Benefits of AspenTech Economics Contrasted with Traditional
Estimating Methods
Webinar Q&A
This document summarizes the responses to questions posed before and during the webinar. Additional
questions should be directed to AspenTech Support.
Submitted Before the Webinar:
Q: What other AspenTech Products can we integrate with IPM to create better estimates?
A: All Economics products share the same data source so that you can start a project in IPM (Aspen InPlant Cost Estimator) and move up to Aspen Capital Cost Estimator (ACCE) as the need arises. ACCE
then integrates with Aspen Basic Engineering (ABE) for datasheets.
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Q: How can we improve our ACCE software to assure maximum reliability of our cost estimates in
Colombia?
A: You would need to create a template for all of the design conditions, run an estimate, and then
calibrate the system for local cost conditions. A Market Basket survey is recommended as the starting
point for this process.
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Q: For optimizing the cost, can we use steady-state models from Aspen HYSYS or does Aspen
Capital Cost Estimator require models from Aspen HYSYS Dynamics?
A: The steady-state models are used for moving from Simulation to ACCE.
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Submitted During the Webinar:
Q: What are the capabilities of APEA with respect to calculating economic parameters like NPV,
ROI, or IRR for a particular retrofit or new design? Can you also use this to price a product?
A: Product Pricing is generally the domain of business development within a company. Our product can
help you determine whether a particular product price will result in a successful process. You will need
both raw material and product pricing in order for us to calculate NPV and IRR.
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Q: When you are using the system to evaluate a new concept where technology may include
components that are beyond the current state-of-the-art, and therefore outside historical data
ranges, what are your recommendations/cautions for the standard workflow?
A: This is where you can use the power of modeling to either select a component that is similar and index
the cost for the uncertainty or build your own model with costs. While ACCE may not be able to estimate
the cost of the piece of equipment, we can usually cover all of the other installation items.
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Q: How does one estimate the cost of a brick lined vessel used for high temperatures—for
example, 1000 degrees Celsius?
A: Generally, the temperature that the vessel will see is limited to 400 to 450 Celsius, therefore you would
put that in as the temperature and choose the brick lining from our list of available vessel materials.
Q: Does the software tell you the accuracy of the estimate (i.e., whether it is +/- 20%)?
A: The accuracy of an estimate is highly dependent on the accuracy of the scope. There is no way for us
to tell the accuracy of the user input, therefore we cannot tell you the accuracy of the estimate.
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Q: What is the degree (+ or -) of estimate accuracy?
A: Our experienced users report that they can generally obtain +/-10 percent accuracy of the estimate,
with approximately 25% engineering complete. See the preceding question for more information.
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Q: Does accuracy increase with the project size?
A: The accuracy may increase with project size up to a certain point. This is due to errors on the high
side offsetting errors on the low side of an estimate.
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Q: Is there a location factor for India built into Aspen Capital Cost Estimator?
A: There is a location factor built into Decision Analyzer for India. However, if you are going to conduct a
complete estimate in India, you would be better served by specifying all of the design parameters for your
location. You would then need to conduct a Market Basket survey for the items on the job and then
calibrate the system based on that location.
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Q: Is a cost basis for India built into Aspen Capital Cost Estimator?
A: There is no native cost basis for India. See previous question.
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Q: How do Aspen Economic Evaluation products calculate the cost of pieces of equipment?
A: The System contains a modeling methodology for each piece of equipment. For fabricated equipment
(e.g. vessels, towers, heat exchangers, etc.) a Fabrication shop methodology is used. This starts with
plate and tube materials and then constructs the item using cutting, rolling and welding plates, installing
nozzles and heads, and similar activities. For rotating equipment, we model the item based on the user
input and for some items we model just like our Equipment Model Library item works.
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Q: For piping quantities, does the software account for small bore pipes within the equipment
envelope?
A: Drain lines on equipment and piping will generate small bore pipes. Instrument connections may also
generate small bore pipes.
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Q: Have any of these projects been benchmarked against the project actuals and where were
some of the deficiencies noticed, such as accounts?
A: Yes, some of the projects mentioned have been benchmarked against project actuals. The reports did
not list any deficiencies found.
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Q: Are utilities like electricity and steam within the HYSYS environment taken into account in the
economic analysis performed using APEA?
A: Any utilities entered within the HYSYS environment are taken into account in APEA in the Operating
Cost calculations.
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Q: What about OSBL costs?
A: OSBL costs for power distribution and process control are calculated automatically by the system.
Additional OSBL costs must be added to the project as necessary to complete the estimate.
Q: Where does AspenTech get the equipment data? Is there an annual survey showing equipment
volume and its relevant price?
A: Our equipment pricing is obtained from a combination of public and private sources. Because
equipment data is variable by location and project, it is recommended that users calibrate costs to their
experience.
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Q: Does Aspen Process Economic Evaluator have accurate cost estimates for Asian locations?
A: APEA does not have Asian costing except for the Japanese costing basis. It is possible through
calibration to generate an accurate cost estimate for any location.
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Q: I'm interested in incorporating the Monte Carlo simulation to capital cost estimation. To set up
a Monte Carlo problem, I need to know the probability distribution of the uncertain parameter.
Where can I obtain this probability distribution?
A: We do not have any information as to probability distributions for Monte Carlo simulations. Most
customers use the data from ACCE and then apply their own probability distributions based on their
knowledge of the input to ACCE.
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Q: We cannot model our water treatment plant in HYSYS. How could we use Aspen Process
Economic Analyzer without having a process model?
A: APEA/ACCE has some of the equipment used in water treatment plants. You can enter the data
directly into APEA/ACCE if you have a sized equipment list.
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Q: What is indexing?
A: Indexing is a method of adjusting costs and man-hours by use of a multiplier, either directly or via the
use of the Code of Accounts. This is a feature of ACCE that is maintained at multiple levels for indexing
costs.
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Q: Where can I find an Aspen Plus demo for the plant cost estimation?
A: Any of the Aspen Plus demo files can be used to run Activated Economics within the simulator. This
will produce a cost for the unit operations in the demo file.
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Q: How do we go about getting conceptual level (Class 5) estimates for such facilities (offshore
system) which may include non-process systems including drilling and FPSO systems?
A: Use ACCE for the process systems and then include your own models for the drilling. With the
exception of the barge, you can produce a FPSO as a bargeable module within ACCE.
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Q: How do you handle cost estimation for tie-ins to rest on plant for OEM modules? What
minimum level of technical “definition” information is needed from the user or module supplier?
Is there a simple “default” tie-in estimate model for use of pre- module design?
A: If you enter the module in ACCE, then the tie-ins are handled automatically by ACCE. If you are
entering the module as a fixed cost component, then there are mechanisms for entering the tie-ins
manually.
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Q: What is AIPCE?
A: AIPCE stands for Aspen In-Plant Cost Estimator. It is one of the products in the Economic Evaluation
suite of products. It is designed for small estimates, such as revamps and turnaround estimates.
Q: When you use a capacity factor to change the capacity of a plant, what is the logic used to
calculate engineering?
A: When you change the capacity of the plant via decision analyzer scaling module, all of the
components of the facility are resized. Since engineering is built from the bottom up, a completely new
engineering estimate will be calculated based on the new capacity.
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Q: How can I apply design allowance to individual accounts—for example steel?
A: In ACCE there is a mechanism called External Indirects and Proratables that is very flexible in allowing
you to apply separate design allowances to each of the major bulk accounts.
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Q: Why aren’t there any separate columns for sub-contract costs—for example, earth work, large
tanks, pipe shop fabrication, etc? For productivity adjustments, if we have to adjust 10% and we
index from 100 to 90, how can we change the productivity to 300%?
A: There is not a separate column for sub-contract in ACCE because we allocate by contractor and you
need to create a contractor to manage the sub-contract. Productivity can be set at the project level and
then adjusted by Area. If you want to adjust productivity down by 10%, then you would change the index
from 100 to 90.
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Q: Are you able to compare final project cost on various scenarios, such as location, level of
instrumentation, capacity, etc.?
A: Users can easily change various options and create separate scenarios based on location or many
other design parameters, such as design codes.
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Q: Are the cost estimates developed as class III level per AACE?
A: An AACE Class III estimate specifies the level of information that needs to be available and the
expected result when the estimate is created. ACCE can be used to create AACE Class III estimates.
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Q: How are the bulk i.e. piping, instruments, electrical, structural, and civil elements accounted
for?
A: Each piece of equipment has a volumetric model associated with it that creates all of the bulks
necessary to install the piece of equipment. Additionally, other elements can be added from a list of
common components to supplement the bulks generated by the equipment.
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Q: Can I assume that the Gulf Coast base is the basis for all of North American estimating?
A: Yes, the US costing basis is based on US Gulf Coast. It can be modified by using local wage rates
and costs to customize to any location.
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Q: Is there an optimal accuracy range for these tools? i.e., very small or very large projects?
A: ACCE can be used for large projects and AIPCE can be used for small projects. There is no optimal
accuracy range as this is a function of complete scope and accurate input.
Q: Is it possible to attend the mentioned training without being a licensed user?
A: Yes, AspenTech classroom based trainings are available to non-licensed users. Online training
material availability varies by material type. Training material posted on the AspenTech support site is
limited to licensed users; however, trainings are available on our public website, www.aspentech.com.
Q: Does the APEA give the capital cost estimation as well? If so, will it be the same as using the
ACCE?
A: Yes, the costs obtained using APEA and ACCE will be the same. However, the level of control for
producing a complete estimate is lacking in APEA (e.g. contractors and workforces) and it is
recommended that APEA only be used for relative costing evaluations between process modifications.
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Q: The costing update involves all versions of economic analyzers (you mentioned that all use
ICARUS) and older versions, as well? Can there be different equations in estimating the costs
between older versions and the more recent?
A: When a costing update is released by AspenTech, typically in the fourth quarter of the year, it applies
to all of the Aspen Economic Evaluation products, including Aspen Capital Cost Estimator, Aspen In-Plant
Cost Estimator, and Aspen Process Economic Analyzer. However, to obtain the costing update, you must
adopt the latest release of the software. The costing update is not applied to older versions of the
software.
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Q: Is the Process Economic Analyzer, Capital Cost Estimator, and In-Plant Cost Estimator
separate software packages?
A: Aspen Process Economic Analyzer, Aspen Capital Cost Estimator, and Aspen In-Plant Cost Estimator
are all separate software products. They are installed as a package due to the shared components.
AspenTech has two very flexible licensing options. With the new commercial model, products aren’t
licensed. We issue tokens which are reusable and can be used to open any software product in the
Engineering Suite, including all of the Economics software. Each software product requires a different
number of tokens. This allows companies to be flexible. The second licensing option for small to medium®
sized enterprises (SMEs) is the aspenONE Engineering Desktop which provides access to all of the
Engineering software products, including the Economics products.
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Q: Does Economic Evaluation products include soil report aspects and effects on foundation
design?
A: Yes, Aspen Economic Evaluation products will factor in soil conditions when estimating foundations.
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Q: How is Aspen Capital Cost Estimator applied to oil and gas platform and floating production
facility designs?
A: Aspen Economic Evaluation products can be used for top sides of the processing facilities and we
typically can estimate anything above the water line. We can estimate floating production storage facilities
and other modules; however, we cannot estimate barges or drilling of exploration pieces of these facilities
or any of the components below the water line.
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Q: Are all latest solids equipment included for cost estimating using Aspen Plus?
A: Many of the solids models that have been added to Aspen Plus in recent releases are included in
Aspen Economic Evaluation software tools. We do not have 100% coverage due to the availability of
specifications and pricing for some of the models. We are adding models as data becomes available.
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Q: Labor productivity varies from one country to another. When I change the cost basis from
USGC to Middle East, for example, do the man hours get recalculated?
A: Yes, when you change between one of the five different locations in Aspen Economic Evaluation tools,
the productivity in the system and of the individual crafts will change from one location to another. Many
people will use the USGC productivity for projects worldwide and then adjust either the overall
productivity or individual crafts from there.
Q: Can Economic Evaluation be used for water treatment plants?
A: Aspen Economic Evaluation products have several different models built in. For water treatment
facilities, we have clarifiers and many of the pumps, but we do not provide 100% coverage of the
equipment. Users can add custom models to the systems and the associated volumetrics. Once created,
these custom models can be reused in the future.
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Q: We are interested in offshore crude and natural gas production. Can you model everything
within Aspen process simulators to start cost estimating?
A: For offshore, Aspen Economic Evaluation products can be used for top sides of the processing
facilities and we typically can estimate anything above the water line. We can estimate Floating
Production Storage Offloading (FPSO) Facilities and other modules; however, we cannot do barges,
drilling, or exploration pieces of these facilities.
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Q: Is the equipment rental for location of cranes? What else is included?
A: We include an allocation for “allocated equipment rental” and it includes everything from trucks to
backhoes. We also include unallocated equipment, based on the size of the project, which includes the
number of onsite office trailers and ambulances you may need.
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Q: Regarding the case study that mentioned Pemex estimates within +-15 &10% accuracy—is this
a comparison of as-built cost vs. the ACCE estimate?
A: For both the PEMEX and Conoco Phillips Case Studies where estimate accuracy was cited, the
accuracy is a result of benchmarking the as-built cost with the ACCE estimate from the authorization for
expenditure stage of the project. It is important to note that these estimates were adjusted for any scope
changes made after the authorization stage of the project.
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Q: When does your annual update get released?
A: AspenTech cannot speak to future releases, as we are a publicly traded company; however,
historically they have always been released in the fourth quarter of the year. The most recent cost update
was in December of 2012.