Process Industry Economics: Principles, Concepts and Applications

Cover
Front matter
Copyright
Preface
Acknowledgements
1
The scope of process industry economics
	Gifts and challenges of resources
	The role and constraints of process industries and their products
	Process industry projects
	Consumption and generation of funds
	Driving forces and influences for success
	The global context of the process industries
	Personnel organisation and interaction
	Ethics in project evaluation and management
	Outline of this book
2
Market evaluation and forecasting
	The importance of markets
		The financial context
		The chemical engineering context
		The environmental, safety, and sustainability context
	Uncertainties in market forecasting
	Product classification
	Estimation of market volume
		End use analysis
		Statistical analysis and projection
		Correlations with economic indicators
		Comparison of per capita consumptions
	Selling price estimation and forecasting
		Price elasticity
		Price histories for raw materials and products
		Assessment of selling price data
	Resource production, consumption, and reserves
	Data sources for production and prices of fuels, raw materials, and products
	Selected case histories
		Case A. Natural gas
		Case B. Sodium cyanide
		Case C. Ethylene
			Production origins in the United States of America
			Feedstocks for ethylene production
			Ethylene derivatives
			Trends in demand, production cost, and selling price
			Current production and scale of new plants
	References
3
Capital cost estimation
	Capital requirements and sources
	Land costs
	Fixed capital investment
		Outside battery limits investment
		Inside battery limits investment
	Plant cost estimation by extrapolation from known plant cost data
		Capacity adjustment
		Location factors
		Plant cost inflation indices
	Data sources for plant and equipment costs
		Plant costs
			Example A. Treatment of metallurgical smelter gases containing sulphur dioxide
			Example B. Electricity generation
			Example C. Natural gas extraction and treatment
			Example D. Petroleum refining
			Example E. Ammonia production
			Example F. Hydrogen production
		Equipment cost data
	Plant cost estimation by factoring purchased equipment costs
		Factors applied to the sum of purchased equipment costs
		Factors applied to individual equipment items
		Relevance of factored cost estimates to chemical engineering
	Detailed estimation of plant and equipment costs
	Computer applications in fixed capital cost estimation
	Cost of revamps
	Estimation of start-up capital
	Estimation of working capital
		Raw material stocks
		Finished product stocks
		Materials in progress inventory
		Accounts receivable (or debtors)
		Accounts payable (or creditors)
		Other contributions and considerations
	References
4
Operating cost estimation
	Scope and classification of operating costs
	Raw material costs, consumptions, and prices
	Utilities
		Utilities consumption
		Unit costs of utilities
	Personnel costs
		Effects of process technology, complexity, and scope
		Effects of capacity
		Effects of time and technological progress
		Effect of location
	Estimating process labour requirements and costs
		Payroll overheads
		Consumable stores
	Plant (or works) overheads
	Depreciation costs
	Land taxes
	Insurance
	Maintenance
	Royalties
	Packaging
	Nonmanufacturing costs
		Distribution costs
		Selling expenses
		Research and development
		Corporate administration
	Capital recovery and financial expenses
	Factored approach to operating costs
	Effect of inflation on operating costs
	Scale influences on production costs
	Calculating and presenting overall plant operating costs
	Data sources for operating costs
	References
5
Evaluation of project profitability
	Introduction
	Cash flow estimation
	Measures of profitability
	Discount rate selection
	Reviewing profitability indices
	Cost minimisation
	Dealing with inflation in cash flow evaluation
		Discount rate selection
	Effect of financing on cash flows
	Sensitivity analysis and risk assessment
	Influence of sunk costs
	Competitive analysis
	References
6
Some examples in process economics
7
Process technology evolution and adoption
	Introduction
	Time dependence of process technology performance
	Initiation phase of technology
	Growth phase of technology
	Intensification
	Economies of scale
		Scale-up or scale-out
	Maturity
	Modelling performance improvement
	Factors influencing learning
		Environmental learning
		Process safety learning
		Sustainability learning
		Ongoing challenges in sustainability
	Introduction of technological change into new and operating plants
	Technological forecasting
	Use of S curves
	References
	Further reading
8
Capital investment decisions
	Expenditure proposals
	Shaping and scoping projects
	Projects involving the replacement of plant and equipment
	Environmental projects
		Environmental assessment
		Economic assessment of environmental effects or benefits
		Application of a cost-benefit approach in process industry cases
		Some economic incentive instruments
	Safety projects
	Capacity planning
		The need for capacity planning
		Technical and economic considerations in expanding an existing plant
		Cost and performance changes in expansions
		Factors contributing to noncompetitiveness in expanded plants
			Plant scale
			Equipment scale
			Process efficiency
			Safety and environmental standards
		Risks and uncertainties in expanding existing plants
			Extent of downtime to carry out plant modifications
			Determining the plant capacity distribution and potential for debottlenecking
			Assessment of the ultimate life and capacity of the plant
			Ability to provide an adequate rate of capacity growth to match market growth
		Optimum capacity of a new plant
		Designing new plants with capability of future expansion
			Provision of adequate space
			Provision of access points for measurement
			Judicial provision of capacity margins in selected equipment items
		Choosing between a new plant and expansion of an existing plant
	Need for an industrial ecology-Capital, location, organisation implications
	Some cases involving challenges for sustainable investment decisions
		Transition from mercury to membrane cell reactors in chlor-alkali plants
		Capture and utilisation of sulphur dioxide from metallurgical smelters
		IGCC with and without carbon capture
		Natural gas export from Australias East Coast
		Regasification of LNG as a supply option for the East Coast
	Reviewing completed projects
	Recommendation for further reading
	References
9
Industry planning and structure
	Industry classification
	Towards a taxonomy for the process industries
	Suggested checklist for a taxonomy for the process industries
		Markets
		Feedstocks
		Process route and process plant
		Production
		Possible government policy initiatives
		Financial performance at a company level
		Administration
		Impact on other industries and other sectors of the economy
		National macroeconomic performance indicators
	Integration of process operations and industrial companies
		The chemical processing site
		The wider business and industrial context
	Location influences
	Industry ownership
	Industry organisations
	Professional societies
	Government bodies
	Chemical engineering contribution to government policy development
	Industry data sources
		Example A. 2018 Elements of the Business of Chemistry [12] published by the American Chemical Council
		Example B. Facts and Figures 2018 of the European Chemical Industry [13] published by CEFIC, the European Chemica ...
		Example C. Resources and Energy Quarterly [14] published every 3months by the Department of Industry, Innovation, ...
	Human resource contributions
	References
Glossary
Appendix 1
Appendix 2
Appendix 3
Appendix 4
	References
Appendix 5
Index
Back Cover