Cost estimation errors are common in a variety of projects. Recent studies have shown the cost of machinery can represent 20 to 35 percent of a processing and manufacturing project’s total cost. The estimated costs for new plants and particularly new pump installations are very uncertain and have increased in recent years.
The following concepts minimize the cost of pump installations:
- Maximizing the extent of manufacturing and installation in the shop environment
- Simplifying a pump package’s transportation and installation
- Providing modularized components that are easy to change
- Reducing on-site personnel supports and encouraging unmanned operation
- Eliminating as many standby pumps as possible
Very limited literature is available on pump cost estimation. This column will focus on the cost estimation of the pump installations in different projects.
Pump Installation Cost Estimate
Historical data could inform pump installation cost estimation models within certain limits. Results have shown a large cost difference between different regions.
The economies of concentration play an important role in cost. Cost studies have indicated that pump installation cost components usually have economies that are to scale to pump unit capacity and pump train size.
The cost estimation of a pump unit or installation in a plant cannot be fully accurate, with the exception of the material cost, particularly the cost of a pump package. This cost can be estimated from the pump package’s vendor, and the cost of materials could be obtained from suppliers. However, other cost estimations are relatively inaccurate. Labor costs have much larger cost overruns compared to other cost components.
The following estimation concept can be employed for a pump unit or installation:
(Pump Unit Cost) = A × (Pump Package Cost) + B
The factor A is assigned for all auxiliaries and accessories required for each pump package such as the foundation, civil works, piping and additional steel structures for each pump package. This factor is usually between 1.3 and 2.5. The pump package cost includes all skid-mounted facilities such as the driver and lubrication oil system.
The factor B is assigned for all auxiliaries and accessories required for each pump unit, such as unit piping, unit utilities, protection systems, unit pit/drain, unit electrical facilities, safety equipment, unit steel structures and unit civil works.
Because the cost underestimating error is generally larger than the overestimating error, proper safety margins for factors A and B are always encouraged.
The cost is also a function of the project size or the pump system capacity. A proper set of factors should be developed for a defined range of the pump unit size and capacity for a region.
Environmental conditions—soil, terrain, cost of living, population density, economies of scale, noise limits, applicable codes and distances from pump supplies—could affect the installation cost estimation and should be considered when the cost factors are estimated.
Studies on recent pump installations have shown that the cost of civil works (site developments, foundations and others) are about 9 to 20 percent of the total cost. They have also shown that the cost of installation can be approximately 7 to 11 percent of the total cost.
The required man-hours for the installation and commissioning of pumps can vary significantly. For packaged pumps, the following indications should be noted:
- For large pump packages (more than 1 megawatt (MW)), the installation and commiss-ioning man-hours could be between 300 and 900 hours.
- For small pump packages (less than 1 MW), the installation and commissioning man-hours could be between 100 and 300 hours.
The first case study is presented for a 6 MW pumping unit. The costs of electric motor-driven pump packages are obtained in millions of U.S. dollars (MUSD):
- A 3 MW pump package: 0.9 MUSD
- A 1.5 MW pump package: 0.6 MUSD
- A 0.8 MW pump package: 0.45 MUSD
The factor A is estimated at 1.67 for these pump packages. The factor B is estimated at 1.5 MUSD for a 6 MW pump unit. Table 1 compares the cost of these different options.
As shown, smaller pumps considerably increase costs. A greater number of smaller pumps is more expensive than using a single large pump.
The second case study is presented for small pump installations. The following two options are considered:
- Option 1: A 320 kW pump, $52,000
- Option 2: A 200 kW pump, $42,000
The factor A is estimated at 1.49 for these small pump packages. The factor B is estimated at $45,000 for Option 1 and $34,000 for Option 2.
Table 2 shows the cost analysis for two options of small pumps.
Based on Table 2, only about 20 percent total installed cost reduction could be expected for a pump 38 percent smaller in size. Large pumps have economies of scale and low unit cost. In other words, unit costs of pump installations usually decrease as pump size increases.