Feature Report

De-emphasize Capital Costs

Focus more on mass flowrates, fluid densities and operating hours for real savings
Rajiv Narang, Subodh Sarin, Anu Anna George Fluor Corp.
iping represents a major cost for projects in the chemical process industries (CPI). Larger pipe diameters increase upfront capital costs for a project, but the lower pressure drops afforded by large pipes mean less power is required to move the fluid through the pipe. Optimizing pipe diameter becomes an exercise in balancing the capital cost savings realized by using smaller pipes with the power required to pump the fluids. Price volatility in industrial piping commodities, such as carbon steel, can complicate the selection of optimal pipe diameters at the start of a project. But while constantly changing capital costs will certainly affect optimal pipe diameter, plants can realize significant cost savings by focusing more on fluid densities, mass flowrates and hours of operation when selecting pipe sizes, and worrying less about varying commodities prices. In this analysis, the authors evaluated the sensitivity of optimal pipe diameter to changing capital costs, and concluded that variable capital costs have only a minimal effect on commercial pipe size selection up to diameters of 10-in. nominal pipe size (NPS). Once diameters reach larger than 12 in., it then becomes worthwhile to include capital costs in determining optimal pipe diameter. However, even at larger pipe sizes, mass flowrates and fluid densities should drive decisionmaking on pipe sizes because those factors affect optimal diameter more strongly than capital costs. When determining optimum line size, plant designers tend not to inOptimum diameter, in.
16 14 12 10 8 6 4 2

For Pipe Size Selection

Optimum diameter Selected diameter

Serie

0.1 1 10 100 clude density and mass flowrate Capital cost coefficient, $/(yr x ftlin x ftdia) explicitly as important elements. Most use personal experience and FIGURE 1. Selected pipe diameter is never rules of thumb to determine the below D . The liquid flowrate here is 28 lb/s. opt economics of pipe selection at the beginning of a project. Our 16 analysis suggests that consider14 ing other factors, such as mass 12 flowrate, densities and hours of 10 operation could achieve greater cost benefits. Engineers should 8 . prepare a table listing these valOptimum diameter 6 ues for typical fluids in a plant Selected diameter 4 as they decide on pipe diameter. These decisions should hold de2 0.1 1 10 100 spite cost variations. Capital cost coefficient, $/(yr x ftlin x ftdia) For the purpose of this analysis, the authors assumed that FIGURE 2. Capital cost coefficient for 2008 operating costs (utilities prices) $6/(yr ftdia ftlin). Liquid flowrate = 112 lb/s are constant for a given project, since electricity-cost increases tend to $/kWh). The units of this coefficient be much more gradual and prices less are changed to ($/yr)/[(lb(ft2/s3)] for convolatile than those for commodities. sistency of units by using: [($/kWh) For example, U.S. electricity costs rose (no. of hours/year)/K], where K is equal from 4.7 to 7.1 /kWh between 1990 to 737.37, and is obtained from various and 2008 [1]. In cases where capital conversion factors. Also in Equation costs and operating costs change pro- (2), is the pump efficiency, gc is massportionally in the same ratio, optimum force conversion constant, m is the pipe size remains the same. mass flowrate (lb/s), is density (lb/ ft3) and is viscosity [lb/(ft)(s)]. Optimum diameter and velocity To obtain optimum pipe diameter from Equation (1) determines the optimum Equation (1), the following assumptions are necessary: diameter (Dopt) in feet of a pipe [2]. Assume incompressible flow 0.164  Assume turbulent flow regime Dopt = 0.9 C0 + (C1 gc )   ( 1 ) Ignore pressure loss from fittings m0.459 0.033 0.328 and valves Where: C1 is a capital cost coefficient Ignore pump capital costs Elevation changes are not considered that includes the capitalization charge of  pipe per unit length, represented by $/[yr The optimum velocity is given as: foot linear length foot diameter]. And 0.082 0.066 0.344 C0 is a cost coefficient (power cost in Vopt = C2 m  (2)

Optimum diameter, in.

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Feature Report
PROJECT ESTIMATED COST DATA
Diameter vs. Cost of Pipe
4 .5 4

he validity of the power law to regress capital cost is given in Ref. [2] as: Cinv = C1 L D n , where: Cinv is the annualized capital cost ($/yr); C1 is the capital cost coefficient, which includes capitalization charge for pipe per unit length [$/(yr ftdia ftlin)]; n is an exponent from a cost correlation; and D is pipe diameter in ft. In Ref. [2], n is assumed to be 1.3, and in an example, takes C1 as $5.7/ yr ftdia ftlin C1 incorporates the annualization factor and is a useful coefficient that simplifies the correlation of pipe diameter with annualized capital costs and makes the optimization problem tractable. Project data are used to examine the range and validity of the power law, as well as representative values for C1 and n. For carbon-steel STD Sched-

Diameter vs. Cost of Pipe

9 8

Cost of pipe, $/ft/yr

Capital cost, $/yr/ft

3 .5 3 2 .5 2 1 .5 1 0 .5 0 0 0. 1 0.2 0.3

y = 7.0386x1.4393 R2 = 0.9956

y = 9.1422x1.1684 R2 = 0.9971

7 6 5 4 3 2 1

Diameter, ft

0.4

0.5

0.6

0.7

0 0 0. 2 0.4 0.6 0.8 1

Diameter, ft

Cost correlation exponent (n) variation. Carbon steel (left) and SS 316 (right) pipe

ule, A106 pipe, the capital cost is annualized over 10 years at 5%, and C1 varies from 5.14 to 5.63, while n varies from 1.46 to 1.61. It can be concluded that for the purpose of this study, using n as 1.3 would not lead to erroneous conclusions.

For carbon-steel XS Schedule pipe, the following data are available (above figure, left): In this case, C1 rises to 7.03, while n is at 1.44. For stainless-steel 316, Schedule 10S pipe, the following data are available (above figure, right): C1 has risen to
26 24 22 20 18 16 14 12 10 8 6 4 2 0.1

9.14 and n is at 1.17. The authors conclude that using an n value of 1.3 works well for thicker carbon steel as well as for stainless-steel pipes. C1 does increase for XS schedule and 10 S schedule as expected, but the increase is not excessive.

(2B) For the equations above:  The optimum diameter is independent of the length of pipe  The optimum diameter is more sensitive to mass flowrate and density than to capital and operating cost  The optimum velocity is less sensitive to mass flowrate but quite sensitive to density  As long as the capital-cost-to-operating-cost ratio (C0/C1) does not change, optimum diameter remains the same, assuming other conditions are unchanged The capital cost coefficient, C1, is derived from the capital cost equation given below [2]. Cinv = C1 Dn L (3)  n Equation (3), Cinv is the annualized I capital cost ($/yr); C1 is the capital cost coefficient, which includes capitalization charge for pipe per unit length ($/ year diameter in ft linear length in ft); D is the diameter in ft; L is the
42

C = 0.9 + C gc ) ( 1

C0

0.164

Optimum diameter, in.

Where C2 is a consolidated constant [2]. C2 = 4 + C 2 (2A)

length of pipe in ft; and n is assumed to be 1.3. The validity of Equation (3) is examined in the box above. Although better correlations can be developed for capital cost, the analysis in the box suggests the result will not be radically different.

Optimum diameter Selected diameter

1 10 100 To examine how optimum diamCapital cost coefficient, $/(yr x ft x ft ) lin dia eter and velocity affect capital cost, the following case uses a FIGURE 3. In this case, Dopt was calculated stream with mass flowrates of 28 for a gas with a mass flowrate of 28 lb/s, 3 lb/s, 56 lb/s and 112 lb/s, a den- a density of 0.936 lb/ft and viscosity of 0.00000672 lb/(ft s). 3 sity of 29.05 lb/ft and viscosity of 0.000058 lb/(ft s), or 0.08 cP. The op- ftlin) for carbon steel, STD Schedule eration is assumed to run 8,000 h/yr. A106 pipe. The efficiency of the pump is assumed The optimum velocity with this to be 0.6. The operating cost coeffi- variation of capital cost coefficient was cient C0, which is the cost of electric- also calculated using Equation (2). The optimum diameter and optiity purchased, is fixed at $0.10/kWh. The capital cost coefficient C1, which mum velocity graphs are plotted on a is the coefficient of annualized capital semi-log scale to illustrate the changes cost of pipe, is varied from $0.5 to $50/ clearly. The selected diameter is such (yr ftdia ftlin). The optimum diam- that it is never below the optimum eter was found using Equation (1) by diameter. The optimum diameter for keeping the operating costs and other the current capital cost coefficient of carbon-steel pipe, STD schedule A106 variables constant. The analysis in the box above con- [~$6/(yr ftdia ftlin)] is also shown in cludes that capital costs for the year Figures 1 and 2. 2008 reflect a C1 of about $6/ (yr ftdia The above case was repeated with

Capital cost considerations

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TABLE 1. PIPE SELECTION FOR A LIQUID WITH 28 LB/S MASS FLOWRATE

Capital cost coefficient (C1), $/ (yr ftdia ftlin) 0.5 1 1.5 2 2.5 3 4 5 6 7 8 9 10 20 30 40 50 Optimum diameter, in. 8.36 7.466 6.99 6.664 6.424 6.2 5.95 5.74 5.57 5.43 5.31 5.21 5.12 4.57 4.27 4.08 3.93 Optimum velocity, ft/s 2.53 3.17 3.62 3.98 4.28 4.55 4.99 5.38 5.71 6.01 6.28 6.5 6.75 8.47 9.68 10.64 11.44 Selected diameter, in. 10 8 8 8 8 8 6 6 6 6 6 6 6 6 6 6 4

TABLE 2. SAMPLE ANALYSIS FOR OPTIMUM VELOCITY

Optimum velocity, ft/s Mass flowrate, lb/s 10 50 500 Fluid A (Water) Intermittent 5.3 6.1 7.3
3

for higher mass flowrates or higher line sizes, a measure that can save capital costs. 5. This article suggests that a table correlating optimum velocity (or diameter) with mass flowrate, for different fluids and modes of operation can be prepared at the beginning of the project for typical fluids. This will serve to inform the process engineer calculating hydraulics for the project. For example, consider Table 2, where C1 = 5.7 $/yr/ftdia/ftlin (see box, p.42); utility cost = $0.10 /KWh; pump efficiency = 0.6; continuous operation is defined as 8,000 h/yr; and intermittent operation is defined as 2,000 h/yr. The analysis could be set up as in Table 2. Edited by Scott Jenkins

References
1. U.S. Energy Information Administration, Annual Energy Review (AER). 2008. 2. Edgar, F.T., and Himmelblau, D.M. Optimization of Chemical Processes, 2nd ed. McGraw-Hill, N.Y., 2001. 3. Holland, F.A., Watson, F.A. and Wilkinson, J.K. Introduction to Process Economics, 2nd ed. John Wiley & Sons, Hoboken, N.J., 1983. 4. Project estimated cost data, 2009.

Fluid B (Naphtha) Intermittent 6.2 7.1 8.5 Continuous 3.9 4.5 5.4

Continuous 3.4 3.9 4.7

. Naphtha density = 40 lb/ft3 and Water density = 62 lb/ft and viscosity = 1 cP viscosity = 0.3 cP. Different fluids and mass flowrates can be added to the table as required.

Authors
Rajiv Narang is senior process specialist at Fluor Daniel India Pvt. Ltd. (14th floor, DLF Square, Jacaranda Marg, DLF City Phase II, Gurgaon 122 022, India; Email: rxnarang@gmail.com). For more than twenty years, Narang has been involved with the operation and design of petroleum, natural gas and LNG plants, pipelines, and power plants. He holds a B.S.ChE from I.I.T Delhi as well as an MBA. Narang has worked with Bechtel, WorleyParsons and the Gas Authority of India. He is a member of the Indian Institute of Chemical Engineers (IIChE) as well as AIChE. Subodh Sarin, process specialist, joined Fluor in 1998 after working for eight years at Ranbaxy Laboratories. At Fluor, he developed diverse experience in the detailed engineering design of various petroleum refinery ISBL units and for utility & offsites. He is a member of IIChE.

56 lb/s mass flowrate and 200 h/yr of operation with the remaining parameters unchanged. A capital cost coefficient of $6/(yr ftdia ftlin) and 8,000 h of operation yields a selected pipe size of 8 in., while 200 h of operation gives a selected pipe size of 6 in. The optimum velocity is 6 ft/s and 20 ft/s correspondingly. The above analysis does not take into account other factors, like maximum safe velocity or erosion velocity. A variation of the case was considered to examine the change for gases using a gas with a mass flowrate of 28 lb/s, density 0.936 lb/ft3 and viscosity 0.00000672 lb/(ft s). For this case, the remaining parameters are unchanged. Results are plotted in Figure 3.

Key tips

Use the following tips to help make selections of pipe sizes at the investment stage: 1. The optimum diameter is less sensitive to capital cost variation until

diameters of about 10 in. It may be worthwhile to calculate the optimum diameter above 12 in., the point at which optimum diameter becomes quite sensitive to capital cost. 2. It may be worthwhile to calculate the optimum diameter when the number of hours per year of operation is fewer, such as for sump pump service, as this is an opportunity to choose a lower diameter than usual, and thus save on capital cost. 3. The optimum velocity is inversely proportional to 0.344, so when density doubles, the optimum velocity decreases by about 20%. Thus, optimum velocity for water and hydrocarbons will be significantly different. For gases, the variation in density along the pipe adds complications to the above analysis, but the conclusion is that varying densities offer opportunities to optimize line sizes. 4. When mass flowrate doubles, optimum velocity increases by 6%. The engineer can justify higher velocities

Anu Anna George is an associate design engineer in the process department at Fluor Daniel India Pvt. Ltd. (same address as above). She holds a B.E. (Hons.) degree in chemical engineering from Birla Institute of Technology & Science (BITS), Pilani. She is currently working on a delayed coker project.

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