BKF4143-PROCESS ENGINEERING ECONOMICS 11213.PDF

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1/11

Univers i t i

Ma lays ia

P H N G

Eng i n e e r i n g

r ea t i v I ty

FACULTY O F CH EM ICAL NATURAL RESO URCES ENG INEERING

FINAL EXAM INATION

CO URSE

ROCESS ENGINEERING ECONOMICS

CO URSE CO DE

KF4143

L E C T U R E R

OH]) NOOR B IN NAWI

ANWARUDDIN HISYAM

DATE

0 JANUARY 2013

DURATIO N

HOURS

SESSION SEMESTER :

ESSION

2012/2013

SEMESTER I

PROGRAMME CODE :

K B / B K C I B K G

INSTRUCTIONS TO CA NDIDATE:

This question paper consists of

FIVE (5)

questions Answ er ALL questions

2

All answers to a new q uestion should start on new page

3

All the calculations and assumptions must be clearly stated

4

Candidates are not allowed to bring any m aterial other than those allowed by

the invigilator into the exam ination room

EXAMINATION REOUTREMENTS:

PEE Student's Handbook

DO NO T TURN TH IS P AG E UNTIL YO U ARE TO LD TO DO SO

This exam ination paper con sists of

ELEVEN (11 )

printed pages including front page


2/11

CONFIDENTIAL

KB BKC BKG 12131 BKF4143

QUESTION 1

Formalin is a 37 wt% solution of formaldehyde in water. Formaldehyde and urea are

used to m ake urea-formaldehyde resins that subsequently are used as adhesives and

binders for particle board and plywood.

The Process Flow Diagram, PFD for Unit 800 Formalin production of

58 647

metric

tonnes per annumis shown in

Figure B.7.1.

All the major pieces of equipm ent are

illustrated in

Figure B 7 1

The reactor used is the type of jacketed non-agitated

reactor.

T able B.7.1, B.7.2 B.7.3

provides the inform ation for the Stream , Utility

and Major Equipment Sum maries as shown in

Figure B.7.1.

The following

Table 1

shows bare m odule costs for all major equipme nt:

Table 1: List of equipm ent and its bare module cost,

CBM.

Equipment

Bare Module Co st,

C BM

Methanol Preheater, E-801

$210,456

Air Preheater, E-802

257,890

Reactor E ffluent Cooler, E-803

W

Tower R eboiler, E-804

$315,485

Tower C ondenser, E-805

$310,782

Product Cooler, E-806

$302,896

Feed Air Com pressor, C-801

$205,780

Me thanol Feed Pump, P-801(A/B)

$60,196 X 2

Tower Reflux Pump, P-802(A/B )

$45,560X2

Product Pump, P-803(A/13)

X

Formaldehyde A bsorber, T-801

$1,850,650

FormaldehydeTower, T-802

Y

Formaldehyde Reactor, R-801

Z

Tower Reflux Drum, V-801

$350,950

a) Estimate the bare modu le cost,

C M

for the equipment as per

Table 1?

i)

Reactor E ffluent Cooler, E-803; W

(5 M arks)

ii )

Product Pump, P-803(A B); X

(4 M arks)

iii) Formaldehyde Tower, T-802;Y

(7

Marks)


3/11

CONFIDENTIAL

KB BKC BKG 121311BKF4143

iv )

ormaldehyde R eactor, R-801; Z

5 M ar k s )

Giv en other information as follows:

Reactor Effluent Co oler, E-803:-

Floating-head, shell and tube heat exchanger

Area = 28.16 m2

Material of construction = Carbon S teel.

b

Product Pump, P-803(A B)

Stainless Steel, Centrifugal Electric Driv e

Power0 .5kW

75% efficiency

c

Formaldehyde Tower, 1-802

Material of construction (tower) = Stainless steel

Diameter tower =

2 5 m

Height/Length = 19 in

31 SS siev e trays, 70% efficient trays

Max P ressure rating of 200 kPa

d

Formaldehyde Reactor, R-801

Carbon S teel, Floating head C ounter flow Exchanger

A= 140 .44 m

; Q=8,928 M J/hr; Max P res. Rating = 350 kPa

b)

Estimate the

total bare mod ule costs,

CTM)

and gra ss roots costs, CGR)

for the

facility.

(7

Marks)

c)

Using Chemical Engineering Plant Cost Index (CEPCI) , what w ould be the

C G R

value in year 2011?

2 M ar k s )


4/11

im

to Storage

Tank

P 803A/B

Figure B.7.1

Unit 8 : Formalin Process Flow Diagi:im

OT I

C r Q

t

1

t

L

t

2

C

0

C 801

601A/B

801

802 R 801801802803 E 804

805

a o l P 802 A/B P 503 A/B E 806

Feed Air

ethanol

ethanol

ir

Formaldehyde Formaldehyde Formaldehyde Reactor Towerower

ower Tower Product

roduct

Compressor Feed Pump

reheater Prehealer

Reactor

bsorber

owerffluent Reboiler Condenser Rellux Rellux

Pump

ooler

Cooler

Drum

Pump


5/11

ONFIDENTI L

KB BKC BKG 121311BKF4143

ppen dix B In forma t ion for the Pre l im inary Des ign o f E leven Che mica l Processes

8 5

Tab le B 7 1 S t ream Tab les for Un i t 800

S t re a m N u m b e r

1

2 3

4

5

Temp ( C)

25.00

30.00

40.66

40.78 183 .01

150.00

Fres kPa

101.325 120.00

101.325

300.00

300.00

265.00

Vappr fraction

1. 0

0.0

0.0

0.00

1. 0 1 0

Total kg h

4210.54

2464.75

3120.31

3120.31 145.94

99.92

Total kmol h

1.45.94

76.92

99.92

99.92

4210.54

3120.31

C o m p o n e n t k m o l h

Methanol

0. 0 76.92 94.11

94.11

0.0

94.12

O x

y

ge n

30.66 0.0 0. 0

0. 0

30.66 0 0

Formaldehyde

0. 0

0.0

0.0

0.0 0 .0

0 0

Water

0.0 0 .0 5.81

5.81

0.0

0 0

Hydrogen

0. 0

0.0

0.0 0.0

0. 0

0 0

Nitrogen

115.28 0.0 0.0

0.0

115.28 0 0

S t re a m N u m b e r

8

9

1 0 2

Temp ( C)

200.00

171.94 200.00 100.00

30.00 84.57

Pres kPa 265.00

255.00

185.00

150.00

150.00

140.00

Vapor fraction

1. 0 1.0 1.0

1.0 0. 0 1 0

Total kmol h

145.94 245.86 7330.82

7330.82

2576.15

5354.21

Total kg h

4210.54 7330.85 278 .03

278.03

143.00

224.16

C o m p o n e n t k n io t h

Methanol

0. 0

94.12

31.45 31.45

0. 0

13.35

O x yg en

30.66 30.66 0.15 0.15 0.0 0 1 5

Formaldehyde

0. 0 0.0

62.67

62.67 0. 0 0 0 4

Water 0. 0

5.81 66.82 66 .82

1.43.00 93.68

Hydrogen

0. 0 0.0 1.66

1.66

0. 0 1 6 6

Nitrogen 115.28 115.28 115.28 115.28 0. 0 1 1 5 2 8

con t inued

Table B 7 1: Stream Components


6/11

ONFIDENTI L

KB/BKC/BK G/1 21 31/BKF4J 43

A p p e n d i c e s

9 8 6

Table B 7 1 S t ream Tables for Uni t 800

C o n t i n u e d )

Stream Number

1 3

14

5

Temp ( Q

89.85

75.46

10664

Pres kPa

150.00

130.00

150.00

Vapor mole fraction

0. 0

0.0

0 0

Total kg/h

4552.75

655.56

3897.06

Total kmol/h

196.87

23.00

173.86

Component kmot/h

Methanol

18.10

17.19

0.90

Oxygen

0.00

0.00

0.00

Formaldehyde

62.63

0.00

62.63

ter

116.14

5.81

110.33

Hydrogen

0.00

0.00

0.00

Nitrogen

0.00

0.00

0.00

1 6

7

8

106.71

35.00

73.36

350.00

315.00

120.00

0. 0

0. 0

0.0

3897.06

3897.06

655.56

173.86

173.86

23.00

0.90

0.90

17.19

0.00

0.00

0.00

62.63

62.63

0.00

110.33

110.33

5.81

0.00

0.00

0.00

0.00

0.00

0.00

Table 8 7 2

Ut i li ty Stream F low Su mm ary for Unit 800

E 8 0 1

E 8 0 2

E 8 0 3

8 0 4

mps

hps cw

ps

2063 kg/h

45.43 kg

23,500 kg/h

8,949 kg/h

E 8 0 5

E 8 0 6

R 8 0 1

cw

cw

bfw - mps

775,717 kg/h

7,957 kg/h

3723 kg/h

Tab le B 7 3 Ma jo r Equ i pmen t

Sum mary for Uni t 800

Compressor

D-801 A/B (not shown on PFD)

C-801

Electric/exploSIonProof

kW (shaft)

Carbon steel

W 195kW

Centrifugal

Power = 18 3

95 efficient

continued)

0 efficient

Table B.7.1: Stream Com ponents Continued), Table B.7.2: UtililyStream and Table

B.7.3: Major Equipment


7/11

ONFIDENTI L

KB/J3KC/BKG/12131/BKF4143

Append ix B In fo rmat ion fo r the Pre l im inary Des ign o f E leven Chem ica l Processes

8

Table B 7 3 Major Equipment Summ ary for Un it 800

Cont inued)

Heat Exchangers

E 8 0 1

= 405 in '

1-2 exchanger, floating head, carbon steel

Process stream in shell

Q=4111MJ h

Maximum pressure rating of 350 kPa

E 8 0 2

= 4.62 m2


Process stream n

tubes

Q = 76 .75 MJ/h

Maximum pressure rat ing of 350 kPa

E 8 0 3

= 28.16 m2



Q

983.23 MJ/h

Maximum pressure rating of 350 kl 'a

Reactors

R-801 Heat-Exchan ger Portion

= 140.44 m2

Counterfiow exchanger, floating head, carbon

steel

Process stream in tubes

Q

8,928 MJ/h


Pumps

P8O1 A/B

Centrifugal /electric drive

Carbon steel

Power = 0 .3 kW

80 efficient

P-802 AJB

Centrifugal/electric drive

Carbon steel

Power = 1.7 kW

80 efficient

E-804

= 37.3 m2

1-2 excha nger, kettle reboiler, stainless steel


Q = 37,755 Mi/h


E 8 0 5

= 269 m2

1-2 exchanger, floating head, stainless steel


32,456 Mj/h

Maximum pressure rating of 250 kPa

E-806

= 41 m

1-2 exchanger, floating head, stainless steel

Process stream in tubes

1169.7 MJ/h

Maximum pressure rat ing of 400kPa

R-80 1, Reactor Port ion

Thin layers of si lver wire gauze suspended

above heat exchanger tube bank

P-803 A/B

Centrifugal /electric drive

Stainless steel

Power = 0 .5 kW

75 efficient

continued)

Table B.7.3 Major Equipment Continued)

7


8/11

CONFIDENTI L

KB BKC BKC 121311BKF4143

9 8 8

Table B.7.3 Major Equipment Summ ary for Unit 800

Con t i nued )

T o w ers

T-801

Carbon steel

10 m of packing

2-in ceramic Bed Saddles

20 theoretical stages

1.00 kPa/m pressure drop

Diameter = 0.86 m

Packing factor = 45

Maximum pressure ra t ing of 300 kPa

Vessel

V-801

Horizontal

Stainless steel

LI

= 4 0

Volume = 4.2

m 3

T-802

Stainless steel

31 SS sieve trays plus reboiler and partial

condenser

70 efficient trays

Feed on tray 18

Reflux ratio = 37.34

0.6096 m tray spacing, 0 .091 in weirs

Column he ight

9 m

Diameter = 2.5 in

Maxim um pressure ra t ing of 200 kl 'a

Whim simulating an entire process we recommend first using the Shortcut:

distillation column within the process for the methanol-Water/formaldehyde dis-

tillation. A rigorous column solver should then be used as a separate item to

simulate the column based on the results obtained from the shortcut column.

However due to the non-ideality of the thermodynamics the actual column sim-

TabLe 8 .7 .4 K va lues for Formaldehyde/W ater /Methano l System [2 ]

P psi a) = 14.696

T C)

Chemical Component

Formaldehyde

Water

ethanol

1

0.123

1.000

0 2 7 3

67.1

0.266

0.491

1 0 9 4

72.1

0.336

0.394

1 4 3 5

7 48

0.374

0.453

1 5 9 8

84.6

0.546

0.607

2359

97.6

0.693

1.105

2 5 8 9

99.9

0.730

1.198

2 5 9 5

150.1

1.220

2.460

3.004

T able B.7.3 Major Equipment Continued)


9/11

CONFIDENTIAL

KB/BKCIBKG/12131/BKF4143

QUESTION

A RM 200,000 process equipmen t loan at 10 interest, compo unded monthly, is

to be repaid in 48 mon thly payments.

a)

W hat is the monthly payment and the total amount repaid?

5 M arks )

b) W hat monthly deposit would have to be m ake-up at the end of eac h month for

48 m onths in order to accumulate a fund of RM 200,000 on the last deposit

date with w hich to purchase this equipment?

5 M arks )

Now, assume an interest rate of 6 compounded monthly is being paid on all

deposits. Wh at is the total of the 48 deposits? C ompare your results with those from

Part (a).

6 M arks )

QUESTION 3

In Hazwani liMP graduate chemical engineer working in Palm Oil Refinery

Plant is ev aluating several alternatives to supply electricity to the plant. N ormally,

she w ill pay RM 5 ,000,000.00 for electricity purchased from Tenag a N asional

Berhad (TNB) for the first year and expect an increase of RM 500,000.00

annually.

Alternatively, she plans to build a 5000 k W P ower P lant. His operating cost for

the power plant are estimated to be RM 180,000.00 per year. So, she is

considering two alternative fuels:

Alternat ive I - WO OD

Installation Cost

Fuel C onsumption

Fuel Cost

Incremental Cost Rate

No Salvage value

RM1500/ kW

30,000 metric tonnes per year

RM50 per ton

RM5 per ton per year after year one


10/11

CONFIDENTIAL

KB/BKC/BKG/12131/BKF4143

Alternative II - OIL

Installation Cost

Fuel Consumption

Fuel Cost

Incremental Cost Rate

No Salvage value

RM1200/kW

56,000 barrels per year

RM5 5 per barrel

RM 3 per barre l per year af ter year one

If interest rate is 12 , and the analysis period is 10 years, perform equivalent

uniform annual worth (EU AW ) analysis on each a l ternative as the fol lowing:

i)

o Nothing (Use TNB supply)

5 M arks)

ii)

s ing Wood or

5

Marks)

iii)

sing Oil?

5Marks)

W hich al ternative should be the best choice for J r . Hazwani?

3 M arks)

QUE STION 4

a The Fermenter for Bioprocess Equipment costs RM 355,000.00 and has an

estimated salvage value of RM 35,000.00 at the end of

years u seful l i fe .

Compute the depreciation schedule for the equipment by;

i)

Straight Line Method (SL)

(2 Marks)

ii ) Double Declin ing Balance Method (DD B)

4 M arks)

iii)

um of Y ears Digit Method (SOYD)

4 M arks)


11/11

ONFIDENTI L

KB/BKC/BKG/121311BKF4143

b) The Company believes the above equipment can give annual receipts of RM

200,000.00 and annual disbursement of RM 120,000.00. Using the same figures as

part (a) with Straight Line Depreciation Method and Corporate Tax Rate of 25 ;

i)

What is the prospective internal rate of return (IRR) before income tax?

5 Marks)

ii)

What is the prospective internal rate of return (IRR) after the taxes?

5 Marks)

QUESTION 5

The cost of capital is the company s cost of using funds provided by creditors and

shareholders. A company s cost of capital is the cost of its long -term sources of funds:

debt, preferred equity, and com mon equ ity

a) What is the difference between IRR and WACC?

5 Marks)

b) Briefly outline the Cost of Capital Processing Steps?

5 Marks)

c) The Plant Design Company will raise capital in the following proportions:

Debt: 40 percent; Preferred stock: 1 Opercent; Comm on stock: 50 percent.

Calculate the weighted average cost of capital, WACC if its cost of debt is

3.6percent, its cost of preferred stock is 8 percent, and its cost of common

stock is 12 percent?

6 Marks)

END OF QUESTION P PER

11

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BKF4143-PROCESS ENGINEERING ECONOMICS 11213.PDF