The Piping is The Problem

These days, companies participating one way or another in the construction of process facilities and pipelines are being pressured to consider more potential projects than ever before, with tighter requirements and less time. It is not merely to seek optimal return on investment; highly-variable global conditions demand great agility in responding to shifting opportunities and uncertain risks.

Ken, head of estimating in a typical mid-sized Texas EPC contractor, was facing the constant need to keep up with strong company growth. Generally, the process design team could provide very reliable cost numbers for the pieces of equipment in a facility. And as the numbers of projects and alternatives grew, they were still able to provide good costs for the equipment items.

The problem Ken was facing was that the process team could not provide very much direction when it came to the piping which connected the equipment pieces together. Ken had some P&ID drawings, a plot plan, and often had to take it from there, visualizing how the lines might be laid out and guesstimating fittings and line segments. This process required time and careful consideration. The number of projects was increasing, but the number of hours in the week was not. Ken was in a bind.

Compounding Ken’s problems was the difficulty keeping up-to-date price information for the many components of a pipe price, especially since some of them relied on vendor quotes for piping sub-assemblies, not just individual parts.

The piping component of a typical facility construction estimate accounts for significant part of the total facility cost, and is definitely the most complex part and time-consuming to put together. Each line must have physical dimensions and a route from source to destination that defines how many fittings and piping are needed for the line. Also, other attachments need to be defined and accounted for.

Ken, like most cost estimators, relied heavily on an in-house-developed system of spreadsheets, which generally worked very well. The estimators in Ken’s company understood them, and could tweak them as required. For the equipment, site, and other plant considerations, the spreadsheets were working fine.

When it came to piping, however, Ken found that keeping on top of up to date prices was a huge challenge. It made each estimate much more cumbersome since so much of the process was devoted to making sure that the costs were reliable.

Relief for Ken’s problems in this regard were found in using QSoft’s QPipe costing software. Ken was able to easily load his take off information into QPipe, and once he had tuned a few assumptions, he was able to achieve a great estimate for his specific region, using updated prices and labour factors, at a fraction of the effort.

QPipe puts together the estimate for all the assemblies and sub-assemblies from an internal database of over 500,000 prices and an intimate knowledge of the piping fabrication and installation process. No vendor quotes are required, and QPipe’s database is updated annually to the latest prices and indices for world conditions.

Ken saved over 60% of the time he spent on the piping part of estimates by moving to QPipe, and is also assured of better and more consistent prices for diverse regional conditions. QPipe paid for itself in less than 2 months of his use, and continued to provide dividends the rest of the year.

Join Ken in discovering the benefits of QPipe or QPlant! Sign up for a free trial today!

QPlant Estimator Business Value

QPlant is a cost estimating framework that estimates the Total Installed Cost (TIC) for a down or mid-stream facility or pipeline.

QPlant Cost Estimator Business Value

QPlant creates business value in two major ways: 1) by reducing the number of manhours required to perform a cost estimate, and 2) by reducing investment risk by means of precise, repeatable estimates and detailed financial analysis..

This shows a typical iteration process that a process design would go through in the early stages of a project.  The process is laborious and error-prone at the boundaries and also takes time to move from box to box. Symmetry and QPlant provide a solution to help this workflow; the separate boxes and arrows on the diagram become a single block.  QPlant’s advanced rule engine tightly interconnected with Symmetry’s process designs can save 60% of estimating hours, reduce errors, and improve consistency.

Quantifying the Value Proposition

The effort involved in a cost estimate varies with the size of the project.  This table shows some typical numbers for estimates performed during conceptual and front-end design.  The use of QPlant can improve efficiency by 250%, leading to a 500% yearly ROI.

ProjectHoursHours savedSavings per EstimatePayback(# estimates)Estimates per YearROI
$10 MM5332$3,9385.130500%
$50 MM8350$6,1883.219500%
$100 MM15895$11,8131.710500%
$500 MM240144$12,0001.17500%
$1 BB368221$27,5630.74500%

The software cost is paid for by savings in the cost of estimating hours in under 2 months, irrespective of other benefits.

Additional Advantages

  • Improved process design/costing iteration cycle encourages the best value for investment.
  • Enables 2.5x the number of estimates with the same effort
  • Improves consistency and comparisons.
  • Financial metrics reduce investment risk and support business forecasting.
  • Global productivities, costs, and conditions.
  • What-if analysis to evaluate sensitivity of cost to various contingencies.

Estimating Piping Costs in a Process Simulator

Cost estimating and process simulation software are synergistic.  Awareness of economic and logistical factors permit engineers using simulation software to better design and optimize their processes.  At the point in the project where engineers are using process simulators, however, many items which affect the costs are still unknown.

The cost of each piece of equipment in a simulation, such as a compressor, separator, or heat exchanger, can usually be estimated reasonably easily.  The equipment’s parameters are straightforward and determined by the demands of the process, so the pieces of equipment can be sized and matched against industry standard units.

Determining the cost of the piping is a harder problem, though.  Accurate costs depend on accurate prices and accurate quantities.  At the time a process engineer is using a simulator to design a working process, quantities — lengths — for piping are largely unknown.  It is most likely that not much if anything is known about the piping geometry.  Pipe rack dimensions and topology, equipment spacing, area or site considerations are all usually not defined until later in the project lifecycle.   There are also many lines, fittings, instruments, and other things associated with a typical piece of equipment which may not be part of the actual simulation but must be accounted for in the cost estimate.

So a twin challenge is that 1) the length and numbers of fittings and bends of the pipe required to carry the simulator’s streams are unknown, and 2) some piping required for the equipment or context — but not directly related to the simulation — is also unknown.

Can we solve these two problems in an elegant fashion?  By considering the use case of the typical process engineer and automating parts of the decision making process according to clear engineering and regulatory rules, we believe that we have found an excellent way to approximate reasonable input quantities and how to properly allocate the extra lines which are required for particular types of equipment.

The Use Case of the Process Engineer

When a process engineer is interested in economic factors behind a PFD, it is often for comparative purposes.  One can assume that equipment spacing can be mostly  placed according to insurance and industry guidelines about distances between unit operations.  Variations in assumptions due to site-specific factors can mostly be considered from the process simulation point of view as irrelevant since they tend to cancel each other out across multiple scenarios.

Engineering rules can be formulated to determine what package of instruments, ancillary lines and other costs accompany each piece of equipment.

The algorithms which allow a reasonably precise automated layout and estimate of piping component quantities will be explored as topics of further posts.