23-Chem-A5 Chemical Plant Design and Economics · December 2019
Question 6 of 6: Ten Steps in a Process Study for Expanding an Existing Configuration
Nivaar worked solution (AI-drafted; not reviewed by a licensed engineer)
Notes on this paper
National Exams / EGBC — December 2019 — 16-Chem-A5 Chemical Plant Design and Economics. Three-hour closed-book examination; one aid sheet (both sides) and an approved Sharp/Casio calculator are permitted. Six questions are printed and any five constitute a complete paper (each worth 20 marks); all six are solved below for completeness. The two calculation questions (Q3, Q4) are worked with explicit engineering-economy factors; the four discussion questions (Q1, Q2, Q5, Q6) are answered as structured lists with supporting description, as the paper directs.
Reference texts: M. S. Peters, K. D. Timmerhaus & R. E. West, Plant Design and Economics for Chemical Engineers (5th ed., McGraw-Hill) — profitability measures (rate of return, incremental analysis), straight-line depreciation, after-tax cash flow, and the anatomy of a process/economic study; R. Turton, R. C. Bailie, W. B. Whiting & J. A. Shaeiwitz, Analysis, Synthesis, and Design of Chemical Processes (4th ed., Prentice Hall) — the process flow diagram and its information content, equipment/economics; G. Towler & R. Sinnott, Chemical Engineering Design (Coulson & Richardson Vol. 6, 2nd ed.) — utilities, offsites and storage; O. Levenspiel, Chemical Reaction Engineering (3rd ed.) and H. S. Fogler, Elements of Chemical Reaction Engineering — reactor scale-up. Engineering-economy factors follow the standard notation $(A/P,i,n)$ and $(P/A,i,n)$; as the question specifies straight-line depreciation, that method is used throughout (rather than the Canadian CCA declining-balance system).
Question 6: Ten Steps in a Process Study for Expanding an Existing Configuration (20 marks)
Overview. A process study is a structured technical-and-economic evaluation that converts management’s production objectives into a defined, justified project. For an expansion by adding a new group of plants, the ten important steps are as follows.
Define the objectives and scope. Translate management’s stated production objectives into a specific project — the products, the additional capacity, the required timing, and the battery limits of the new group of plants relative to the existing facility.
Establish the design basis. Fix feedstock availability and specifications, product specifications, site conditions, and the utilities and offsites already available; identify the tie-in points to the existing configuration.
Identify and screen processing routes. Survey the possible process routes and configurations (literature, patents, licensors, in-house know-how) that could meet the objective, and screen out those that are clearly inferior on technical or commercial grounds.
Develop preliminary flowsheets and material/energy balances. For each surviving alternative, synthesise a block/process flow diagram and compute the material and energy balances that fix stream flows, compositions and duties.
Size the major equipment, utilities and offsites. From the balances, perform preliminary sizing of the major equipment and determine the incremental utility and offsite (storage, effluent, loading) requirements the expansion imposes on the site.
Estimate the capital investment. Prepare a study-grade fixed-capital estimate for each alternative, including the new plants, the required utility and offsite additions, and the tie-ins and modifications to the existing plant.
Estimate the operating (production) cost. Estimate the annual cost of manufacture — raw materials, utilities, operating labour, maintenance, and overheads — for each alternative at the design throughput.
Evaluate profitability. Project the incremental revenue and apply the company’s profitability measures — rate of return (IRR/DCFRR), net present value, and payback — on an after-tax, incremental basis relative to the existing operation.
Compare alternatives and carry out a sensitivity/risk analysis. Rank the alternatives on combined technical, economic, safety and environmental grounds, and test the ranking against uncertainty in price, capital cost and capacity to confirm the best configuration for achieving the same objective.
Prepare the study report and recommendation. Document the selected configuration with its technical and economic justification, risks, schedule and required authorisation, giving management the basis for its go/no-go decision and for authorising the next (detailed-engineering) phase.
