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DESIGN PROJECT MEMO [3]

Date: 25th September 2017


To: Dr.John Lau
From: Adam James Ho Wei Jie, Dalilah Binti Ismail, Lai Wei Chean,
Lavania Sugu, Cho Wai Howe
Re: Direct Route to Phenol from Benzene

Summary
Economic assumptions, capital & operating cost summary and economic analysis were done and resulting
with a total capital investment of $61,487,591 and total production cost of $247,458,497. The payback
period will be done within 4.5 years of production. Process and Instrumentation Diagram (P&ID) is drawn
according to the plant wide process control. Key issues of plant commissioning, start-up and shutdown are
listed in the appendix for future precaution use. All calculations are kept in USD.
1.0 Economic assumptions and methods used, for example depreciation
For the purposes of conducting the economic evaluation, several assumptions have been made. First,
the cost index used is the chemical engineering plant cost index (CEPCI) for the year 2014. Second, the
salvage of the plant is 10% of the equipment cost. Third, the plant construction period is 2 years and the
overall plant lifespan is 20 years. Forth, the USD to RM conversion rate is $ 1.00 for every RM 4.20. Fifth,
the plant is assumed to undergo linear depreciation. Finally, the minimum acceptable rate of return (MARR)
for the plant is 8%.

2.0 Capital and operating cost summary


In the Appendix, Table 1&2 shows the total capital investment (TCI) of $40,284,974 and a total production
cost of $184,760,853. In Table 3, Lang factor is implemented for approximation of the capital cost
investment. Finally, total revenue is presented in Table 4. Figure 1 shows the breakeven point to be at
approximately 4.5 years and over 4.5 years all revenues are taking count as profit to the company.
3.0 Economic analysis scenario & Sensitivity analysis with interpretation
The economic base case, best case and worst-case scenarios are examined in Table 5. The parameters
studied are feed cost and product price, using an evaluation period of 20 years. From the table, it can be
seen that if the material prices and product price changes, it can have significant impact on the life of the
plant. In the worst-case scenario, the plant is not viable. In Figure 1, the breakeven point is calculated to
be 4.5 years

4.0 Plant-wide control philosophy


The aims of the control design system are to produce 226 kt/yr of phenol with a 98% purity and ensuring
a controlled feed of methane for flaring within flammability limits. Controls are also needed to ensure
process quality and deviations as well as emergency response procedures based on the high and low alarms
installed. The parameters chosen for ensuring stability includes level, pressure and temperature.
Minimisation of deviation is done from an ideal state to reduce the production of by-products, thus reducing
waste and conserve the integrity of the catalyst vanadyl pyrophosphate. The top-down analysis was
performed, then bottom-up design was done to produce the P&ID in Figure 2 in the Appendix. The controls
are based on the variables identified and divided into controlled, manipulated and measured variables.
Inferential control was used during pumping into reactors and bottoms od distillation columns as
composition of stream is the constraint.

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5.0 Key issues in plant commissioning, start-up & shutdown
Commissioning is vital in a plant operation to ensure all processes are carried out in a safe and efficient
manner. During this stage, a set of commissioning procedures are conducted to test the operation before the
operation proceeds to the start-up stage. Besides that, the operating conditions are tested and optimized.
The description of commissioning key issues is listed in Table 7. Commissioning covers the pre-
commissioning stage where mechanical equipment, electrical systems and chemical processes are inspected
after the construction stage. This inspection is conducted to make sure that the current plant safety standards
meet the required commissioning protocols. Pre-commissioning key issues are found in Table 6. Start-up
stage commences after the commissioning stage. The plant runs with the actual process fluids and optimized
operating parameters. Products are being generated at this stage. Start-up operation key issues are given in
Table 7. Shutdown stage occurs when the plant operation is brought to a stop. There are two types of
shutdown which are planned and emergency shutdowns. Table 8 addresses both the planned and emergency
shutdowns key issues.

6.0 List of equipment to be designed by each person in their individual major and minor design
studies
Table 10 listing task distribution for each individual with their own major and minor equipment design
in the appendix.

Reference:

Adams, Mike. 2016. Gold Ore Processing: Project Development and Operations. Netherlands:
Elsevier B.V.

Cheali, Peam, Krist V. Gernaey, and Grkan Sin. 2015. "Uncertainties in early-stage capital cost
estimation of process design a case study." Techno-economic risk analysis for process
design 1-13.

Killcross, Martin. 2012. Chemical and Process Plant Commissioning Handbook: A Practical
Guide to Plant System and Equipment Installation and Commissioning. Amsterdam:
Elsevier Ltd.

Kutlu, Alp, Drew Martin, Douglas Ross, and Chad Greco. 2012. Direct Route to Phenol from
Benzene. University of Pennsylvania. Accessed September 19,
http://repository.upenn.edu/cgi/viewcontent.cgi?article=1034&context=cbe_sdr

Lees, Frank. 1996. Loss Prevention in the Process Industries: Hazard Identification,
Assessment and Control. Oxford: Reed Educational and Professional Publishing Ltd.

Wise Global Training Ltd. 2014. Introduction to Oil and Gas Operational Safety: For the
NEBOSH International Technical Certificate in Oil and Gas Operational
Safety. United States of America: Routledge.

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Description Percent of Delivered Equipment USD
Direct Plant Cost
Purchased Equipment Delivered (D) 9,716,500
Service Facilities (installed) 50% D 4,858,250
Purchased Equipment Installation 40% D 3,886,600
Piping (installed) 30% D 2,914,950
Instrumentation and Controls (installed) 25% D 2,429,125
Buildings (including services) (B) 20% D 1,843,300
Electrical System (installed) 10% D 971,650
Yard Improvements 10% D 971,650
Land 5% D 485,825
Total Direct Plant Cost (TP): 28,177,850
Indirect Plant Cost
Construction Expenses 30% P 8,453,355
Engineering and Supervision 30% P 8,453,355
Legal Expenses 5% P 1,408,893
Total Indirect Plant Cost (TI): 18,315,603
Fixed Capital Investment
Total Direct and Indirect Plant Cost P+I 46,493,453
Contingency 10% (P+I) 4,649,345
Contractor's Fee 5% (P+I) 2,324,673
Fixed Capital Investment (FCI): 53,467,470
Working Capital (W) 15% FCI 8,020,121
Total Capital Investment (TCI) FCI+W 61,487,591
Table 1: Summary of Capital Investment

Overall Operating Cost for Base Case (per annual)


Manufacturing: Variable Cost (VC)
Description Cost Factor USD
Raw Materials in Feed - 177,071,250
Operating Labour (O) 1,135,519
Utilities 15% TPC 4,226,678
Operating Supervision (S) 10% O 113,552
Maintenance and Repairs (R) 6% FCI 3,208,048
Operating Supplies 15% R 481,207
Sub-Total 186,236,254
Manufacturing: Fixed Charges (FC)
10% FCI 5,346,747
Depreciation
3% B 58,299
Rent Cost 10% B 194,330
Labour Insurance 4% FCI 2,138,699
Local taxes 2% FCI 1,069,349
Sub-Total 8,807,424
Manufacturing: Plant Overhead Cost (POC) 12% (O+S+R) 534,854
Total Manufacturing Cost (TMC) VC+FC+POC 240,238,579
Manufacturing: General Expenses (GE)
Administrative expenses (AE) 15% (O+S+R) 668,568
Distribution & marketing expenses (DME) 15% TPC 4,226,678
Research & Development Expenses (RDE) 5% TPC 1,408,893
Financing Interest 5% TI 915,780
Sub-Total 7,219,918
Total Product Cost (TPC): TMC + GE 247,458,497
Table 2: Summary of Total Plant Cost
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Lang factor method for estimation of capital investment. This technique, proposed originally by Lang in 1947 and frequently used to calculate the order of magnitude cost estimates (Cheali, Gernaey and Sin 2015).
Description Lang Factor COST (USD)
1. Major equipment, total purchase cost
Equipment erection 0.45 D 4,372,425
Piping 0.45 D 4,372,425
Instrumentation 0.15 D 1,457,475
Electrical 0.10 D 971,650
Buildings, process 0.10 D 971,650
Utilities 0.45 D 4,372,425
Storages 0.20 D 1,943,300
Site development 0.05 D 485,825
Ancillary buildings 0.20 D 1,943,300
Total Physical Plant Cost (PPC): 20,890,475
Design and Engineering 0.25 PPC 5,222,619
Contractor's fee 0.05 PPC 1,044,524
Contingency 0.10 PPC 2,089,048
Total Fixed Capital Cost (FCI): 29,246,666
Working Capital 8,020,121
Total Capital Investment (TI): 37,266,786
Table 3: Summary of Total Production Cost

Products Production (kg/year) Unit Price ($/kg) Total Revenue ($)


Phenol 226,000,000 1 226,000,000
Total Revenue 226,000,000
Table 4: Summary of Total Annual Revenue

4
2500

2000

1500

USD/Mil $
Revenue
Fixed
1000
Total Cost

500

0
0 2 4 6 8 10 12
Years

Figure 1: Breakeven Phenol Production Rate

Criteria Base Case Best Case Worst case


Raw material price (USD) 131683180.3 127038114.6 135970933.3
Product price (USD) 214100645.5 239792722.9 185197058.3
Total annual revenue (USD) 12030218.19 42367361.37 -21161121.9
Gross Profit (USD) 1743743314 8114543381 -5226438110
Return on Investment (%) 4.034818446 19.20968971 -11.8465465
Payback Period (Years) 3.097764763 0.879610738 -
Table 5: Economic Scenario Analysis Summary

Outline Key issues

-Define the scope of the commissioning phase. -Appoint team manager, contractor, system engineer and instrumentation engineer under the commissioning team

-Form a commissioning team. (Lees 1996, 195).

-Create training programs. -Collect the necessary information for all the commissioning documentation such as MSDS data, plant operating
parameters and legislation.
-Plan a timeline and schedule for the commissioning stages.
-Train the commissioning team on all the commissioning operation stages.
-Finalize the required P&ID and other mechanical drawings.
-Ensure the equipment design complies with the standard design criteria.
-Inspect emergency system and devices.

-Conduct test on pumps, valves and other mechanical equipment.

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-Determine the budget necessary for the commissioning stages.

-Conduct HAZOP studies to access and reduce all existing hazards in the plant.

-Develop standard operating procedures (SOP) (Killcross 2012, 93).

Table 6: Pre-commissioning and its key issues

Outline Key issues

Commissioning stage:

-Carry out training for all working personnel on the commissioning team.

-Fill methane gas into reactors before introducing process fluids. Methane is filled to prevent benzene from reaching the -Follow the commissioning and start-up methodologies in order.
flammability limit (Kutlu et al.2012, 27). -Provide adequate heating and cooling condition.
-Introduce vanadyl pyrophosphate catalyst into reactors. -Develop procedures to overcome any technical issues encountered during the commissioning period such as hotspots,
-Initiate the cooling and heating system in the plant. equipment breakdown and piping blockage.

-Conduct dry run and wet run. There will be no chemical used during dry run. Alternative safer chemical such as water is -Optimize the operating parameters required for the coming start-up operation.
used for wet run commissioning (Adams 2016, 187).

-Inspect the flow control system in the plant.

Start-up stage:

-Introduce chemicals into process equipment.

-Run the plant on actual operating conditions. -Ensure the plant operating conditions conform to the startup operation protocols.

-Operate the plant based on the start-up procedures in an orderly manner. -Report any abnormal start-up operations so that maintenance can be carried out.

-Continuously monitor process and control systems.

Table 7: Commissioning and start-up outline and key issues

Outline Key issues

-Conduct debottlenecking process to further optimize the plant operation. -Record all installation and maintenance being carried out throughout the commissioning and start-up stages.
-Ensure all commissioning procedures have been carried out. -The final handover documentation should include HAZOP study, updated P&ID, control system documentation, training
-Final modification to the process and control systems before handover to the operation team. procedures and maintenance manual.

-Finalize handover documentations. -Check plant performance to be operating efficiently and achieves the required product target.

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Table 8: Post-commissioning stage and key issues involved

Outline Key issues

-Carry out normal shutdown according to the procedures provided to reduce the likelihood of accidents.

-Inspect all the process equipment to be in good condition before and after shutdown operation. -Allow process fluids to completely empty a reactor before closing the effluent stream.

-Handle hazardous wastes in a proper manner. -Provide adequate cooling to the system to avoid reactors from overheated.

-Turn off and reduce the flowrate of inlet feed stream. -Check for any corrosion or debris that may be present in process equipment.

-Shut off the fuel inlet flowrate into process equipment such as the furnace. -Store wastes in the correct containers according to their hazardous and toxic nature.

-Switch off instrumentation and automation control systems.

Table 9: Normal shutdown stage and its key issues

Outline Key issues

-Identify the cause and hazard of the emergency situation. -Access the emergency situation whether it involves the loss of containment or utility, chemical contamination or fire
-Check relief valves and safety interlock devices to be functioning. incidents.

-Reduce high pressure in reactors to atmospheric pressure. -Activate alarms to alert other working personnel of the emergency shutdown (Wise Global Training Ltd, 2014, 102).

-Allow exiting process fluids from reactors to stay in storage tank ST-102 before emergency shutdown. -Release pressure from reactors to avoid pressure from building up.

-Staffs are required to provide fast response to emergency situation while adhering to the emergency shutdown protocols. -Staffs must wear appropriate personal protection equipment (PPE) and evacuate to designated safe areas.

-Good communication is essential in the management team to ensure the emergency shutdown stage proceeds smoothly.

Table 10: Emergency shutdown stage description and key issues

Person in Cho Wai Howe Adam Ho Lavania Sugu Lau Wei Chean Dalilah Binti Ismail
Charge

Major Unit Distillation column D-402 CSTR R-103 Distillation column D-301 CSTR R-101 CSTR R-102

Minor Unit Compressor C-501 Pump P-108 Pump P-101 Pump P-104 Storage tank ST-102

Table 11: Individual Equipment Design Studies

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S-109
Methane
Feed S-10
S-7 PC
PC PC
V-108
V104 V106
V-104
PT
S-109 PT PT
PAH PAH R101A
R101A PAH R102A
R101A R103A
R102A
LAH
S-137 ST-101 LAH LAH
R101A
R102A R103A
S-27
LT LT LT
R101A R102A R103A
S-138 PAL PAL
PAL
R101A R103A
P-111A/B R102A
P-112A/B LAL R- LAL
R- LAL
R- S-311
R101A
101A R102A
102A R103A
103A
FC FT
FT S-108
V101 S103 S-112 S-114
S106 AT S-120
S-116
S107
LC S-401
PC PT V105 LC TT
PC PT PC PT LC
P102 S105 AC PT V107 S205
P101 S102 P103 S111 V103
FC S107 S115 PT S-122
V102 S119
Benzene Catalyst Hydrogen PC
Feed Feed Peroxide PC
P104
S-101 S-104 Feed S-110 P105
P-104A/B P-105A/B TC
P-101A/B P-102A/B P-103A/B V203
Cooling
Water
S-215 Return

HX-202
S-126
S-206
C-201
S-139 Waste
S-130 S-134 TT
PC TT S-223 S402
PC PC
V110 S201
V112 V114
TC
PT V202 S-209
PAH R101B PAH PT PAH PT
R102B R103B S-212
R101B R102B R103B
S-309 S-204
LAH LAH LAH LT
HX-201 F201
R101B R102B R103B HX-203
LT LT LT F-201
S-202 S-203
V110 V112 V114
V-202 LC
PAL PAL PAL
R101B R102B P-33 R103B
V204
S-208
S-214 S-211 S-210
LAL R-101B LAL R-102B LAL R-103B S-132
TC TT
R101B R102B R103B
V-204 V205 S220
S-131 S-303
S-125 S-127 V-203
S-129
LC
LC LC V113
PT
V109 V111 S-136 S-213
PT PT S132
S124 S128 S-219
Hydrogen S-123 S-218 HX-204
Peroxide PC S-222
S-207
Feed PC PC P108 S-217 Cooling
P107 ST-102 S-221 Water
P106 P-107A/B P-108A/B
P-106A/B Return

S-141 S-216
P-202A/B P-201A/B P-203A/B
S-138
S-140
Figure 2: P&ID of design (Section 1) S-142

P-109A/B P-110A/B
TC
V201
Description Drawn by: Lavania Sugu Title: Piping and Instrumentation Diagram (P&ID)

1. Piping & Instrumentation Diagram of plant for direct route Checked by: Consultant: - CAD File Name: -
of phenol production from benzene
Size: A3

Scale: 1:1 Location: -

Date: 25/9/2017 Client: Curtin University Malaysia Sdn. Bhd. DWG N0: 1000

SHT No:1/1

REV No:0

8
S-73 S-306
S-310 PC PT
S-311 C401 S416
Colling PC TT TC Cooling
Water Water PC S-401 S-417
V305 S304 V302 S-402
V-304 S-308 I-114
S-307 V-404
V-405 S-416
FC FT
V-302 C-401 V411 S408

HX-302
Cooling S-303 S-305 S-409 V-411
PT HX-403
Water PT S-414
A301 FC
Return I-115
V303
TC
S405
DC-301 HX-401
LT LT
A-301 A-401
FT A401 TT
S-209 A301
S309 S405 S-410 Waste
S-106
LC S-406 Phenol S-212 TT TC
LC S-408
S-309 P401 HX-402 V-35 I-127 I-127
A301 TT TC
FC LC Purge S-407
TT TC D401 D401
D301 D301 P301 V402
LT
FT AT LT LT Cooling
F401
S-415 D402 D-402
D-301 S304 S304 D401 D-401 Water
LT Return
P-401A/B
D301 S-102
AC F-401
P-301A/B X LC FC FT
S304 LC
FC FT FC FT D402 V410 Steam
D401
LC V308 Steam V403 Steam
S-425 Steam
D301 V-408 K-402
K-301 S-302 K-401 Steam
Steam
V-308 V-403 FC
V408
S-403
S-301 S-419
FT FC FT FC FC FT
S301 V301 S403 V401 V406 S412
Waste
FT Waste
Cooling
S-421 S-418 Water Steam
Acetonitrile S-411
S-420 P-403A/B P-404A/B
V-406

PC PT
P402 S422
S-137 S-423
S-422

V-407

P-402A/B

S-422

S-505

PT PC FC
S501 C501 V501

S-501 S-503
S-502
Nitrogen C-501
FR-501
FT V-501
S424
S-424

Figure 3: P&ID of design (Section 2)

S-504
Description Drawn by: Lavania Sugu Title: Piping and Instrumentation Diagram (P&ID)

1. Piping & Instrumentation Diagram of plant for direct route Checked by: Consultant: - CAD File Name: -
of phenol production from benzene
Size: A3

Scale: 1:1 Location: -

Date: 25/9/2017 Client: Curtin University Malaysia Sdn. Bhd. DWG N0: 1000

SHT No:1/1

REV No:0