Transcript Otimization & Equipment Design

Profitability Analysis
Our client is evaluating a
number of scenarios
 How does our process compare
with the others?
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Basis of Comparison
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Cost a demo unit, not a world scale
plant
Include both the syngas section and the
methanol section (from natural gas to
methanol)
The syngas plant contributes $10M to
capital cost, $7M to annual operating
cost – exclusive of natural gas cost
CapCost
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Available on the CD
Covers everything from equipment cost
estimation to profitability analysis
CD also contains a tutorial which describes
how to run the program
It is strongly recommended that you view this
(requires a computer with sound)
Where parameters are not given in the notes,
use the defaults in CapCost
Sheet “User Options” is used
to set various parameters
Sheet “Equipment Summary”
is used to estimate
equipment costs
Change the names to something reasonable
e.g. “Compressor Drive”
Sheet “Utilities Summary” is
used to estimate costs of
steam, cooling water etc.
Click on the “Unspecified” cells to enter type
and rate of utility (it knows the unit cost)
Sheet “COM Summary” is
used to enter costs of raw
materials and revenue from
products
COM is Cost Of Manufacturing“
Sheet “COM Summary”also
allows enter of various
economic parameters
Sheet “Cash Flow Analysis”
displays the calculations
Cumulative Number of Data Points
Sheet “Monte Carlo
Simulation” does a sensitivity
analysis
1000
750
25% chance that it is better
than 18M
500
Most probable value of NPV is $5M
250
0
-60
-40
-20
0
20
40
60
80
Net Present Value (millions of dollars)
25% chance that it is worse than -7M
Cost Data
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CapCost has data on utilities, waste
disposal, manpower requirements (take
these as current costs)
The waste (mixed alcohols) is classified
as hazardous
The “Course Description” on the web
site has references to costs of chemicals
and commodities
More Cost data
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Natural gas prices are normally quoted in $
per million BTU’s – assume a heat value of
23,000 BTU’s/pound
With long term contracts we can expect to
get natural gas at 80% of the spot price
CO2 is a waste product we will get at zero
cost
Purge gas streams have heating value but
contain components that are not good for the
furnaces. Overall they have zero value.
Catalyst Cost
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Include the cost of initially filling the
reactors in the capital cost
Calculate the annual operating cost by
assuming a lifetime of two years
The cost is $24 per litre of reaction
space
This includes a disposal fee (the
manufacturer takes it back)
Additional Documentation
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See the CD sections “Profitability Analysis”
and “Wrap-up Session”
The workshop on “Economic Analysis” also
contains information on the concepts behind
profitability assessment
You will want a copy of the HYSYS Costing
Version case to get rates, reactor volumes
etc.
Material to Submit
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Paper:
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In folder “Final Report” in group folder:
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A three page executive summary
The group notebook
Copy of CapCost spreadsheet (this will
cover both my Profitability assignment, and
Dave Mody’s Capital Cost assignment)
By 11:00 AM on December 5
Wrap-up Session
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Three of the reports will be selected,
and the groups asked to discuss their
findings
No slides, but be prepared to stand up
and talk about your report for 5-10
minutes
Content of Report
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State our objectives and the capital cost
Give a brief description of the process
Identify any issues of concern in the design
(e.g. designs or costs on shaky grounds)
Summarize the groundrules for the economic
analysis
Answer the three questions at the end of the
CD document “Profitability Analysis”