Cost estimate

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Welcome to this presentation.
It explains how the investment cost for an Oil & Gas facility is estimated.
After a short introduction, the 3 common methods of cost estimate are shown.
Common ratios, such as $/kg for equipment, pipe etc. are given.

Comments are most welcome (herve.baron@gmail.com), which I will incorporate for the benefit of all.

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Cost estimate

  1. 1. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Welcome to this presentation. It explains how the investment cost for an Oil & Gas facility is estimated. After a short introduction, the 3 common methods of cost estimate are shown. Common ratios, such as $/kg for equipment, pipe etc. are given. Please download this file so that you can see my trainer’s notes in the top left corner – latest Acrobat Pro feature. Hervé Cost estimate of Oil & gas facilities
  2. 2. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Cost estimate of Oil & gas facilities Place your mouse over here Please download this file to access my notes in the top left corner
  3. 3. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Please download this file to access my notes in the top left corner Cost estimate of Oil & gas facilities Place your mouse over here
  4. 4. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Agenda Introduction The different estimation methods: • Capacity factored • Equipment factored • Analytical Cost estimate of Oil & gas facilities
  5. 5. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron What will be the overall cost of this facility?
  6. 6. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Cost = ∑ Quantities * item costs How would you determine quantities? All items
  7. 7. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Quantities estimates: •Ratio from past projects •Material Take-Off
  8. 8. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Cost = ∑ Quantities * item costs How would you determine quantities? What is an item cost made of? All items
  9. 9. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Item cost = Supply cost + installation cost How would you each one?
  10. 10. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Item cost estimates: Supply + installation •In-house data from past projects •Inquiries
  11. 11. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Item cost estimates: Supply + installation •In-house data from past projects •Inquiries Sensitivity to: Raw materials
  12. 12. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Item cost estimates: Supply + installation •In-house data from past projects •Inquiries Sensitivity to: Raw materials •Steel, alloy steel, copper, cement, iron
  13. 13. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Item cost estimates: Supply + installation •In-house data from past projects •Inquiries Sensitivity to: Raw materials Construction market
  14. 14. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Sensitivity to: Raw materials Construction market
  15. 15. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Purpose of estimate: • Concept screening • Study of feasibility • Decision to invest Estimate type: • Capacity factored • Equipment factored • Analytical
  16. 16. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Purpose of estimate: • Concept screening • Study of feasibility • Decision to invest Estimate type: • Capacity factored • Equipment factored • Analytical
  17. 17. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Capacity factored C1/C2 = (P1/P2)e e ~ 0.6 Ci: Cost of facility with production capacity Pi
  18. 18. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Capacity factored C1/C2 = (P1/P2)e e ~ 0.6 Ci: Cost of facility with production capacity Pi Exercise: what is the increase in cost for +50% capacity increase?
  19. 19. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Exercise: what is the increase in cost for +50% capacity increase? In your opinion, what is the limit of such estimate? • Capacity factored C1/C2 = (P1/P2)e e ~ 0.6 Ci: Cost of facility with production capacity Pi
  20. 20. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Exercise: what is the increase in cost for +50% capacity increase? In your opinion, what is the limit of such estimate? It takes into account neither market conditions nor plant location (labour cost) • Capacity factored C1/C2 = (P1/P2)e e ~ 0.6 Ci: Cost of facility with production capacity Pi
  21. 21. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Equipment factored C = f M C: total installed cost of facility M: cost of main equipment f: factor
  22. 22. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Equipment factored C = f M C: total installed cost of facility M: cost of main equipment f: factor Note: Typical figures for Petrochemical Plant
  23. 23. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron What’s the main equipment? • Equipment factored C = f M C: total installed cost of facility M: cost of main equipment f: factor
  24. 24. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron
  25. 25. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron How is the cost of main equipment evaluated?
  26. 26. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Process design PFDs H&M balance
  27. 27. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Equipment factored C = f M f: factor f depends on – type of facility (petrochemical, refining, LNG, off-shore) – Size
  28. 28. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Equipment factored C = f M f: factor f depends on – type of facility (petrochemical, refining, LNG, off-shore) – Size Typical figures for a chemical plant In your opinion, how can we refine the estimate?
  29. 29. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Equipment factored C = ∑ fi Mi Mi Cost of all type i Main equipment fi: factor
  30. 30. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Equipment factored C = ∑ fi Mi Mi Cost of all type i Main equipment fi: factor Why do you think justifies such an approach?
  31. 31. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Equipment factored C = ∑ fi Mi Mi Cost of all type i Main equipment fi: factor Why do you think justifies such an approach?
  32. 32. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Equipment factored C = ∑ fi Mi Mi Cost of all type I Main equipment fi: factor In your opinion, what is the limit of such estimate?
  33. 33. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Analytical – Main equipment supply + install – Piping supply + install – Electrical supply + install – Instrumentation & Control system supply + install – Civil Works – Steel structures – Painting, Insulation – Temporary construction facilities – Engineering & Project Management – Miscellaneous
  34. 34. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Analytical – Establish the bill of quantities (BOQ) in each trade: equipment, civil, piping, structural steel etc. – BOQ = Material Take-Off (what is measured from available drawings at this stage) + allowances for design development + allowances for what is not yet on drawings + contingencies – Apply ratios to get supply + installation cost – Installation cost = qty * manhours/ton ratio * labour cost – Labour cost is all in, i.e., includes construction equipment (crane, scaffolding) – The ratio is based on standard manhours, i.e., home country, – Localization factor (productivity) to be applied, i.e., actual installation manhours = ratio * productivity – Example: piping installation cost, ratio: 250 std h / ton • Western Europe, labour cost $100/hr yields $20k/ton • Middle East, labour cost $18/hr, productivity 2.5 yeilds $16k/ton
  35. 35. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Analytical – Main equipment supply + install – Piping supply + install – Electrical supply + install – Instrumentation & Control system supply + install – Civil Works – Steel structures – Painting, Insulation – Temporary construction facilities – Engineering & Project Management – Miscellaneous
  36. 36. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Main equipment supply + install • Supply
  37. 37. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Main equipment supply + install • Supply: eqt list (dimensions) => weight
  38. 38. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Process design PFDs H&M balance
  39. 39. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Main equipment supply + install • Supply: eqt list (dimensions) => weight • Rate?
  40. 40. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Main equipment supply + install • Supply: eqt list (dimensions) => weight • Rate: USD 4/kg for CS – depends on eqt size: 4 (large) – 10 (small) USD12/kg for SS USD 300-500 /m2 for Shell&Tube / Air-coolers USD 1000/kW for pumps Important note: the above ratios – and the following ones - are the ones obtained by large EPC Contractors ordering large quantities (USD 1bln jobs). Higher ratios must be used on smaller jobs!
  41. 41. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Main equipment supply + install • Supply: eqt list, dimensions/capacity/weight • Installation
  42. 42. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Main equipment supply + install • Supply: eqt list, dimensions/capacity/weight • Installation ratios: % supply cost, typ. 8%
  43. 43. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Main equipment supply + install • Supply: eqt list, dimensions/capacity/weight • Installation ratios: % supply cost, typ. 8% 30 std manhours/ton (includes labour and equipment)
  44. 44. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Analytical – Main equipment supply + install – Piping supply + install – Electrical supply + install – Instrumentation & Control system supply + install – Civil Works – Steel structures – Painting, Insulation – Temporary construction facilities – Engineering & Project Management – Miscellaneous
  45. 45. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: ratio (eqt weight), typ. 40%
  46. 46. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: ratio f (eqt number)
  47. 47. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: ratio f (eqt number)
  48. 48. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: ratio f (eqt number) Remark: Unit vs Interconnection
  49. 49. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: ratio (eqt number, eqt weight) MTO
  50. 50. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Process design PFDs H&M balance P&IDs
  51. 51. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron PFDs H&M balance P&IDs Process design Plot Plan Equipment list
  52. 52. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron P&IDs Plot Plan Piping Layout
  53. 53. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron A unique synthesis for the busy Project professional  270 pages  300 illustrations For more information on Engineering, refer to:
  54. 54. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron For more information on Engineering, refer to: Table of Contents
  55. 55. HERVE BARON The Oil & Gas Engineering Guide 2nd edition Order direct on the publisher website: http://www.editionstechnip.com/en/catalo gue-detail/1111/oil-gas-engineering-guide- the.html
  56. 56. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: MTO
  57. 57. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: MTO » Item count: P&IDs » Lengths: Piping Layout
  58. 58. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: MTO » Item count: P&IDs » Lengths: Piping Layout  Both Process & Utility lines  Both Above Ground & Underground lines, Fire water
  59. 59. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: MTO » Item count: P&IDs » Lengths: Piping Layout  Both Process & Utility lines  Both Above Ground & Underground lines, Fire water Allowances added for:
  60. 60. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: MTO » Item count: P&IDs » Lengths: Piping Layout  Both Process & Utility lines  Both Above Ground & Underground lines Allowances added for:  what is not taken-off, e.g., small diameter and design development (P&ID completion) to obtain quantities to erect
  61. 61. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: MTO » Item count: P&IDs » Lengths: Piping Layout  Both Process & Utility lines  Both Above Ground & Underground lines Allowances added for:  what is not taken-off, e.g., small diameter and design development (P&ID completion) to obtain quantities to erect
  62. 62. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: MTO » Item count: P&IDs » Lengths: Piping Layout  Both Process & Utility lines  Both Above Ground & Underground lines Allowances added for:  what is not taken-off, e.g., small diameter and design development (P&ID completion) to obtain quantities to erect  cut and losses to obtain quantities to be supplied
  63. 63. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: ratio (eqt number, eqt weight) MTO • Rate Supply
  64. 64. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: ratio (eqt number, eqt weight) MTO • Rate Supply $ /kg, typ. USD 3 /kg for CS
  65. 65. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: ratio (eqt number, eqt weight) MTO • Rate Supply $ /kg, typ. USD 3 /kg for CS Install
  66. 66. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Piping supply + install • Qty: ratio (eqt number, eqt weight) MTO • Rate Supply $ /kg, typ. USD 3 /kg for CS Install std mhrs/ton, typ. 200-250 in unit, 100 on interconnecting pipe-racks, applied to the total piping weight, including fittings & valves.
  67. 67. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Electrical supply + install • Price ratio % Main equipment, typ. 15-20%
  68. 68. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Electrical supply + install • Price ratio % Main equipment, typ. 15-20% • Quantities: Consumers list • Rate (supply+install): USD 50k / consumer (w/o generation) USD 520 / installed kW
  69. 69. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Plot Plan Single Line Diagram Consumers list
  70. 70. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Plot Plan Single Line Diagram Consumers list
  71. 71. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Instrumentation & Control system supply + install • Price ratio % Main equipment, range: 40-120%
  72. 72. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Instrumentation & Control system supply + install • Price ratio % Main equipment, range: 40-120% • Qties
  73. 73. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Instrumentation & Control system supply + install • Price ratio % Main equipment, range: 40-120% • Qties nb equiv. loops (CV, 0.5 ON/OFF, Analyser)
  74. 74. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Instrumentation & Control system supply + install • Price ratio % Main equipment, range: 40-120% • Qties nb equiv. loops (CV, 0.5 ON/OFF, Analyser) • Rate
  75. 75. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Instrumentation & Control system supply + install • Price ratio % Main equipment, range: 40-120% • Qties nb equiv. loops (CV, 0.5 ON/OFF, Analyser) • Rate supply: $ /equivalent control loops, typ. 90k install: hrs / equivalent control loops, typ. 750
  76. 76. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Instrumentation & Control system supply + install • Price ratio % Main equipment, range: 40-120% • Qties Instrument list
  77. 77. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Instrumentation & Control system supply + install • Price ratio % Main equipment, range: 40-120% • Qties Instrument list • Rate Supply+install: $ / I/O, typ. 1000
  78. 78. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Civil Works • Price Ratio % Main equipment cost, typ. 15-20%
  79. 79. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Civil Works • Price Ratio % Main equipment cost, typ. 15-20% • Qty
  80. 80. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Civil Works • Price Ratio % Main equipment cost, typ. 15-20% • Qty Dimensions/Weight of equipment & structure => size of foundations (m3)
  81. 81. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Civil Works • Price Ratio % Main equipment cost, typ. 15-20% • Qty Dimensions/Weight of equipment & structure => size of foundations (m3) • Rate
  82. 82. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Civil Works • Price Ratio % Main equipment cost, typ. 15-20% • Qty Dimensions/Weight of equipment & structure => size of foundations (m3) • Rate all-in (materials & labour) rate $/m3, typ. 1000
  83. 83. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Civil Works • Price Ratio % Main equipment cost, typ. 15-20% • Qty MTO: excavation, formwork, rebar, etc.
  84. 84. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Civil Works • Price Ratio % Main equipment cost, typ. 15-20% • Qty MTO: excavation, formwork, rebar, etc. • Rate Mhrs/operation + labour cost
  85. 85. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Steel structures • Price Ratio % Main equipment cost, typ. 10-30%
  86. 86. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Steel structures • Price Ratio % Main equipment cost, typ. 10-30% • Qty Ratio
  87. 87. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Steel structures • Price Ratio % Main equipment cost, typ. 10-30% • Qty Ratio pipe-racks: 90% of piping weight platforms: 10% of equipment weight
  88. 88. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Steel structures • Price Ratio % Main equipment cost, typ. 10-30% • Qty Ratio pipe-racks: 90% of piping weight platforms: 10% of equipment weight • Rate
  89. 89. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Steel structures • Price Ratio % Main equipment cost, typ. 10-30% • Qty Ratio pipe-racks: 90% of piping weight platforms: 10% of equipment weight • Rate Supply USD 2/kg Erection 20 std manhours/t
  90. 90. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Analytical – Main equipment supply + install – Piping supply + install – Electrical supply + install – Instrumentation & Control system supply + install – Civil Works – Steel structures – Painting, Insulation
  91. 91. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Painting, Insulation • Price ratio % eqt, piping, str cost, typ. 5% each
  92. 92. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Painting, Insulation • Price ratio % eqt, piping, str cost, typ. 5% each • Qty MTO
  93. 93. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Painting, Insulation • Price ratio % eqt, piping, str cost, typ. 5% each • Qty MTO • Rate supply + install h / m2 typ. 0,5 for painting 1,5 for (hot) insul.
  94. 94. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Analytical – Main equipment supply + install – Piping supply + install – Electrical supply + install – Instrumentation & Control system supply + install – Civil Works – Steel structures – Painting, Insulation – Temporary construction facilities – Engineering & Project Management – Miscellaneous
  95. 95. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Temporary Construction facilities • Ratio % total cost, typ. 5% for new site • Detailed
  96. 96. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Analytical – Main equipment supply + install – Piping supply + install – Electrical supply + install – Instrumentation & Control system supply + install – Civil Works – Steel structures – Painting, Insulation – Temporary construction facilities – Engineering & Project Management – Miscellaneous
  97. 97. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Engineering & Project Management = all Project services • Price ratio % total cost, typ. 15%
  98. 98. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Engineering & Project Management = all Project services • Price ratio % total cost, typ. 15% • Qty ratio
  99. 99. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Engineering & Project Management = all Project services • Price ratio % total cost, typ. 15% • Qty ratio hrs / eqt item, typ. 1800 for Refining, 2500 for gas, 4000 for LNG
  100. 100. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Engineering & Project Management = all Project services • Price ratio % total cost, typ. 15% • Qty
  101. 101. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Engineering & Project Management = all Project services • Price ratio % total cost, typ. 15% • Qty home office: tasks list + std manhours field supervision: ratio to labour, typ. 1/7
  102. 102. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Analytical – Main equipment supply + install – Piping supply + install – Electrical supply + install – Instrumentation & Control system supply + install – Civil Works – Steel structures – Painting, Insulation – Temporary construction facilities – Engineering & Project Management – Miscellaneous – Contractor’s cost
  103. 103. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Miscellaneous • Earthworks: always specific • Special foundations • Infrastructures: roads, buildings • Spare parts, typ. 5% main equipment cost • First fill (catalyst, lubes, chemicals)
  104. 104. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Analytical – Main equipment supply + install – Piping supply + install – Electrical supply + install – Instrumentation & Control system supply + install – Civil Works – Steel structures – Painting, Insulation – Temporary construction facilities – Engineering & Project Management – Miscellaneous – Contractor’s cost
  105. 105. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Contractor’s cost – profit, – risks, – sales cost,
  106. 106. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron • Contractor’s cost – profit, typ. 7% – risks, – sales cost, typ. 10-15%
  107. 107. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron – Main equipment supply + install – Piping supply + install – Electrical supply + install – Instrumentation & Control system supply + install – Civil Works – Steel structures – Painting, Insulation – Temporary construction facilities – Engineering & Project Management – Miscellaneous: catalysts etc. – Contractor’s cost
  108. 108. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Main features: • Different level of Cost estimate accuracy – Feasibility study +/-30% accuracy – Final Investment Decision (FID) +/- 10% Which of the methods we have seen would you use for each case?
  109. 109. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Main concepts: • Different level of Cost estimate accuracy • Factored / Detailed • Qty estimate: allowances for design development • Rates: – In-house historical data – similar Plant – Cost estimate: Contingencies for cost escalation – Inquiries + provisions for cost adders (supplies), additional works/re-works (construction) • Direct costs / Indirect costs
  110. 110. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron Historical evolution: + Increased instrumentation & control costs - Engineering low cost centers - Low cost sourcing – 20% cheaper - Increase in productivity (3D model) + Additional requirements: safety, environment
  111. 111. HERVE BARON Cost estimate of Oil & gas facilities ©2013–HervéBaron A unique synthesis for the busy Project professional  270 pages  300 illustrations For more information on Engineering, refer to:
  112. 112. HERVE BARON The Oil & Gas Engineering Guide - 2nd edition Discipline presentation: activities and deliverables Table of Contents The overall process Methods & tools
  113. 113. HERVE BARON The Oil & Gas Engineering Guide - 2nd edition Table of Contents Discipline presentation: activities and deliverables
  114. 114. HERVE BARON The work of each Engineering discipline is described
  115. 115. HERVE BARON Design activities are explained, e.g., Plant Equipment layout
  116. 116. HERVE BARON Complex activities, such as QRA, are explained through a practical example.
  117. 117. HERVE BARON How are materials of construction selected ?
  118. 118. HERVE BARON How and when are Piping Materials ordered?
  119. 119. HERVE BARON A sample of all common Engineering documents is included
  120. 120. HERVE BARON A sample of all common Engineering documents is included Use this to specify what you want to your Engineering supplier !
  121. 121. HERVE BARON Verify the contents of engineering documents with check lists.
  122. 122. HERVE BARON Difference between Engineering and Shop drawings
  123. 123. HERVE BARON Understand the main technical aspects, e.g., DCS vs ESD
  124. 124. HERVE BARON The common 2 types of package control
  125. 125. HERVE BARON The different Plant drainage systems
  126. 126. HERVE BARON The dynamic forces to which an Off-Shore Plant is subject
  127. 127. HERVE BARON The Oil & Gas Engineering Guide - 2nd edition Table of Contents The overall process
  128. 128. HERVE BARON Use this as standard, question deviations.
  129. 129. HERVE BARON Understand the new 3D-model centered engineering process
  130. 130. HERVE BARON Know the interfaces between disciplines... and with Vendors
  131. 131. HERVE BARON Understand what drives the Project schedule
  132. 132. HERVE BARON The Oil & Gas Engineering Guide - 2nd edition Table of Contents Methods & tools
  133. 133. HERVE BARON Use these methods as standard, question deviations.
  134. 134. HERVE BARON Implement powerful procedures
  135. 135. HERVE BARON Request meaningful progress reports
  136. 136. HERVE BARON Implement effective Project Control
  137. 137. HERVE BARON The Oil & Gas Engineering Guide - 2nd edition This book is destined to both:  Oil & Gas companies Project execution personnel  Oil & Gas contractors Project execution personnel
  138. 138. HERVE BARON The Oil & Gas Engineering Guide 2nd edition If your are on the Client side, i.e., contracting Engineering services, this book will help you to:  Specify to an Engineering supplier what you want: what deliverables and with what contents,  Set a standard in Engineering execution that you and your supplier can adhere to: design stages/gates, methods to be used, etc.  Specify the progress report you want, with the meaningful indicators,  Ask the right questions to assess the true progress,
  139. 139. HERVE BARON The Oil & Gas Engineering Guide 2nd edition If your are on the Contractor side, i.e., performing Engineering activities, this book will help you to:  Understand the work of each discipline and the overall picture,  Challenge what one discipline tells you,  Understand the critical areas,  Put in place the right methods to be successful,
  140. 140. HERVE BARON The Oil & Gas Engineering Guide 2nd edition Order direct on the publisher website: http://www.editionstechnip.com/en/catalo gue-detail/1111/oil-gas-engineering-guide- the.html

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