherheit,’’ DIN-Mitteilung 70, no. 3, Beuth

Verlag, Berlin 1991.

67 E. Tr€oster: ‘‘Sicherheitsbetrachtungen bei der Planung

von Chemieanlagen,’’ Chem. Ing. Tech. 57 (1985) no. 1,

15 – 19.

68 Bundes-Immissionsschutzgesetz vom May 14, 1990

(BGBl I, 880)

69 Zw€olfte Verordnung zur Durchf€uhrung des Bundes-

Immissionsschutzgesetzes (St€orfallverordnung) vom

September 20, 1991 (BGBl I 1991, 1891)

70 Gewerbeordnung, Jan. 1, 1987 (BGBl. I, 1987, 925).

Amended by Gesetz zur €Anderung der Gewerbeord-

nung, April 5, 1990 (BGBl. I, 1990, 706) and Gesetz

zur €Anderung der Gewerbeordnung Nov. 9, 1990

(BGBl. I, 1990, 2442)

71 Bundesnaturschutzgesetz (Mar. 12, 1987) Bundesge-

setzblatt (BGBl) I (1987), 889.

72 G. Hohe: ‘‘Sicherheitsabst€ande – Definition und

Bedeutung in Rechtsvorschriften und Technischen Re-

gelwerken,’’ Berichtsband zum BPU-Seminar: ‘‘Sicher-

heitsabst€ande bei Planung und Betrieb industrieller

Anlagen,’’ BPU GmbH, Berlin 1990.

73 Gesetz zur Umsetzung der Richtlinie des Rates, June 27,

1985 Concerning environmental compatibility testing in

public and private projects (85/337/EWG). (BGBl. I,

1990, 205).

74 Gesetz €uber die Umwelthaftung, Bundesgesetzblatt

(BGBl) F (1990), 2634.

75 Abst€ande zwischen Industrie- bzw. Gewerbegebieten

und Wohngebieten im Rahmen der Bauleitplanung

(Abstandserlaß), Minister f€ur Umwelt, Raumordnung

und Landwirtschaft, March 21 1980 (MBl.NW, 504 /

SM Bl. NW, 283).

76 Erste Allgemeine Verwaltungsvorschrift zum Bundes-

Immissionsschutzgesetz (Technische Anleitung zur Re-

inhaltung der Luft – TA Luft), Feb. 27, 1986.

77 DIN 52 900, Feb. 1983, DIN Safety Data Sheet for

Chemical Substances and Preparations, Beuth Verlag,

Berlin 1983.

78 T. Redeker, W. M€oller: ‘‘Chemsafe-Datenbank f€ur si-

cherheitstechnische Kenngr€oßen,’’ TU 29 (1988) no. 5,

174, VDI Verlag, D€usseldorf.

79 V. Pilz: ‘‘Sicherheitsanalysen zur systematischen

Uberpr€ufung von Verfahren und Anlagen – Methoden,

Nutzen und Grenzen,’’Chem. Ing. Tech. 57 (1985) no. 4,

289 – 307.

80 A Guide to Hazard and Operability Studies, Chemical

Industry Safety and Health Council of the Chemical

Industries Association, Alensbie House, 93 Albert Em-

bankment, London SE 1 7TU. Reprinted 1985.

81 Risikobegrenzung in der Chemie, PAAG-Verfahren

(HAZOP), ISSA Prevention Series No. 2002, May

1990. Published by: IVSS Internationale Vereinigung

f€ur soziale Sicherheit, Berufsgenossenschaft der

chemischen Industrie, Geisbergstraße 11, D-6900

Heidelberg.

82 Wasserhaushaltsgesetz Sept. 23, 1986 (BGBl. I, 1986,

1529)

83 Allgemeine Rahmen-Verwaltungsvorschrift €uber Mind-

estanforderungen an das Einleiten von Abwasser in

Gew€asser (Rahmen Abwasser VwV) vom Sept. 8,

1989 (GMBI, 1989, 518).

84 H.-O. Braubach, E. Sommer, K. Zellmann: ‘‘Anforder-

ungen an verfahrenstechnische Anlagen durch die Wei-

terentwicklung der Gew€asserschutz-Vorschriften,’’

Chem. Ing. Tech. 57 (1985) no. 3, 113 –118.

85 Allgemeine Verwaltungsvorschrift €uber die n€ahere Bes-

timmung wassergef€ahrdender Stoffe und ihre Einstu-

fung entsprechend ihrer Gef€ahrlichkeit (VwV wasser-

gef€ahrdende Stoffe), Mar. 9, 1990 (GMBI, 1990, 114).

86 Gesetz €uber die Vermeidung und Entsorgung von Abfl€a-

len (Abfallgesetz – AbfG), Aug. 27, 1986 (BGBl I,

1986, 1410).

87 Verordnung zur Bestimmung von Abf€allen nach x 2

Abs. 2 des Abfallgesetzes (Abfallsbestimmung-Ver-

ordnung – AbfBestV) April 3, 1990 (BGBl. I, 1990,

614).

88 Allgemeine Abfallverwaltungsvorschrift €uber Anfor-

derungen zum Schutz des Grundwassers bei der Lager-

ung und Ablagerung von Abf€allen, Jan. 31, 1990

(GMBI, 1990, 74).

89 MAGS-L€armschutz beim Raffineriebau, Minister f€ur

Arbeit, Gesundheit und Soziales des Landes Nordr-

hein-Westfalen, 1977.

90 Forschungsbericht 79–105–03–302, Stand der Technik

bei der L€armminderung in der Petrochemie, commis-

sioned by the Bundesumweltamtes, Dec. 1979.

91 H. M. Bohuy: L€armschutz in der Praxis, R. Oldenbourg

Verlag, M€unchen 1986.

92 M. Heckl, H. A. M€uller: Taschenbuch der Technischen

Akustik, Springer-Verlag, Berlin 1975.

93 Allgemeine Verwaltungsvorschrift €uber genehmigungs-

bed€urftige Anlagen nach x 16 der Gewerbeordnung

GewO, Technische Anleitung zum Schutz gegen L€arm


(TA L€arm), July 16, 1968 (Beilage zum BAnz Nr. 137,

July 26, 1968)

94 Verordnung €uber Arbeitsst€atten, March 20, 1975

(BGBl. I, 729). Modified by decrees passed on Jan. 2,

1982 (BGBl. I, 1) and Aug. 1, 1983 (BGBl. I, 1057)

95 Unfallverh€utungsvorschrift L€arm (UVV-L€arm) Oct. 10,

1990, Hauptverband der gewerblichen Berufsgenossens-

chaft.

96 Gesetz €uber Betriebs€arzte, Sicherheitsingenieure und

andere Fachkr€afte f€ur Arbeitssicherheit, Dec. 12, 1973

(BGBl. I, 965). Modified by law passed on April 12,

1976 (BGBl. I, 965)

97 Verordnung €uber Druckbeh€alter, Druckgasbeh€alter und

F€ullanlagen (Druckbeh€alterverordnung), Feb. 27, 1980

(BGBl. I, 173). Modified by decree passed on April 21,

1989 (BGBl. I, 830)

98 M. P€utz: Die Genehmigungsverfahren nach dem

Bundes-Immissionsschutzgesetz. Handbuch f€ur Antrag-steller und Genehmigungsbeh€orden, Erich Schmidt,

Berlin 1986.

99 Neunte Verordnung zur Durchf€uhrung des Bundes-Im-

missionsschutzgesetzes (Grunds€atze des Genehmi-

gungsverfahrens – 9. BImSchV), Feb. 18, 1977 (BGBl.

I, 274) and May 19, 1988 (BGBl. I, 608, 623)

100 Ber€ucksichtigung von Emissionen und Immissionen bei

der Bauleitplanung sowie bei der Genehmigung von

Vorhaben (Planungserlaß), Minister f€ur Landes- und

Stadtentwicklung, Minister f€ur Arbeit, Gesundheit

und Soziales und Minister f€ur Wirtschaft, Mittelstand

und Verkehr, July 8, 1982 (MBl. NW, 1366 /SM Bl.

NW, 2311).

101 Die Beteiligung an der Bauleitplanung

(Beteiligungserlaß), Minister f€ur Landes- und Stadtent-

wicklung, July 16, 1982 (MBl. NW, 1375 / SM Bl. NW,

2311).

102 A. Rahmel, W. Schenk: Korrosion und Korro-

sionsschutz von St€ahlen, Verlag Chemie, Weinheim,

Germany 1977.

103 U. Heubner et al.: Nickellegierungen und hochlegierte

Sonderst€ahle; Kontakt und Studium, vol. 153, Expert-

Verlag, Sindelfingen 1985.

104 H. Gr€afen et al.: Die Praxis des Korrosionsschutzes;

Kontakt und Studium, vol. 64, Expert-Verlag, Grafenau

1981.

105 U. R. Evans: Einf€uhrung in die Korrosion der Metalle,

Verlag Chemie, Weinheim, Germany 1965.

106 DIN Taschenbuch 219: Korrosion und Korro-

sionsschutz, Beuth-Verlag, Berlin 1987.

107 H. Gr€afen et al.: Kleine Stahlkunde f€ur den Chemieap-

paratebau, VDI Verlag, D€usseldorf 1978.

108 VDI-Berichte 385: Schadensverh€utung durch Qualit€ats-

sicherung von Werkstoffen und Bauteile-Optimierung

des Bauteilhaltbarkeit. Tagung, M€unchen 1980, VDI-

Verlag, D€usseldorf.

109 D. Behrens: DECHEMA Corrosion Handbook, VCH

Verlagsgesellschaft mbH, Weinheim, Germany 1988 ff.

110 J. R. Brauweiler: ‘‘Economics of Longlife – Shortlife

Material,’’ Chem. Eng. (N. Y.) 70 (1963) no. 2, 128.

111 R. E. Meissner, D. C. Shelton, Chem. Eng. (N.Y.), April

1992, 81 – 85, 89 – 94.

112 R. S. Aries, R. D. Newton: Chem. Eng. Cost Estimation,

New York (1955) 2, 77.

113 J. T. Gallagher: ‘‘A Fresh Look at Engineering Con-

struction Contracts,’’ Chem. Eng. Cost File, vol. 9,

McGraw-Hill, New York 1967, p. 23.

114 J. in ’t Veld, W. A. Peters: ‘‘Keeping large Projects under

Control: The Importance of Control Type Selections,’’

Int. J. Project Management 7 (1989) no. 3.

115 A. Morna, N. J. Smith: ‘‘Project Managers and the Use of

Turnkey Contracts,’’ Int. J. Project Management 8

(1990) no. 3, 183 – 189.

116 J. Madauss:Projektmanagement, 3rd ed., C. E. Poeschel

Verlag, Stuttgart 1989.

117 E. Mosberger: ‘‘Projektmanagement im Anlagenbau,’’

Chem. Ing. Tech. 63 (1991) no. 9, 921 – 925.

118 D. Arnold: ‘‘Projektmanagment im internationalen

Großanlagenbau und Konsequenzen f€ur die Aus- und

Weiterbildung von F€uhrungskr€aften,’’ Zfbf Sonderheft

24 (1989) 55 – 77 (Verlagsgruppe Handelsblatt,

D€usseldorf-Frankfurt).

119 D. Kumar: ‘‘Developing Strategies and Philosophies

Early for Successful Project Implementations,’’ Int. J.

Projekt Management 7 (1989) no. 3.

120 L. F. Rolstad: ‘‘Project Start-Up in Tough Practice,’’ Int.

J. Project Management 9 (1991) no. 1, 10 – 14.

121 H. Reschke, H. Schelle, R. Schnoop: Handbuch Pro-

jektmanagement, vol. 1, Verlag TUV Rheinland, K€oln

1989.

122 N. Thumb:Grundlagen und Praxis der Netzplantechnik,

Verlag Moderne Industrie, M€unchen 1969.

123 G. Bernecker: Planung und Bau verfahrenstechnischer

Anlagen, 3rd ed., VDI Verlag, D€usseldorf 1984.

124 H. Groh, R. Gutsch: Netzplantechnik, 3rd ed., VDI

Verlag, D€usseldorf 1982.

125 A. Franke: ‘‘Risikobewußtes Projektcontrolling, Ri-

sikomanagement als Element eines integrierten Pro-

jectcontrollings,’’ Dissertation, Universit€at Bremen

1991.

126 S. C. Ward, C. B. Chapman, B. Curtis: ‘‘On the Alloca-

tion of Risk in Construction Projects,’’ Int. J. Project

Management 9 (1991) no. 3, 140 – 147.

127 E. Diegelmann, H. Benesch: ‘‘Industriemodelle –

Methodik, Abwicklung,’’ 3 R International (1983)

no. 11, 535 – 541.

128 E. Diegelmann: ‘‘Erfassung, Beschaffung und Montage

von Rohrleitungsteilen,’’ Chem. Ing. Tech. 54 (1982)

no. 4, 303 – 313.

129 J. Hengstenberg, B. Sturm, O. Winkler:Messen, Steuern,

Regeln in der Chemischen Technik, 3rd ed., vol. V,

Springer-Verlag, Berlin 1985.

130 VDI 3546 – Konstruktive Gestaltung von Pro-

zeßleitwarten, Beuth-Verlag, Berlin 1987 – 90.

131 VDI 3683 – Beschreibung von Steuerungsaufgaben,

Pflichtenheft, Beuth-Verlag, Berlin 1986.

132 VDI 3693 – Verteilte Prozeßleitsysteme, Pr€ufliste f€ur

den Einsatz, Beuth-Verlag, Berlin 1985.


133 VDI 2180 – Sicherung von Anlagen in der Verfah-

renstechnik, Bl. 1 bis 5, Beuth-Verlag, Berlin 1984 –

88.

134 ABB (ed.): Schaltanlagen, 8th ed., Cornelsen-Verlag,

D€usseldorf 1988.

135 Siemens (ed.): Handbuch der Elektrotechnik, 3rd ed.,

Verlag Girardet, Essen 1971.

136 J. Matley: ‘‘Keys to Successful Plant Start-Ups,’’ Chem.

Eng. (N.Y.) 76 (1969) Sept. 8, 110 – 130.

137 W. Langhoff: ‘‘Inbetriebnahme,’’ Beitrag im Kursush-

andbuch ‘‘Planung und Bau von Großanlagen der Che-

mischen Industrie,’’ DECHEMA, Erfahrungsaustausch,

D. Behrens, K. Fischbeck, Frankfurt 1969.

138 VDI-Richtlinien, Datenverarbeitung in der Konstruk-

tion, Einf€uhrungsstrategien und Wirtschaftlichkeit von

CAD-Systemen, VDI 2216 (October 1990, draft).

139 W. Hilkert, R. Pfohl: Anlagenkonstruktion mit CAD/

CAE-Werkzeugen – ein Erfahrungsbericht – VDI-Ber-

ichte Nr. 861.5, 1990.

140 H. Schmidt-Traub: ‘‘Integrierte Informationsverarbei-

tung im Anlagenbau,’’ Chem. Ing. Tech. 62 (1990)

no. 5, 373 – 380.

141 R. Gareis: Projektmanagement im Maschinen- und An-

lagenbau, Manz-Verlag, Wien 1991.

142 S. J. Heisler: ‘‘Project Quality and the Project Manager,’’

Int. J. Project Management 8 (1990) no. 3, 133 – 137.

Further Reading

F. P. Helmus, C. Ahner: Process Plant Design, Wiley-VCH,

Weinheim 2008.

R. E. Meissner: Plant Layout, ‘‘Kirk Othmer Encyclopedia of

Chemical Technology’’, 5th edition, John Wiley & Sons,

Hoboken, NJ, online DOI: 10.1002/0471238961.

1612011413050919.a01.pub2.

R. E. Meissner: Plant Location, ‘‘Kirk Othmer Encyclopedia

of Chemical Technology’’, 5th edition, John Wiley &

Sons, Hoboken, NJ, online DOI: 10.1002/0471238961.

1612011413050919.a02.pub2.

G. Towler, R. K. Sinnott: Chemical Engineering Design -

Principles, Practice and Economics of Plant and Process

Design, Butterworth-Heinemann, Oxford 2007.


Chemical plant design & construction 2016

Engineering

Transcript of Chemical plant design & construction 2016