Technology Economics: Sodium Hypochlorite Chemical Production

Sodium
Hypochlorite
Chemical
Production

#TEC007B

Technology Economics
Sodium Hypochlorite Chemical Production
2013

Abstract
Sodium hypochlorite is the active constituent in chlorine bleach (also known as liquid bleach, “Javelle water” or simply bleach), a
strong oxidizer and bleaching agent. Known since 1789, bleach has been widely used since the 1930s and is an excellent
disinfecting agent that is employed in water treatment, cleaning and laundry operations, clinics and hospitals, and residences for
disinfecting kitchen and bathroom surfaces.
Although household bleach demand has been historically larger in terms of volume, since it is more diluted, industrial bleach
demand is superior (on a dry basis). As household market grows basically at the same pace as the population, increased water
consumption and shortage of fresh water resources makes water treatment the largest bleach application and the fastest-growing
segment. Additionally, transport and handling safety concerns have direct public opinion towards the use of sodium hypochlorite
rather than chlorine gas in water treatment, which represents a significant market expansion potential.
Sodium hypochlorite chemical production is a well-established process in the industry, whose operation principle is already
employed for preventing chlorine emissions in chlor-alkali plants. In this report, we review industrial bleach production through
the chlorination of caustic soda by chlorine gas in packed columns. Included in the analysis is an overview of the technology and
economics of a widely used process, similar to the employed by Solvay Chemicals, for example. Both the capital investment and
the operating costs for plants erected on the US Gulf Coast and in Brazil are presented.
The economic analysis presented in this report is based on a plant integrated upstream with a chlor-alkali plant and capable of
producing 250 kta of bleach. The estimated CAPEX for such a plant on the U.S. Gulf Coast is USD 33 million. Such location
presented not only a lower CAPEX when compared to Brazil, but also exhibited lower operational expenses, revealing itself as the
most competitive area.

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1

Contents
About this Study .............................................................................................................................................................. 8
Object of Study.............................................................................................................................................................................................................................8
Analyses Performed...................................................................................................................................................................................................................8
Construction Scenarios ..............................................................................................................................................................................................................8
Location Basis ...................................................................................................................................................................................................................................9

Design Conditions......................................................................................................................................................................................................................9

Study Background ........................................................................................................................................................ 10
About Sodium Hypochlorite............................................................................................................................................................................................10
Introduction.................................................................................................................................................................................................................................... 10
Applications.................................................................................................................................................................................................................................... 10
Water Treatment.......................................................................................................................................................................................................................... 11

Manufacturing Alternatives ..............................................................................................................................................................................................11
Chemical Production ................................................................................................................................................................................................................ 11
Electrochemical Production.................................................................................................................................................................................................11

Licensor(s) & Historical Aspects......................................................................................................................................................................................12

Technical Analysis......................................................................................................................................................... 13
Chemistry.......................................................................................................................................................................................................................................13
Raw Material ................................................................................................................................................................................................................................13
Technology Overview...........................................................................................................................................................................................................14
Detailed Process Description & Conceptual Flow Diagram.......................................................................................................................15
Area 100: Reaction & Product Discharge ....................................................................................................................................................................15
Area 200: Bleach Filtration....................................................................................................................................................................................................16
Key Consumptions ..................................................................................................................................................................................................................... 16
Technical Assumptions ........................................................................................................................................................................................................... 16
Labor Requirements.................................................................................................................................................................................................................. 16

ISBL Major Equipment List.................................................................................................................................................................................................18
OSBL Major Equipment List ..............................................................................................................................................................................................19
Other Process Remarks ........................................................................................................................................................................................................20
Alternative Designs.................................................................................................................................................................................................................... 20
Product Storage and Handling...........................................................................................................................................................................................20

Economic Analysis ........................................................................................................................................................ 22
2

Project Implementation Schedule...............................................................................................................................................................................23
Capital Expenditures..............................................................................................................................................................................................................23
Fixed Investment......................................................................................................................................................................................................................... 23
Working Capital............................................................................................................................................................................................................................ 26
Other Capital Expenses ...........................................................................................................................................................................................................26
Total Capital Expenses ............................................................................................................................................................................................................. 27

Operational Expenditures ..................................................................................................................................................................................................27
Manufacturing Costs................................................................................................................................................................................................................. 27
Historical Analysis........................................................................................................................................................................................................................ 27

Economic Datasheet .............................................................................................................................................................................................................28

Regional Comparison & Economic Discussion.................................................................................................... 30
Regional Comparison............................................................................................................................................................................................................30
Capital Expenses.......................................................................................................................................................................................................................... 30
Operational Expenditures......................................................................................................................................................................................................30
Economic Datasheet................................................................................................................................................................................................................. 30

Economic Discussion ............................................................................................................................................................................................................31

References....................................................................................................................................................................... 33
Acronyms, Legends & Observations....................................................................................................................... 34
Technology Economics Methodology................................................................................................................... 35
Introduction.................................................................................................................................................................................................................................35
Workflow........................................................................................................................................................................................................................................35
Capital & Operating Cost Estimates ............................................................................................................................................................................37
ISBL Investment............................................................................................................................................................................................................................ 37
OSBL Investment ......................................................................................................................................................................................................................... 37
Working Capital............................................................................................................................................................................................................................ 38
Start-up Expenses ....................................................................................................................................................................................................................... 38
Manufacturing Costs................................................................................................................................................................................................................. 39

Contingencies ............................................................................................................................................................................................................................39
Accuracy of Economic Estimates..................................................................................................................................................................................40
Location Factor..........................................................................................................................................................................................................................40

Appendix A. Mass Balance & Streams Properties............................................................................................... 42
Appendix B. Utilities Consumption Breakdown ................................................................................................. 44
Appendix C. Process Carbon Footprint ................................................................................................................. 45
3

Appendix D. Equipment Detailed List & Sizing................................................................................................... 46
Appendix E. Detailed Capital Expenses................................................................................................................. 48
Direct Costs Breakdown ......................................................................................................................................................................................................48
Indirect Costs Breakdown ..................................................................................................................................................................................................49

Appendix F. Economic Assumptions...................................................................................................................... 50
Capital Expenditures..............................................................................................................................................................................................................50
Construction Location Factors ...........................................................................................................................................................................................50
Working Capital............................................................................................................................................................................................................................ 50

Operational Expenditures ..................................................................................................................................................................................................51
Fixed Costs ...................................................................................................................................................................................................................................... 51
Depreciation................................................................................................................................................................................................................................... 51

Appendix G. Released Publications ........................................................................................................................ 52
Appendix H. Technology Economics Form Submitted by Client ................................................................. 53

4

List of Tables
Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration) ......................................................................................9
Table 2 – Location & Pricing Basis ....................................................................................................................................................................................................9
Table 3 – General Design Assumptions .......................................................................................................................................................................................9
Table 4 – Raw Materials & Utilities Consumption (per ton of Product)...............................................................................................................16
Table 5 – Design & Simulation Assumptions.........................................................................................................................................................................16
Table 6 – Labor Requirements for a Typical Plant..............................................................................................................................................................16
Table 7 – Main Streams Operating Conditions and Composition..........................................................................................................................18
Table 8 – Inside Battery Limits Major Equipment List......................................................................................................................................................18
Table 9 – Outside Battery Limits Major Equipment List .................................................................................................................................................19
Table 10 – Base Case General Assumptions...........................................................................................................................................................................22
Table 11 – Bare Equipment Cost per Area (USD Thousands).....................................................................................................................................23
Table 12 – Total Fixed Investment Breakdown (USD Thousands) ..........................................................................................................................23
Table 13 – Working Capital (USD Million) ................................................................................................................................................................................26
Table 14 – Other Capital Expenses (USD Million) ...............................................................................................................................................................26
Table 15 – CAPEX (USD Million)......................................................................................................................................................................................................27
Table 16 – Manufacturing Fixed Cost (USD/ton) ................................................................................................................................................................27
Table 17 – Manufacturing Variable Cost (USD/ton)..........................................................................................................................................................27
Table 18 – OPEX (USD/ton)................................................................................................................................................................................................................27
Table 19 – Technology Economics Datasheet: Sodium Hypochlorite Chemical Production at US Gulf ....................................29
Table 20 – Technology Economics Datasheet: Sodium Hypochlorite Chemical Production in Brazil..........................................32
Table 21 – Project Contingency......................................................................................................................................................................................................39
Table 22 – Criteria Description.........................................................................................................................................................................................................39
Table 23 – Accuracy of Economic Estimates .........................................................................................................................................................................40
Table 24 – Detailed Material Balance and Stream Properties ....................................................................................................................................42
Table 25 – Utilities Consumption Breakdown ......................................................................................................................................................................44
Table 26 – Assumptions for CO2e Emissions Calculation.............................................................................................................................................45
Table 27 – CO2e Emissions (ton/ton prod.)............................................................................................................................................................................45
Table 28 – Heat Exchangers Specifications ............................................................................................................................................................................46
Table 29 – Pumps Specifications....................................................................................................................................................................................................46
Table 30 – Columns Specifications...............................................................................................................................................................................................46
Table 31 – Utilities Supply Specifications.................................................................................................................................................................................47
Table 32 – Vessels & Tanks Specifications ................................................................................................................................................................................47
5

Table 36 – Indirect Costs Breakdown for the Base Case (USD Thousands) ......................................................................................................49
Table 34 – Detailed Construction Location Factor............................................................................................................................................................50
Table 35 – Working Capital Assumptions for Base Case................................................................................................................................................50
Table 36 – Other Capital Expenses Assumptions for Base Case...............................................................................................................................50
Table 37 – Other Fixed Cost Assumptions ..............................................................................................................................................................................51
Table 38 – Depreciation Value & Assumptions ....................................................................................................................................................................51

6

List of Figures
Figure 1 – OSBL Construction Scenarios .....................................................................................................................................................................................8
Figure 2 – Household Bleach Applications.............................................................................................................................................................................10
Figure 3 – Industrial Bleach Applications .................................................................................................................................................................................10
Figure 4 – Sodium Hypochlorite Electrochemical Production .................................................................................................................................11
Figure 5 – Process Block Flow Diagram.....................................................................................................................................................................................14
Figure 6 – Inside Battery Limits Conceptual Process Flow Diagram.....................................................................................................................17
Figure 7 – Alternative Bleach Production ................................................................................................................................................................................21
Figure 8 – Temperature Dependency in Bleach Degradation ..................................................................................................................................21
Figure 9 – Project Implementation Schedule.......................................................................................................................................................................22
Figure 10 – Total Direct Cost of Different Integration Scenarios (USD Thousands) ...................................................................................25
Figure 11 – Total Fixed Investment of Different Integration Scenarios (USD Thousands) ....................................................................25
Figure 12 – OPEX and Product Sales History (USD/ton) ................................................................................................................................................28
Figure 13 – EBITDA Margin & IP Indicators History Comparison..............................................................................................................................28
Figure 14 – CAPEX per Location (USD Million).....................................................................................................................................................................30
Figure 15 – Operating Costs Breakdown per Location (USD/ton) .........................................................................................................................31
Figure 16 – Methodology Flowchart...........................................................................................................................................................................................36
Figure 17 – Location Factor Composition...............................................................................................................................................................................40
Figure 18 – ISBL Direct Costs Breakdown by Equipment Type for Base Case ................................................................................................48
Figure 19 – OSBL Direct Costs Breakdown by Equipment Type for Base Case..............................................................................................48

7

About this Study
This study follows the same pattern as all Technology
Economics studies developed by Intratec and is based on
the same rigorous methodology and well-defined structure
(chapters, type of tables and charts, flow sheets, etc.).
This chapter summarizes the set of information that served
as input to develop the current technology evaluation. All
required data were provided through the filling of the
Technology Economics Form available at Intratec’s website.
You may check the original form in the “Appendix H.
Technology Economics Form Submitted by Client”.

Figure 1 – OSBL Construction Scenarios

Non-Integrated

Partially Integrated

Products Storage

Products Storage

ISBL Unit

ISBL Unit

Raw Materials
Storage

Raw Materials
Provider

Object of Study
This assignment assesses the economic feasibility of an
industrial bleach production through the chlorination of
caustic soda by chlorine gas in packed columns
implementing technology similar to that used by Solvay
Chemicals.
The current assessment is based on economic data
gathered on Q1 2012 and a chemical plant’s nominal
capacity of 250 kta (thousand metric tons per year).

Analyses Performed
Construction Scenarios

Intratec | About this Study

The economic analysis is based on the construction of a
plant partially integrated to a chlor-alkali plant, in which
feedstocks are locally provided but sodium hypochlorite
must be stored to be sent outside the plant. Therefore,
storage is only required for the product. Utilities supply
facilities must also be built, since there is no utility supply
from the chlor-alkali plant.

8

Since the Outside Battery Limits (OSBL) requirements–
storage and utilities supply facilities – significantly impact
the capital cost estimates for a new venture, they may play a
decisive role in the decision as to whether or not to invest.
Thus, this study also performs an analysis of the OSBL
facilities impact on the capital costs. Two distinct OSBL
configurations are compared. Those scenarios are
summarized in Figure 1and Table 1.

Chlor-Alkali Plant
Grassroots unit

Unit is part of a chlor-alkali plant

Source: Intratec – www.intratec.us

Location Basis
Regional specific conditions influence both construction
and operating costs. This study compares the economic
performance of two identical plants operating in different
locations: the US Gulf Coast and Brazil.
The assumptions that distinguish the two regions analyzed
in this study are provided in Table 2.

Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration)

Storage Capacity

(Base Case for Evaluation)

Feedstock & Chemicals

20 days of operation

Not included

End-products & By-products



All required

All required

Utility Facilities Included
Support & Auxiliary Facilities
(Area 900)

Control room, labs, gate house,
maintenance shops, warehouses, offices,
change house, cafeteria, parking lot

Control room, labs, maintenance shops,
warehouses


Design Conditions
Table 2 – Location & Pricing Basis
The process analysis is based on rigorous simulation models
developed on Aspentech Aspen Plus and Hysys, which
support the design of the chemical process, equipment and
OSBL facilities.
The design assumptions employed are depicted in Table 3.

Table 3 – General Design Assumptions
Cooling water temperature

24 °C

Cooling water range

11 °C

Wet Bulb Air Temperature

24 °C


Intratec | About this Study


9

Study Background
About Sodium Hypochlorite

clinics and hospitals, and at residences for disinfecting
kitchen and bathroom surfaces.

Introduction

Figure 2 and Figure 3 depicts the breakdown of sodium
hypochlorite applications for the two available product
classes (household and industrial) in the United States.
Although household demand has been historically larger in
terms of volume, on a dry basis, industrial demand is
superior. The so-called industrial sodium hypochlorite is
also employed for other medium to large scale applications.

Sodium hypochlorite (NaClO), a salt of hypochlorous acid, is
the active constituent in chlorine bleach, a strong oxidizer
and bleaching agent. Sodium hypochlorite is invariably
produced and used in aqueous solutions and is also known
as liquid bleach, “Javelle water” or simply bleach.
It is industrial practice to establish definitions of sodium
hypochlorite strength in order to characterize the product.
The term “available chlorine” is often used and is a measure
of the oxidizing capacity of a chemical relative to that of
pure Cl2. Sodium hypochlorite contains about 95.3 wt. % of
available chlorine.
From this definition, a common term used is “trade percent
of available chlorine” which expresses the weight of
available chlorine in grams per 100 mL of NaClO solution.
Additionally, strength can be simply measured as the
weight percent of sodium hypochlorite in solution.
Bleach solutions are corrosive, light yellow in color, with
strong chlorine smell. Two types are available
commercially, according to the NaClO content:
Household: 5-6 wt. % purity

Figure 2 – Household Bleach Applications

2%
Laundry
Bleaching

18%

Sanitizers

Spa and
Residential Pool
Treatment

80%


Industrial: 10-15 wt. % purity
Sodium hypochlorite is mainly produced through chlorine
contact with diluted caustic soda (NaOH). The process is
similar to that used for preventing chlorine emissions in
chlor-alkali plants (chlorine scrubbing).

Intratec | Study Background

Applications

10

Sodium hypochlorite is the most remarkable of all
hypochlorite forms and has been widely used since the
1930s. Nowadays, it is the most used hypochlorite bleach,
accounting for about 92% of global use. The remaining 8%
refers to calcium hypochlorite.

Figure 3 – Industrial Bleach Applications

Industrial Water
Treatment
Large Swimming
Pool Treatment
Commercial
Laundry Bleach

4%

4% 4%

5%
5%
45%

Liquid Detergent
33%
Textile Bleaching
Chemical Uses

Sodium hypochlorite is an excellent disinfecting agent that
is used in water treatment, cleaning and laundry operations,


Hypochlorite solutions are comparatively safer than chlorine
and often chosen in bleaching, disinfection, biofouling
control, and odor control applications. Due to chlorine
toxicity, transportation or handling accidents tend to direct
public opinion against its use. Despite bleach higher cost,
these factors have increased bleach popularity. Conversely,
although regulatory compliance is simplified when using
bleach, due to its corrosive nature, safety hazards are not
eliminated.

also involves brine electrolysis. It is often called bulk
production.

Paper and textile bleaching with concentrated hypochlorite
has been substituted by chlorine dioxide (ClO2), since the
latter is less harmful to fibers and generates a brighter
product. This market share is likely to reduce in the near
future.

Electrochemical Production

Water Treatment
One of the advantages of sodium hypochlorite use in
drinking water treatment plants is the ability to both
disinfect and maintain a residual level of disinfectant
throughout the distribution system. In the U.S., nearly 31 %
of such units use purchased sodium hypochlorite, 63% use
chlorine gas, and the remaining use calcium hypochlorite or
generate sodium hypochlorite on-site.

Chemical production principle of operation is the same as
that employed to mitigate chlorine emissions, i.e., chlorine
reaction with diluted sodium hydroxide solutions. Packed
columns or reactors are used for this purpose. The process
is able to produce bleach solutions of concentration near 0
wt. % to about 16.5 wt. %.

The electrochemical production consists of the electrolysis
of dilute brine to produce chlorine and caustic.
Chlorination reaction (the same as in chemical production)
is then conducted to yield NaClO on-demand. A simplified
flow diagram of the process is shown in Figure 4.

Figure 4 – Sodium Hypochlorite Electrochemical
Production

Hydrogen

Usually, bleach is delivered to water and wastewater
treatment plants at concentrations in the range of 10 to 15
trade percent, to minimize transportation costs. However,
the most common is 12.5.
Depleted
Brine

Electrochemical Cell
Off-Gas

Manufacturing Alternatives
Bleach may be produced by batch or continuous process,
depending on its particular use or market demand. Two
main types of manufacturing processes can be
distinguished: chemical production and electrochemical
production.

Chemical Production
The chemical process relies on the acquisition of chlorine
and caustic soda feedstock from external sources, in
contrast with the electrochemical process for bleach, which

Water

Brine

Caustic Soda
Chlorine

Reactor
Low Strength Sodium
Hypochlorite



Sodium hypochlorite usage should increase along with
population growth, per capita water consumption and
shortage of fresh water resources, for example. A growing
application in desalination plants is algae proliferation
control and desalted water treatment.

11

This kind of production is often called on-site generation
system (OSG) or on-site electrochlorination (OSE), and
avoids storage of chlorine and caustic soda. The sodium
hypochlorite is generally produced in lower strengths (e.g.
0.7 – 0.9 wt. %) and stored in smaller tanks; however,
industrial bleach can also be generated.
Local chemical costs may be a more decisive factor when
selecting on-site generation, rather than aspects of safety or
convenience. Desalination plants in the Middle East already
operate large scale sodium hypochlorite facilities based on
seawater electrolysis.
There are multiple suppliers with multiple configurations of
OSG systems. Variations may include: chemical
composition of electrodes, configuration, energy
requirements, and water and salt quality.

Licensor(s) & Historical Aspects
Early sodium hypochlorite manufacturing plants relied on
batch processes. At the time, the amount of NaOH added
to the reactor was calculated rather than adjusted by
process controllers, which led to improper reaction pH.
Furthermore, the absence of temperature control was
another process constraint. Both of these aspects caused
increased sodium chlorate (NaClO3) content in the product,
an undesirable contaminant, especially in drinking water.
Continuous processes became more common in the 1970s,
when pH and temperature controls were adopted to
minimize chlorate formation. Batch processes are still used,
but also rely on better reaction conditions control.


Nowadays, the majority of bulk production in the U.S. is
done through Powell Fabrication & Manufacturing, Inc.
Systems. Over 120 units have been built since the mid1960s and the company claims that Powell technology
accounts for near 70% of the sodium hypochlorite
produced in North America.

12

Chemical production processes contrasts with those
verified for OSG systems in terms of diversity. Since the
basic principle of the process is already employed in
chlorine scrubbers, some companies use their own
expertise to build the bleach manufacturing units.

Technical Analysis
Chemistry

Raw Material

The main reaction occurring in the chlorination of caustic to
hypochlorite is shown in the following:

The raw materials to a sodium hypochlorite plant are
chlorine and sodium hydroxide, the main co-products of a
chlor-alkali facility. Chlorine and caustic soda may be locally
supplied or purchased in railroad car quantities and stored.

NaCl + NaOCl + H2O

Chlorination Reaction
However, the formed sodium hypochlorite (NaOCl) tends to
decompose through the reactions below:

NaOCl

NaCl + ½ O2
Oxygen Release

3NaOCl

Chlorine dry vapor is the preferred form for production,
either transported by pipelines from the chlor-alkali plant or
stored and shipped to the sodium hypochlorite unit as
liquid. In this form, chlorine is at least 99.5 wt. % pure, with
minor amounts of O2, N2, CO2 and water.
Other sources of chlorine are wet gas from electrolytic cells
or tail gas (also called sniff gas or vent) from a liquefaction
process. In the latter case, large content of O2, N2, CO2 and
H2 are expected, and carbonate solids formation in the
reactor could be a constraint. For the use of tail gas in large
scale bleach production, liquefaction efficiency reduction
may be necessary, which can be an additional issue.

2NaCl + NaClO3

Sodium Chlorate Formation
All reactions are exothermic, which demands a careful
temperature control, since sodium hypochlorite is very
sensitive to decomposition. Temperature must be
maintained below 35 °C in the process.
Control of pH through proper excess caustic is also an
important aspect since chlorate is formed below pH values
of about 10. At pH values higher than 13, on the other
hand, the increased ionic strength of the solution acts to
accelerate degradation. Both stored and sold bleach
solutions necessarily have their pH adjusted between 11.8
and 13 to maximize stability.
Sodium chlorate formation is the main pathway to NaClO
degradation, while oxygen release is generally very slow
and has little influence on the overall decomposition.
However, it may be troublesome in idle pumps, instruments
and piping.

Caustic can be used in both 32 and 50 wt. % purity. The
presence of contaminants in caustic is more critical to the
end product quality. Depending on its production process,
caustic may contain high quantities of sodium chloride
(NaCl), like that from diaphragm electrolytic cells.
Bleach strength is determined by caustic concentration and
dilution is invariably necessary, often with soft water.
Moreover, the maximum NaOH concentration should not
exceed 20-22 wt. % to avoid salt (NaCl) precipitation. The
use of initial sodium hydroxide in superior concentrations is
only wanted to yield low salt bleach. Small amounts of such
solutions are sold for special applications, but the salt
generated is usually not removed.

Intratec | Technical Analysis

2 NaOH + Cl2

13

Technology Overview
The process is separated into two different sections:
Reaction & Product Discharge; and Bleach Filtration. The
simplified block flow diagram presented in Figure 5
summarizes the process.
The chlorine absorption system can be divided into two
parts: in the first, a packed column is operated with a safe
excess of caustic soda to prevent reduction in pH; the
second part, in turn, receives the liquor from the first
column to be postchlorinated, until the desired bleach
concentration is reached. This technique prevents sodium
hypochlorite decomposition.

The second part of the system is very similar to the first and
conducts the rest of the chlorination reaction. The bleach
product is then sent to the filtration steps.
Bleach filtration is necessary to meet product quality
requirements and is often the last step before storage.
Backwash water containing spent filter aid can be further
processed.

Firstly, caustic soda is diluted with water in a first buffer tank,
along with first column bottom stream. The resulting
solution is then recycled through the first recycle pump and
cooled before reaching the top of the column. Chlorine is
diluted with air and fed into the bottom of both columns.
Flow to the second part of the system is established when
the finished product is being sent to storage, in the second
part of the system.

Figure 5 – Process Block Flow Diagram

Off-Gas to
Scrubber
Air
Chlorine
Caustic Soda

Area 100
Reaction &
Product Discharge

Area 200
Bleach Filtration

Bleach to
Storage

Water
Backwash Water
to Disposal



14

15


Technical Assumptions
All process design and economics are based on world-class
capacity units that are competitive globally. Assumptions
regarding the thermodynamic model used, reactor design
basis and the raw materials composition are shown in Table
5. All data used to develop the process flow diagram was
based on publicly available information.

Table 5 – Design & Simulation Assumptions

Table 4 – Raw Materials & Utilities Consumption (per
ton of Product)

Labor Requirements

Table 6 – Labor Requirements for a Typical Plant



16




Figure 6 – Inside Battery Limits Conceptual Process Flow Diagram

17

Table 7 presents the main streams composition and
operating conditions. For a more complete material
balance, see the “Appendix A. Mass Balance & Streams
Properties”


Detailed information regarding utilities flow rates is
provided in “Appendix B. Utilities Consumptions
Breakdown”. For further details on greenhouse gas
emissions caused by this process, see “Appendix C. Process
Carbon Footprint”.

18

ISBL Major Equipment List
Table 8 shows the equipment list by area. It also presents a
brief description and the construction materials used.
Find main specifications for each piece of equipment in
“Appendix D. Equipment Detailed List & Sizing”.

OSBL Major Equipment List
Table 9 shows the list of tanks located on the storage area
and the energy facilities required in the construction of a
non-integrated unit.


The OSBL is divided into three main areas: storage (Area
700), energy & water facilities (Area 800), and support &
auxiliary facilities (Area 900).

19

20


Figure 7 – Alternative Bleach Production

Caustic Soda
Water
Caustic
Dilution Tank

Chlorine
Reactor

Off-Gas Outlet

Bleach

Level
Transmitter

Analyzer


Source: (Kenneth & Lewis, 2010)


Figure 8 – Temperature Dependency in Bleach
Degradation

21

Economic Analysis
The general assumptions for the base case of this study are
outlined below.

Table 10 – Base Case General Assumptions

In Table 10, the IC Index stands for Intratec chemical plant
Construction Index, an indicator, published monthly by
Intratec, to scale capital costs from one time period to
another.
This index reconciles price trends of the fundamental
components of a chemical plant construction such as labor,
material and energy, providing meaningful historical and
forecast data for our readers and clients.
The assumed operating hours per year indicated does not
represent any technology limitation; rather, it is an
assumption based on usual industrial operating rates.


Intratec | Economic Analysis

Figure 9 – Project Implementation Schedule

22


Additionally, Table 10 discloses assumptions regarding the
project complexity, technology maturity and data reliability,
which are of major importance for attributing reasonable
contingencies for the investment and for evaluating the
overall accuracy of estimates. Definitions and figures for
both contingencies and accuracy of economic estimates
can be found in this publication in the chapter “Technology
Economics Methodology.”

Project Implementation
Schedule

“Appendix E. Detailed Capital Expenses” provides a detailed
breakdown for the direct expenses, outlining the share of
each type of equipment in total.

The main objective of knowing upfront the project
implementation schedule is to enhance the estimates for
both capital initial expenses and return on investment.

After defining the total direct cost, the TFI is established by
adding field indirect costs, engineering costs, overhead,
contract fees and contingencies.

The implementation phase embraces the period from the
decision to invest to the start of commercial production.
This phase can be divided into five major stages: (1) Basic
Engineering, (2) Detailed Engineering, (3) Procurement, (4)
Construction, and (5) Plant Start-up.

Table 12 – Total Fixed Investment Breakdown (USD
Thousands)

The duration of each phase is detailed in Figure 9.

Capital Expenditures
Fixed Investment
Table 11 shows the bare equipment cost associated with
each area of the project.

Table 11 – Bare Equipment Cost per Area (USD
Thousands)


Fundamentally, the direct costs are the total direct material
and labor costs associated with the equipment (including
installation bulks). In other words, the total direct expenses
represent the total equipment installed cost.



Table 12 presents the breakdown of the total fixed
investment (TFI) per item (direct & indirect costs and
process contingencies). For further information about the
components of the TFI, please see the chapter “Technology
Economics Methodology.”

23

Indirect costs are defined by the American Association of
Cost Engineers (AACE) Standard Terminology as those
"costs which do not become a final part of the installation
but which are required for the orderly completion of the
installation."

This study analyzes the total fixed investment for two
distinct scenarios regarding OSBL facilities:
Non-Integrated Plant
Plant Partially Integrated

The indirect project expenses are further detailed in
“Appendix E. Detailed Capital Expenses”
Alternative OSBL Configurations
The total fixed investment for the construction of a new
chemical plant is greatly impacted by how well it will be
able to take advantage of the infrastructure already installed
in that location.

The detailed definition, as well as the assumptions used for
each scenario is presented in the chapter “About this
Study.”
The influence of the OSBL facilities on the capital
investment is depicted in Figure 10 and in Figure 11.

For example, if there are nearby facilities consuming a unit’s
final product or supplying a unit’s feedstock, the need for
storage facilities significantly decreases, along with the total
fixed investment required. This is also true for support
facilities that can serve more than one plant in the same
complex, such as a parking lot, gate house, etc.

Figure 10 – Total Direct Cost of Different Integration Scenarios (USD Thousands)



24

Figure 11 – Total Fixed Investment of Different Integration Scenarios (USD Thousands)


Working Capital
Working capital, described in Table 13, is another significant
investment requirement. It is needed to meet the costs of
labor; maintenance; purchase, storage, and inventory of
field materials; and storage and sales of product(s).
Assumptions for working capital calculations are found in
“Appendix F. Economic Assumptions”.



Table 13 – Working Capital (USD Million)

25

Other Capital Expenses
Start-up costs should also be considered when determining
the total capital expenses. During this period, expenses are
incurred for employee training, initial commercialization
costs, manufacturing inefficiencies and unscheduled plant
modifications (adjustment of equipment, piping,
instruments, etc.).

Table 15 – CAPEX (USD Million)

Initial costs are not addressed in most studies on estimating
but can become a significant expenditure. For instance, the
initial catalyst load in reactors may be a significant cost and,
in that case, should also be included in the capital
estimates.


The purchase of technology through paid-up royalties or
licenses is considered to be part of the capital investment.

Manufacturing Costs

Other capital expenses frequently neglected are land
acquisition and site development. Although these are small
parts of the total capital expenses, they should be included.

Operational Expenditures

The manufacturing costs, also called Operational
Expenditures (OPEX), are composed of two elements: a fixed
cost and a variable cost. All figures regarding operational
costs are presented in USD per ton of product.
Table 16 shows the manufacturing fixed cost.

Table 14 – Other Capital Expenses (USD Million)

To learn more about the assumptions for manufacturing
fixed costs, see the “Appendix F. Economic Assumptions”

Table 16 – Manufacturing Fixed Cost (USD/ton)



Assumptions used to calculate other capital expenses are
provided in “Appendix F. Economic Assumptions.”

26

Total Capital Expenses
Table 15 presents a summary of the total Capital
Expenditures (CAPEX) detailed in this section.

Table 17 discloses the manufacturing variable cost
breakdown.

Table 17 – Manufacturing Variable Cost (USD/ton)

Economic Datasheet
The Technology Economic Datasheet, presented in Table
19, is an overall evaluation of the technology's production
costs in a US Gulf Coast based plant.
The expected revenues in products sales and initial
economic indicators are presented for a short-term
assessment of its economic competitiveness.


Table 18 shows the OPEX of the presented technology.

Table 18 – OPEX (USD/ton)


Figure 12 depictures Sales and OPEX historic data. Figure 13
compares the project EBITDA trends with Intratec
Profitability Indicators (IP Indicators). The Basic Chemicals IP
Indicator represents basic chemicals sector profitability,
based on the weighted average EBITDA margins of major
global basic chemicals producers. Alternately, the Chemical
Sector IP Indicator reveals the overall chemical sector
profitability, through a weighted average of the IP Indicators
calculated for three major chemical industry niches: basic,
specialties and diversified chemicals.


Historical Analysis

27

Figure 12 – OPEX and Product Sales History (USD/ton)



Figure 13 – EBITDA Margin & IP Indicators History Comparison

28


29


Regional Comparison & Economic Discussion
Regional Comparison
Capital Expenses
Variations in productivity, labor costs, local steel prices,
equipment imports needs, freight, taxes and duties on
imports, regional business environments and local
availability of sparing equipment were considered when
comparing capital expenses for the different regions under
consideration in this report.
Capital costs are adjusted from the base case (a plant
constructed on the US Gulf Coast) to locations of interest by
using location factors calculated according to the items
aforementioned. For further information about location
factor calculation, please examine the chapter “Technology
Economics Methodology.” In addition, the location factors
for the regions analyzed are further detailed in “Appendix F.
Economic Assumptions.”

Intratec | Regional Comparison & Economic Discussion

Figure 14 – CAPEX per Location (USD Million)

30


Figure 14 summarizes the total Capital Expenditures
(CAPEX) for two locations.

Specific regional conditions influence prices for raw
materials, utilities and products. Such differences are thus
reflected in the operating costs. An OPEX breakdown
structure for the different locations approached in this study
is presented in Figure 15.

Economic Datasheet
The Technology Economic Datasheet, presented in Table
20, is an overall evaluation of the technology's capital
investment and production costs in the alternative location
analyzed in this study.

Figure 15 – Operating Costs Breakdown per Location (USD/ton)



31

32


Intratec | References

References

33

Acronyms, Legends & Observations
AACE: American Association of Cost Engineers

SB: Steam boiler

ANSI/NSF: American National Standards Institute/National
Sanitation Foundation

T: Tanks (e.g., T-101 would denote a tank tag)
TFI: Total Fixed Investment

C: Distillation, stripper, scrubber columns (e.g., C-101 would
denote a column tag)
CAPEX: Capital expenditures
E: Heat exchangers, heaters, coolers, condensers, reboilers
(e.g., E-101 would denote a heat exchanger tag)

TPC: Total process capital
V: Horizontal or vertical drums, vessels (e.g., V-101 would
denote a vessel tag)
X: Special equipment (e.g., X-101 would denote a special
equipment tag)

EBIT: Earnings before Interest and Taxes
EBITDA: Earnings before Interests, Taxes, Depreciation and
Amortization
F: Filter (e.g., F-101 would denote a filter tag)
FRP: Fiberglass-reinforced plastic
IC Index: Intratec Chemical Plant Construction Index
IP Indicator: Intratec Chemical Sector Profitability Indicator
ISBL: Inside battery limits
K: Compressors, blowers, fans (e.g., K-101 would denote a
compressor tag)
kta: thousands metric tons per year
OPEX: Operational Expenditures

Intratec | Acronyms, Legends & Observations

ORP: Oxidation-reduction potential

34

OSBL: Outside battery limits
OSE: On-site electrochlorination
OSG: On-site generation systems
P: Pumps (e.g., P-101 would denote a pump tag)
PVC: Polyvinyl chloride
R: Reactors, treaters (e.g., R-101 would denote a reactor tag)

Obs.: 1 ton = 1 metric ton = 1,000 kg

Technology Economics Methodology

Introduction
The same general approach is used in the development of
all Technology Economics assignments. To know more
about Intratec’s methodology, see Figure 16.
While based on the same methodology, all Technology
Economics studies present uniform analyses with identical
structures, containing the same chapters and similar tables
and charts. This provides confidence to everyone interested
in Intratec’s services since they will know upfront what they
will get.

Workflow
Once the scope of the study is fully defined and
understood, Intratec conducts a comprehensive
bibliographical research in order to understand technical
aspects involved with the process analyzed.
Subsequently, the Intratec team simultaneously develops
the process description and the conceptual process flow
diagram based on:
a.

Non-confidential information provided by technology
licensors

c.

Then, a cost analysis is performed targeting ISBL & OSBL
fixed capital costs, manufacturing costs, and overall working
capital associated with the examined process technology.
Equipment costs are primarily estimated using Aspen
Process Economic Analyzer (formerly Aspen Icarus)
customized models and Intratec's in-house database.
Cost correlations and, occasionally, vendor quotes of unique
and specialized equipment may also be employed. One of
the overall objectives is to establish Class 3 cost estimates 1
with a minimum design engineering effort.
Next, capital and operating costs are assembled in Microsoft
Excel spreadsheets, and an economic analysis of such
technology is performed.
Finally, two analyses are completed, examining:
a.

The total fixed investment in different construction
scenarios, based on the level of integration of the plant
with nearby facilities

b.

The capital and operating costs for a second different
plant location

Intratec's in-house database

d.

Equipment sizing specifications are defined based on
Intratec's equipment design capabilities and an extensive
use of AspenONE Engineering Software Suite that enables
the integration between the process simulation developed
and equipment design tools. Both equipment sizing and
process design are prepared in conformance with generally
accepted engineering standards.

Patent and technical literature research

b.

From this simulation, material balance calculations are
performed around the process, key process indicators are
identified and main equipment listed.

Process design skills

Next, all the data collected are used to build a rigorous
steady state process simulation model in Aspen Hysys
and/or Aspen Plus, leading commercial process
flowsheeting software tools.

1

These are estimates that form the basis for budget authorization,
appropriation, and/or funding. Accuracy ranges for this class of
estimates are + 10% to + 30% on the high side, and - 10 % to - 20 %
on the low side.

Intratec | Technology Economics Methodology

Intratec Technology Economics methodology
ensures a holistic, coherent and consistent
techno-economic evaluation, ensuring a clear
understanding of a specific mature chemical
process technology.

35

Figure 16 – Methodology Flowchart

Study Understanding Validation of Project Inputs
Patent and Technical
Literature Databases

Intratec Internal Database

Non-Confidential
Information from
Technology Licensors or
Suppliers

Bibliographical Research

Technical Validation –
Process Description &
Flow Diagram

Capital Cost (CAPEX)
& Operational Cost (OPEX)
Estimation

Construction Location
Factor
(http://base.intratec.us)

36

Material & Energy Balances, Key
Process Indicators, List of
Equipment & Equipment Sizing

Pricing Data Gathering: Raw
Materials, Chemicals,
Utilities and Products


Vendor Quotes

Economic Analysis

Aspen Plus, Aspen Hysys
Aspen Exchanger Design &
Rating, KG Tower, Sulcol
and Aspen Energy Analyzer

Analyses of
Different Construction
Scenarios and Plant Location

Project Development Phases
Information Gathering / Tools


Final Review &
Adjustments

Aspen Process Economic
Analyzer, Aspen Capital
Cost Estimator, Aspen InPlant Cost Estimator &
Intratec In-House Database

Capital & Operating Cost
Estimates

Process equipment (e.g., reactors and vessels, heat
exchangers, pumps, compressors, etc.)
Process equipment spares

The cost estimate presented in the current study considers
a process technology based on a standardized design
practice, typical of a major chemical company. The specific
design standards employed can have a significant impact
on capital costs.
The basis for the capital cost estimate is that the plant is
considered to be built in a clear field with a typical large
single-line capacity. In comparing the cost estimate hereby
presented with an actual project cost or contractor's
estimate, the following must be considered:
Minor differences or details (many times, unnoticed)
between similar processes can affect cost noticeably.
The omission of process areas in the design considered
may invalidate comparisons with the estimated cost
presented.
Industrial plants may be overdesigned for particular
objectives and situations.
Rapid fluctuation of equipment or construction costs
may invalidate cost estimate.
Equipment vendors or engineering companies may
provide goods or services below profit margins during
economic downturns.
Specific locations may impose higher taxes and fees,
which can impact costs considerably.

Housing for process units
Pipes and supports within the main process units
Instruments, control systems, electrical wires and other
hardware
Foundations, structures and platforms
Insulation, paint and corrosion protection
In addition to the direct material and labor costs, the ISBL
addresses indirect costs, such as construction overheads,
including: payroll burdens, field supervision, equipment
rentals, tools, field office expenses, temporary facilities, etc.

OSBL Investment
The OSBL investment accounts for auxiliary items necessary
to the functioning of the production unit (ISBL), but which
perform a supporting and non-plant-specific role. OSBL
items considered may vary from process to process. The
OSBL investment could include the installed cost of the
following items:
Storage and packaging (storage, bagging and a
warehouse) for products, feedstocks and by-products
Steam units, cooling water and refrigeration systems
Process water treating systems and supply pumps

ISBL Investment
The ISBL investment includes the fixed capital cost of the
main processing units of the plant necessary to the
manufacturing of products. The ISBL investment includes
the installed cost of the following items:

Boiler feed water and supply pumps
Electrical supply, transformers, and switchgear
Auxiliary buildings, including all services and
equipment of: maintenance, stores warehouse,
laboratory, garages, fire station, change house,
cafeteria, medical/safety, administration, etc.
General utilities including plant air, instrument air, inert
gas, stand-by electrical generator, fire water pumps,
etc.
Pollution control, organic waste disposal, aqueous
waste treating, incinerator and flare systems


In addition, no matter how much time and effort are
devoted to accurately estimating costs, errors may occur
due to the aforementioned factors, as well as cost and labor
changes, construction problems, weather-related issues,
strikes, or other unforeseen situations. This is partially
considered in the project contingency. Finally, it must
always be remembered that an estimated project cost is not
an exact number, but rather is a projection of the probable
cost.

37

Working Capital
For the purposes of this study, 2 working capital is defined as
the funds, in addition to the fixed investment, that a
company must contribute to a project. Those funds must
be adequate to get the plant in operation and to meet
subsequent obligations.
The initial amount of working capital is regarded as an
investment item. This study uses the following
items/assumptions for working capital estimation:
Accounts receivable. Products and by-products
shipped but not paid by the customer; it represents
the extended credit given to customers (estimated as a
certain period – in days – of manufacturing expenses
plus depreciation).
Accounts payable. A credit for accounts payable such
as feedstock, catalysts, chemicals, and packaging
materials received but not paid to suppliers (estimated
as a certain period – in days – of manufacturing
expenses).
Product inventory. Products and by-products (if
applicable) in storage tanks. The total amount depends
on sales flow for each plant, which is directly related to
plant conditions of integration to the manufacturing of
product‘s derivatives (estimated as a certain period – in
days – of manufacturing expenses plus depreciation,
defined by plant integration circumstances).

Cash on hand. An adequate amount of cash on hand
to give plant management the necessary flexibility to
cover unexpected expenses (estimated as a certain
period – in days – of manufacturing expenses).

Start-up Expenses
When a process is brought on stream, there are certain onetime expenses related to this activity. From a time
standpoint, a variable undefined period exists between the
nominal end of construction and the production of quality
product in the quantity required. This period is commonly
referred to as start-up.
During the start-up period expenses are incurred for
operator and maintenance employee training, temporary
construction, auxiliary services, testing and adjustment of
equipment, piping, and instruments, etc. Our method of
estimating start-up expenses consists of four components:
Labor component. Represents costs of plant crew
training for plant start-up, estimated as a certain
number of days of total plant labor costs (operators,
supervisors, maintenance personnel and laboratory
labor).
Commercialization cost. Depends on raw materials
and products negotiation, on how integrated the plant
is with feedstock suppliers and consumer facilities, and
on the maturity of the technology. It ranges from 0.5%
to 5% of annual manufacturing expenses.


Raw material inventory. Raw materials in storage
tanks. The total amount depends on raw material
availability, which is directly related to plant conditions
of integration to raw material manufacturing
(estimated as a certain period – in days – of raw
material delivered costs, defined by plant integration
circumstances).

38

Start-up inefficiency. Takes into account those
operating runs when production cannot be
maintained or there are false starts. The start-up
inefficiency varies according to the process maturity:
5% for new and unproven processes, 2% for new and
proven processes, and 1% for existing licensed
processes, based on annual manufacturing expenses.

In-process inventory. Material contained in pipelines
and vessels, except for the material inside the storage
tanks (assumed to be 1 day of manufacturing
expenses).

Unscheduled plant modifications. A key fault that
can happen during the start-up of the plant is the risk
that the product(s) may not meet specifications
required by the market. As a result, equipment
modifications or additions may be required.

Supplies and stores. Parts inventory and minor spare
equipment (estimated as a percentage of total
maintenance materials costs for both ISBL and OSBL).

2
The accounting definition of working capital (total current assets
minus total current liabilities) is applied when considering the
entire company.

Prepaid Royalties. Royalty charges on portions of the
plant are usually levied for proprietary processes. A
value ranging from 0.5 to 1% of the total fixed
investment (TFI) is generally used.
Site Development. Land acquisition and site
preparation, including roads and walkways, parking,
railroad sidings, lighting, fencing, sanitary and storm
sewers, and communications.

Manufacturing Costs
Manufacturing costs do not include post-plant costs, which
are very company specific. These consist of sales, general
and administrative expenses, packaging, research and
development costs, and shipping, etc.
Operating labor and maintenance requirements have been
estimated subjectively on the basis of the number of major
equipment items and similar processes, as noted in the
literature.
Plant overhead includes all other non-maintenance (labor
and materials) and non-operating site labor costs for
services associated with the manufacture of the product.
Such overheads do not include costs to develop or market
the product.
G & A expenses represent general and administrative costs
incurred during production such as: administrative
salaries/expenses, research & development, product
distribution and sales costs.

Contingencies
Contingency constitutes an addition to capital cost
estimations, implemented based on previously available
data or experience to encompass uncertainties that may
incur, to some degree, cost increases. According to
recommended practice, two kinds of contingencies are
assumed and applied to TPC: process contingency and
project contingency.
Process contingency is utilized in an effort to lessen the
impact of absent technical information or the uncertainty of
that which is obtained. In that manner, the reliability of the
information gathered, its amount and the inherent
complexity of the process are decisive for its evaluation.
Errors that occur may be related to:

Uncertainty in process parameters, such as severity of
operating conditions and quantity of recycles
Addition and integration of new process steps
Estimation of costs through scaling factors
Off-the-shelf equipment
Hence, process contingency is also a function of the
maturity of the technology, and is usually a value between
5% and 25% of the direct costs.
The project contingency is largely dependent on the plant
complexity and reflects how far the conducted estimation is
from the definitive project, which includes, from the
engineering point of view, site data, drawings and sketches,
suppliers’ quotations and other specifications. In addition,
during construction some constraints are verified, such as:
Project errors or incomplete specifications
Strike, labor costs changes and problems caused by
weather

Table 21 – Project Contingency
Plant Complexity

Complex

Typical

Simple

Project Contingency

25%

20%

15%


Intratec’s definitions in relation to complexity and maturity
are the following:

Table 22 – Criteria Description

Simple

Complexity

Typical

Somewhat simple, widely
known processes
Regular process
Several unit operations, extreme

Complex

temperature or pressure, more
instrumentation

New &
Maturity

Proven
Licensed

From 1 to 2 commercial plants
3 or more commercial plants



Other Capital Expenses

39

Accuracy of Economic Estimates
The accuracy of estimates gives the realized range of plant
cost. The reliability of the technical information available is
of major importance.

Table 23 – Accuracy of Economic Estimates

Reliability

Accuracy

Very

Low

Moderate

High

+ 30%

+ 22%

+ 18%

+ 10%

- 20%

- 18%

- 14%

- 10%

High


The non-uniform spread of accuracy ranges (+30 to – 20 %,
rather than ±25%, e.g.) is justified by the fact that the
unavailability of complete technical information usually
results in under estimating rather than over estimating
project costs.

Location Factor
A location factor is an instantaneous, total cost factor used
for converting a base project cost from one geographic
location to another.

A properly estimated location factor is a powerful tool, both
for comparing available investment data and evaluating
which region may provide greater economic attractiveness
for a new industrial venture. Considering this, Intratec has
developed a well-structured methodology for calculating
Location Factors, and the results are presented for specific
regions’ capital costs comparison.
Intratec’s Location Factor takes into consideration the
differences in productivity, labor costs, local steel prices,
equipment imports needs, freight, taxes and duties on
imported and domestic materials, regional business
environments and local availability of sparing equipment.
For such analyses, all data were taken from international
statistical organizations and from Intratec’s database.
Calculations are performed in a comparative manner, taking
a US Gulf Coast-based plant as the reference location. The
final Location Factor is determined by four major indexes:
Business Environment, Infrastructure, Labor, and Material.
The Business Environment Factor and the Infrastructure
Factor measure the ease of new plant installation in
different countries, taking into consideration the readiness
of bureaucratic procedures and the availability and quality
of ports or roads.

Figure 17 – Location Factor Composition

Location Factor


Material Index

40

Domestic Material Index
Relative Steel Prices
Labor Index
Taxes and Freight
Rates
Spares
Imported Material
Taxes and Freight
Rates
Spares


Labor Index
Local Labor Index
Relative Salary
Productivity
Expats Labor

Infrastructure Factor
Ports, Roads, Airports
and Rails (Availability
and Quality)
Communication
Technologies
Warehouse
Infrastructure
Border Clearance
Local Incentives

Business Environment
Factor
Readiness of
Bureaucratic
Procedures
Legal Protection of
Investors
Taxes

Labor and material, in turn, are the fundamental
components for the construction of a plant and, for this
reason, are intrinsically related to the plant costs. This
concept is the basis for the methodology, which aims to
represent the local discrepancies in labor and material.
Productivity of workers and their hourly compensation are
important for the project but, also, the qualification of
workers is significant to estimating the need for foreign
labor.
On the other hand, local steel prices are similarly important,
since they are largely representative of the costs of
structures, piping, equipment, etc. Considering the
contribution of labor in these components, workers’
qualifications are also indicative of the amount that needs
to be imported. For both domestic and imported materials,
a Spare Factor is considered, aiming to represent the need
for spare rotors, seals and parts of rotating equipment.
The sum of the corrected TFI distribution reflects the relative
cost of the plant, this sum is multiplied by the Infrastructure
and the Business Environment Factors, yielding the Location
Factor.
For the purpose of illustrating the conducted methodology,
a block flow diagram is presented in Figure 17 in which the
four major indexes are presented, along with some of their
components.


.

41

42

Intratec | Appendix A. Mass Balance & Streams Properties

43

Intratec | Appendix A. Mass Balance & Streams Properties

44

Intratec | Appendix B. Utilities Consumption Breakdown

Appendix C. Process Carbon Footprint
The process’ carbon footprint can be defined as the total
amount of greenhouse gas (GHG) emissions caused by the
process operation.
Although it is difficult to precisely account for the total
emissions generated by a process, it is possible to estimate
the major emissions, which can be divided into:

Table 27 – CO2e Emissions (ton/ton prod.)

Direct emissions. Emissions caused by process waste
streams combusted in flares.
Indirect emissions. The ones caused by utilities
generation or consumption, such as the emissions due
to using fuel in furnaces for heating process streams.
Fuel used in steam boilers, electricity generation, and
any other emissions in activities to support process
operation are also considered indirect emissions.
In order to estimate the direct emissions, it is necessary to
know the composition of the streams, as well as the
oxidation factor.
Estimation of indirect emissions requires specific data,
which depends on the plant location, such as the local
electric power generation profile, and on the plant
resources, such as the type of fuel used.


Equivalent carbon dioxide (CO2e) is a measure that
describes the amount of CO2 that would have the same
global warming potential of a given greenhouse gas, when
measured over a specified timescale.
All values and assumptions used in calculations are based
on data provided by the Environment Protection Agency
(EPA) Climate Leaders Program.


Intratec | Appendix C. Process Carbon Footprint

Table 26 – Assumptions for CO2e Emissions Calculation

45

46

Intratec | Appendix D. Equipment Detailed List & Sizing

47

Intratec | Appendix D. Equipment Detailed List & Sizing

Appendix E. Detailed Capital Expenses
Direct Costs Breakdown
Figure 18 – ISBL Direct Costs Breakdown by Equipment Type for Base Case


Intratec | Appendix E. Detailed Capital Expenses

Figure 19 – OSBL Direct Costs Breakdown by Equipment Type for Base Case

48


49

Intratec | Appendix E. Detailed Capital Expenses

Appendix F. Economic Assumptions
Capital Expenditures

Working Capital

For a better description of working capital and other capital
expenses components, as well as the location factors
methodology, see the chapter “Technology Economics
Methodology”

Table 35 – Working Capital Assumptions for Base Case
Raw Materials
Inventory

Construction Location Factors

Table 34 – Detailed Construction Location Factor
Supplies and
Stores


Intratec | Appendix F. Economic Assumptions

Table 36 – Other Capital Expenses Assumptions for
Base Case

50



Fixed Costs
Fixed costs are estimated based on the specific
characteristics of the process. The fixed costs, like operating
charges and plant overhead, are typically calculated as a
percentage of the industrial labor costs, and G & A expenses
are added as a percentage of the operating costs.

Table 37 – Other Fixed Cost Assumptions



Intratec | Appendix F. Economic Assumptions

Table 38 – Depreciation Value & Assumptions

51

Appendix G. Released Publications
The list below is intended to be an easy and quick way to
identify Intratec reports of interest. For a more complete
and up-to-date list, please visit the Publications section on
our website, www.intratec.us.
TECHNOLOGY ECONOMICS
Propylene Production via Metathesis: Propylene
production via metathesis from ethylene and butenes,
in a process similar to Lummus OCT.
Propylene Production via Propane
Dehydrogenation: Propane dehydrogenation (PDH)
process conducted in moving bed reactors, in a
process similar to UOP OLEFLEX™.
Propylene Production from Methanol: Propylene
production from methanol, in a process is similar to
Lurgi MTP®.
Polypropylene Production via Gas Phase Process: A
gas phase type process similar to the Dow UNIPOL™ PP
process to produce both polypropylene homopolymer
and random copolymer.
Polypropylene Production via Gas Phase Process,
Part 2: A gas phase type process similar to Lummus
NOVOLEN® for production of both homopolymer and
random copolymer.

Intratec | Appendix G. Released Publications

Sodium Hypochlorite Chemical Production: Sodium
hypochlorite (bleach) production, in a widely used
industrial process, similar to that employed by Solvay
Chemicals, for example.

52

Dehydrogenation, Part 2: Propane dehydrogenation
(PDH) in fixed bed reactors, in a process is similar to
Lummus CATOFIN®.
Dehydrogenation, Part 3: Propane dehydrogenation
(PDH) by applying oxydehydrogenation, in a process
similar to the STAR PROCESS® licensed by Uhde.

CONCEPTUAL DESIGN
Membranes on Polypropylene Plants Vent Recovery:
The Report evaluates membrane units for the
separation of monomer and nitrogen in PP plants,
similar to the VaporSep® system commercialized by
MTR.
Use of Propylene Splitter to Improve Polypropylene
Business: The report assesses the opportunity of
purchasing the less valued RG propylene to produce
the PG propylene raw material used in a PP plant.

Appendix H. Technology Economics Form
Submitted by Client

Appendix H.
Technology Economics Form
Submitted by Client

Chemical Produced by the Technology to be Studied
Define the main chemical product of your interest.
Choose a Chemical

Sodium Hypochlorite
E.g. Acrylonitrile butadiene styrene (ABS), Methyltert-butylether

For the purpose of our studies, chemicals in the list below are considered to be commodities and are offered under a special pricing policy. To order studies on
these chemicals access www.intratec.us/advisory/technology-economics/order-commodities.
We consider acetic acid, acetone, acrylic acid, acrylonitrile, adipic acid, aniline, benzene, butadiene, chlorine, n-butanol, iso-butylene, caprolactam, cumene,
ethanol, ethylene, bio-ethylene, ethylene glycol, ethylene oxide (EO), formaldehyde, HDPE, isoprene, LDPE, LLDPE, methanol, methyl methacrylate, MDI,
phenol, polybutylene terephthalate, polycarbonate (PC), polyethylene terephthalate (PET), polypropylene (PP), polystyrene (PS), polyurethanes (PU),
polyvinyl chloride (PVC), propylene, propylene glycol, propylene oxide (PO), terephthalic acid and vinyl chloride (VCM) to be commodities.

Chemical Process Technology to be Studied
Identify the mature chemical process technology you would like us to assess. Intratec considers mature technologies the ones already used on
a commercial scale plant.
Technology Description

Chemical production from Sodium Hydroxide and Chlorine similar to Solvay chemical process.
E. g. technology for propylene production from methanol - similar to Lurgi MTP

Commercial Scale Unit. Inform the exact location of one commercial scale plant under operation.
Plant Location:

I don't know
I know the location of a commercial plant:

If there is no commercial scale plant based on the technology of your interest, you are referred to Intratec's Research Potential advisory service at
www.intratec.us/advisory/research-potential/overview

Industrial Unit Description
Inform the plant capacity to be considered in the study. Please
provide the main product capacity in kta (thousands of metric
tons per year of main chemical product)

Inform the assumption for the number of hours the plant
operates in a year.

Plant Nominal Capacity

Operating Hours

150 kta
300 kta
Other (kta)

8,000 h/year
Other (h/year)

250

Analysis Date
Define the date (quarter and year) that will be considered in the analysis. Our databases can provide consolidated values from the year 2000
up to the last closed quarter, quarter-to-date values are estimated.
Quarter

Q1

Year

2012

Storage Facilities
Define the assumptions employed for the storage facilities design.
Products

20 days

By-Products

20 days

Other

Raw Materials

Other

20 days
Other

0

Utilities Supply Facilities
The construction of supply facilities for the utilities required (e.g. cooling tower, boiler unit, refrigeration unit) impacts the capital investment
for the construction of the unit.
Consider construction of supply facilities ?

Yes

No

General Design Conditions
General utilities and environmental conditions that may be relevant to the process simulation are presented below. Provide other assumptions if
you deem necessary.
Specification

Unit

Default Value

User-specified value

Cooling water temperature

ºC

24

DSPEC1

Cooling water range

ºC

11

DSPEC2

Steam (Low Pressure)

bar abs

7

DSPEC3

Steam (Medium Pressure)

bar abs

11

DSPEC4

Steam (High Pressure)

bar abs

28

DSPEC5

Refrigerant (Ethylene)

ºC

-100

DSPEC6

Refrigerant (Propane)

ºC

-40

DSPEC7

Refrigerant (Propylene)

ºC

-45

DSPEC8

Dry Bulb Air Temperature

ºC

38

DSPEC9

Wet Bulb Air Temperature

ºC

25

DS10

Industrial Unit Location
The location of an industrial unit influences in prices for both construction and operation of the unit. In this study, the economic performances
of TWO similar units erected in different locations are compared.
The first plant is located in the United States (US Gulf Coast) and the second location is defined by YOU.
Plant Location

I would like to keep the plant location confidential.
Country (or region) or region to be considered.

Brazil

E.g. Louisiana (USA), China or Saudi Arabia. Please define only one location.
Plant Location Data
Provider

I will use Intratec's Internal Database containing standard chemical prices and location factors (only for
Germany, Japan, China or Brazil).
I will provide location specific data. Please fill in the Custom Location topic below.

Custom Location Description. Describe both capital investment and prices at your custom location.
A) Capital Investment. Provide the relative capital cost at your custom location in comparison to the United States (U.S. Gulf Coast)
Custom Location Relative Cost (%)
130% means that the capital costs in the custom location are 30% higher than the costs in the United States.
B) Raw Materials Prices. Describe the raw material prices to be considered in the custom location.
Item Description

Price Unit

Price

Raw1

Chlorine

RU1

USD/metric ton

RP1

Raw2

Caustic Soda

RU2

USD/metric ton

RP2

Raw3
E.g.

RU3
Propane

RP3
USD/metric ton

420

C) Product Prices. Describe the products prices to be considered in the custom location.
Item Description
Prod1

Sodium Hypochlorite

Price Unit
PU1

USD/metric ton

Price
PP1

Prod2

PU2

PP2

Prod3

PU3

PP3

E.g.

Polypropylene

USD/metric ton

1700

D) Utilities Prices. Describe the utilities prices to be considered in the custom location.
Item Description

Price Unit

Electricity

USD/metric ton

Price
UP1

Steam (Low Pressure)

UP2

Steam (High Pressure)

UP3

Fuel

UP4

Clarified Water

USD/m3

UP5

Util6

Air

UU6

USD/Nm3

YP6

Util7

Cooling Water

UU7

USD/m3

UP7

Util8

UU8

UP8

E) Labor Prices. Describe the labor prices to be considered in the custom location.
Item Description

Price Unit

Price

Operating Labor

USD/operator/hour

LP1

Supervision Labor

USD/supervisor/hour

LP1

F) Others. Describe any other price you deem necessary to be considered in the custom location (e.g. chemicals, catalysts, etc.)
Item Description

Price Unit

Price

Other1

OU1

OP1

Other2

OU2

OP2

Other3

OU3

OP3

E.g.

Catalyst

USD/metric ton

5000

Technology Economics: Sodium Hypochlorite Chemical Production

Technology Economics: Sodium Hypochlorite Chemical Production

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