Short Cutting Front End Engineering and Design (FEED)

In the current economic climate operating companies have fewer resources, less money and time to commit in developing front end designs for a project without knowing that the business case for the investment is viable.

This makes it important to have a rapid and effective way of generating reliable project cost estimates as quickly and cost effectively as possible. Combining modern software packages with experienced project development engineers now allows reliable estimates to be produced for around a fifth of the cost of traditional approaches. This article will explain how.

Conventional FEEDs

Generally speaking conventional projects can be broken down into four, distinct stages;

1. Conceptual Study
2. Front End Engineering and Design
3. Engineering Procurement and
4. Construction (EPC) Commissioning and Start-up.

Front End Engineering and Design, or FEED as it is better known, is the phase during which a percentage of the overall engineering required for a project is completed, with the purpose of developing a Sanction Estimate. Capital cost has a major bearing on return on investment, so the Sanction Estimate is an important part of the investment decision.

Conventional FEEDs are often referred to in terms of ‘shallow’ or ‘deep’, which relates to the quantity of engineering performed. Shallow FEEDs can be as little as 10% of overall engineering whilst deep FEEDs approach 25%.

FEEDs are also associated with different Sanction Estimate accuracies (e.g. ±10%, ±20%) the convention being estimate accuracy is proportional to the level of definition available; in effect the quantity of engineering completed. It’s difficult to generate an estimate for scope which hasn’t been quantified.

We know there will be a lot of piping on the new plant but how many lines will there be, what size are they, how long are the routes, what are the materials of construction, how will they be supported? All these criteria impact on cost but are difficult to quantify without at least a preliminary design in place.

How much do FEEDs cost?

Projects in the process industries vary enormously but generally engineering costs somewhere between 10% and 20% of the Total Installed Cost (TIC). Given shallow FEEDs start at 10% of engineering with deep FEEDs approaching 25%, then taking the midpoints of these ranges expect a conventional FEED to cost in the region of 2%-3% of TIC.

Not an insubstantial sum but the operator gets a return on its investment. Progress on the project is made in terms of the engineering, but more importantly greater certainty on the cost of the project is provided.

UK FEED Market

Arguably the UK market for FEED has changed over the last decade. Previously new builds weren’t solely the preserve of Blue Chip operators but they were responsible for the majority of large capital projects.

Blue Chip operators are still present in the market but increasingly new builds in the UK are by smaller operating companies; indeed these can constitute little more than a group of individuals with an innovative idea and the potential for venture capital backing.

What’s the difference? Blue Chip operators had deep pockets and were prepared to invest in FEED in the knowledge that it was likely they would go on and build the plant. The new client base however tends to be more entrepreneurial with limited access to funds. Consequently spending 2%-3% of TIC on a ‘no’ investment decision often isn’t an option.

So what alternative to conventional FEED is there for the new client base?

The Market Response

The market response to this question has been to develop more powerful, software based estimating tools which make use of the primary data contained within commonly used, engineering tools in order to generate further definition through the use of algorithms and data sets.

Process simulation software packages are now used globally throughout the process industries. Their purpose is to find the optimal conditions for a given process through the creation and manipulation of a heat and mass balance. The latest generation of estimating tools take advantage of the fact that most simulators contain algorithms which provide initial estimates of equipment size.

Primary data is extracted from the process simulators and used as the basis from which to build a TIC estimate. The data extracted includes equipment types, equipment sizes, equipment connectivity, piping sizes and electrical loads. Equipment connectivity relates to the process lines connecting main plant items.

Generation of Further Definition

The primary data imported from a process simulation is at a relatively high level, typically corresponding to the detail found on Process Flow Diagrams. It is therefore necessary to develop further definition to support the estimate. This is achieved using techniques which are collectively referred to as ‘volumetric modelling’.

Volumetric modelling starts with the allocation of a pre-determined template of ancillary piping and instrumentation for each of the main plant items. For example, if we take a distillation column fitted with a thermal reboiler, then information concerning the feed, bottoms liquid, overhead vapour and reboiler lines, as well as the equipment items themselves, is extracted from the simulation.

The pre-determined template adds relief, blowdown and purge lines plus commensurate numbers of temperature, level and pressure instruments. Manual isolation valves, check valves, control valve bypasses, vents and drains plus allowances for tertiary steelwork and lighting are also included in the template. This operation is performed for each main plant item.

The process simulation exists only in a 2 dimensional world and therefore it is still necessary for the user to define the plot size and number of levels required for the new plant.

Based upon typical process plant configurations and densities, the estimating software can then approximate piping and cabling meterage and the primary and secondary steelwork required for the main structures.

The cost of foundations for the main structures and equipment items are selected from look up tables on the basis of equipment type, size and an assumed soil density. The requirement to pile foundations is optional.

The costs for process control, emergency shutdown and power distribution systems are estimated from the instrumentation count and number of electrical drives. Line temperatures are assessed and where necessary, an allowance for thermal insulation is calculated.

Using the above process the estimating software generates calculated quantities for equipment and bulk materials.

Engineering and construction manhours are factored on the basis of these quantities. Costs for these services are then generated using rates contained within look up tables which are periodically updated.

All of this information is captured in standard document sets which includes PFDs, P&IDs, Data Sheets, Schedules, Bulk Material Take Offs and an estimate breakdown.

Improving Accuracy

Changes to the estimating model can progressively be made by the estimator to improve accuracy, for instance in order to take advantage of further engineering definition.

The actual plant layout can be entered into the estimating model when known thereby improving the accuracy of calculated steelwork, piping and cabling quantities. Also, the estimated costs of main plant items can be replaced with manufacturer quotations.

Various other, in built options to improve accuracy are offered by the estimating packages including specific labour rates for different geographic locations, adjustments for local climatic and seismic conditions, various design codes, productivity rates and an annual update of the cost databases to reflect latest inflation.

A verification of the final estimate output by experienced, functional personnel is strongly recommended to ensure there are no significant shortcomings with the software algorithms applied.

How Accurate are the New Software Estimating Tools?

Clearly ‘volumetric modelling’ represents no more than an approximation of quantities, nevertheless estimates generated using this technique have over time proved to be reasonably accurate. An underestimate in one area of the plant is often counteracted by an overestimate in another and so on.

Experience indicates TIC estimates generated straight from a process simulator without any additional data or refinements made by the operator are 40% accurate or better. The input of the actual unit layout, vendor quotations for main equipment items, electrical distribution details, ground conditions, etc. will progressively improve the accuracy to 30% and better.

Benefits of the Streamlined Approach

The primary benefit of the streamlined approach is it provides the information required for an investment decision at a fraction of the cost of conventional FEED. The required engineering documentation for the streamlined approach would typically be:

• Heat and mass balance
• Process Flow Diagrams
• Material Selection Diagram
• Design Pressure and Temperature Diagram
• Equipment Process Data Sheets
• Utilities Schedule
• Equipment List
• Plot Plan and Elevations
• Outline Building Specifications

As opposed to the documentation required for a deep FEED:

As a consequence, instead of spending 2%-3% of TIC expect to spend around 0.5% using the streamlined approach.

Given the much reduced engineering required for the streamlined approach, this clearly offers a quicker route to sanction than the conventional approach, though ultimately the balance of engineering that makes up a FEED must be completed post sanction.

A less obvious benefit to the streamlined approach is the flexibility for optioneering. The costs for differing capacities, configurations, technologies or locations can be relatively quickly evaluated without substantial rework. This allows value engineering studies to be completed in order to improve the overall business return for the project. No need to worry about the detailed definition, the software algorithms do all the hard work!

Drawbacks of Streamlined approach

The new estimating tools have a number of shortcomings.

Infrastructure, offsites and utilities cannot be generated from the process simulation and as such allowances for these items must be added by the estimator.

Nor do the new tools cater well for specialised items such as packaged equipment, fired heaters or large rotating machines. Clearly there are limits to the library of standard equipment that can be provided within the software.

As previously noted, the estimating algorithms are driven solely by the equipment items contained within the process simulation and as such the costs for the instrumentation and electrical systems and distribution are based on scaled factors rather than installed base. As a consequence the costs generated for these items merit further scrutiny.

Finally much of the documentation generated by the packages is generic, the Piping and Instrument Diagrams (P&IDs) in particular are of little value beyond project sanction.

Summary

The current generation of software based estimating tools offer operators a relatively cheap and quick way of assessing the viability of a project in terms of return on investment. The estimate accuracy can be relatively high where the key issues that most influence the TIC are understood and focussed on.

They do not however provide a short cut for the engineering required for a project should it obtain sanction.

Peter Laing joined ABB Consulting in 2014 as the Operations Manager responsible for the Projects and Engineering functions. He has over twenty five years’ experience of delivering projects in the refining, chemicals and power sectors.

Peter previously worked for a number of EPC contractors including Foster Wheeler, Amec and Costain where he was involved with projects ranging from small brownfield modifications to greenfield refinery. His last two positions were General Manager Costain Teesside Operations and Engineering Manager Foster Wheeler Teesside Operations.