5 - ECONOMIC EVALUATION

5. Estimation of the capital investment.

5-1 The cost of Purchased Equipment for project calculated by
HYSYS -V9, see table (5-1).
5-2 Estimation of the Capital Investment Ref [5]:-
Consider this equipment represent about 55% of total equipment cost for plant.

Table (5-1) the purchased cost of equipment

Equipment's Cost $ Equipment's Cost $

E-200 470300 V-600 18800
E-100 19700 T-201 790700
V-201 93700 K-100 11419900
P-200 263700 V-100 525000
T-100 170000 V-300 100400
E-100 378000 E-300 30900
AC-100 378200 V-100 100400
V-101 102200 V-101 39300
E-401 166400 T-200 570200
K-100 5718600 T-100 288000
K-101 659000 V-200 102200
E-201 139700 V-103 20900
E-400 376700 V-101 43100
E-102 10800 T-101 28400
V-100 716700 E-202 319500
V-601 20900 E-101 141200
T-501 236000 V-202 76500
AC-100 246400 T-500 198300
K-601 720600 V-102 19300
V-400 71800 E-102 10400
TOTAL =$25,802,800

Purchased equipment to three train cost for project = $77,408,400

1006
Total cost in the year 2017=77,408,400 970 = 80281289.07

P.E.C Libya using location factor = 1.7

Total purchased equipment cost = $ 131,594,280
I. Direct cost = material and labor involved in actual installation of complete
facility
.(pf fixed-capital investment % 65-85)
A. Equipment + installation + instrumentation + piping + electrical +
+ insulation
Painting (50-60% of fixed-capital investment)
Purchased equipment .1
The purchased cost = $ 131,594,280
Purchased equipment installation .2

From (25 -55) % of purchased equipment cost Ref [5] A percent of 50%
:was taken
The installation cost = $ 65,797,140
Instrumentation and controls .3
Instrument cost installation - labor cost and expenses for auxiliarys
equipment's and material constitute the major portion of the capital
investment required for instrumentation. This cost depends on the amount of
control required. It is between (8-50) % of the purchased cost for all
.equipment's
.The value 40% was taken
Therefore, the instrumentation cost = $ 52,637,712
Piping .4
The cost of piping covers labors, valves, fittings, pipe, supports and
other items involved in the complete erection of all piping used directly in the
.process
The cost as a percent from purchased = 75% Therefore, the cost of piping = $
98,695,710

Electrical installation .5
The cost of electrical installation consists: Primary of installation labor and
material for power and lighting with building services lighting usually included
.under the heading of building and service costs
The cost amount to (10-40) % of purchased equipment cost. The value of 30%
.was taken
Therefore, the cost of electrical installation = $ 39,478,284
.B. Building, process and auxiliary
The cost amount to (10-70) % of purchased equipment cost. The value of
.40% is the best percent for this plant
Therefore, the building cost = $52,637,712
C. Services facilities and Yard improvements
The cost about (40-100) % of purchased equipment cost, the value of 60%
of purchased equipment cost = $78,956,568

D. Land
The cost range as a percent of the equipment purchased cost is (4-8) %. The value of
5 % was used. Therefore, the land cost = $ 6,579,714

The Total cost (DC) = $ 526,377,120

II. Indirect costs (IC) = Expenses which are not directly involved with
material and labor o f actual installation of complete facility (15-35%) of fixed-
.capital investment) REF [5]
Table (5-2) the indirect investment

Cost (S) Percent Component of

age indirect investment

131,594,280 25 Engineering and

supervision
FCI 0.02 2 Legal expenses
Construction
FCI 0.15 15 expenses and

FCI 0.1 10 Contractor's fee

Contingencies

131,594,280+0.27 The Total cost

FCI (IC)
 The Total cost (IC) =131,594,280+0.27 FCI

:III. Fixed capital investment (FCI) Ref [5]

FCI = DC + IC. (5-1)
Therefore, FCI = 526,377,120+ 131,594,280+ 0.27 FCI

FCI = $ 901,330,684.9

Fixed capital investment (FCI) =$ 901,330,684.9

IV. The working capital (WC) Ref [5]

WC = 0.15 (TCI) (5 -2)
V. The total capital investment (TCI) Ref [5]
TCI = FCI + WC....... (5-3)
(TCI) 0.15 + 901,330,684.9 =

Total Capital Investment (TCI) = $ 1,060,389,041

The working capital (WC) = $ 159,058,356.2

:Estimation of Total product cost (TPC) Ref [5] 5-3

The estimation of total production cost divided to two sections as a
- :following

.The first section is for to the new plant (1

The second section is for to the old plant; in this section, the actual data for (2
production cost of the plant is not available. An assumption of production cost
was specified to be about 20% of each station. That mean the production cost
.of old plant equal 100% from production cost of new plant

.Total production costs = manufacturing cost + general expenses

:Estimation manufacturing cost Ref [5] 5-3-1

I. Manufacturing cost = direct production cost + fixed charges + plant
overhead cost

Table (5-3) Summery of Estimation manufacturing cos

 A. direct production cost:
( 0.66 TPC)

labor .1 (TPC)$0.15

Direct supervisory and clerical (OL)$0.15

labor.2
Utilities.3 (TPC)$0.1

Maintenance and repairs.4 (FCI)$0.06

Operating supplies (FCI)$0.007

Laboratory charges.5 (OL)0.12 $

B. Fixed charges:(0.15 TPC

Depreciation.1 . (FCI)$0.05

Insurance.2 (FCI)$0.005
:Where
=Operati OL
labor. FCI plant overhead cost:(0.15 (TPC)$0.15 ng
TPC).C =$
901,330,684.9
TCI = $ 1,060,389,041

Manufacturing Cost = 159,058,356.1+0.4405(TPC)

:Estimation General Expenses Ref [5] 5-3-2

.General Expenses Cost = 0.05 TPC

TPC =159,058,356.1 +0.4405(TPC) + 0.05 (TPC)
.Total Product Cost (TPC) = $ 312,185,195
 :Estimation Total Income 5-4

:Income from condensate

$
The Seals gas e price is equal = 7.16 MMBtu REF [6]

$ hr Btu
7.16
MMBtu year 8000 hr 47031.64

$
year 2,693,972,339

$
ton The NGL e price is equal = 467.6

4 Ib hr 1 Ton $ $
3.8760 10 8000 468 =647,845,71.43
hr year 2240 Ib Ton year

$
Ton The C5+ e price is equal = 507.5

4 Ib hr 1 Ton $ $
3.1620 10 hr 8000 year 2240 Ib 507.5 Ton =573,112,50 year

To t a l income = 2,816,068,160 $/year

:Economic Evaluation 5-5

.Consider 25-year project life

25

Table (5-3) calculate ROR

 Calculate ROR

$2,816,068,16 Total income

0
$312,185,195. Production Cost -
3
2,503,882,96 $ Gross profit
5
$ income tax 50% -
1,408,034,080
360,532,27.4 $ Depreciation +
$ Cash flow
1,131,902,112

C .F
=106.7 = Rate of return (DCFROR)
T .C . I

T .C . I
Payback period = C .F = 1 Months & 7 Dyes