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OPEX COST - what elements to consider?

OPEX COST - what elements to consider?

OPEX COST - what elements to consider?

(OP)
Hi all

I am working on a FEED stage of a project and I want to estimate operating cost (OPEX).
Agree, from name it's evident that operating cost e.f. Running pumps, compressors and utility cost should be considered at the least. What else should be considered please?

Any example template would be helpful.

Thanks
KA

RE: OPEX COST - what elements to consider?

Usually the biggest operating cost is raw materials.

Good luck,
Latexman

Technically, the glass is always full - 1/2 air and 1/2 water.

RE: OPEX COST - what elements to consider?

Also included in OPEX would be all preventive maintenance costs, costs for planned annual shutdown and maintenance turnarounds(exclude production loss), wages for staff and contractors, insurance, annualised plant asset depreciation. There may be many others.
If there are JV partners, total OPEX cost would be split out between JV partners as agreed in the JV operating agreement.

RE: OPEX COST - what elements to consider?

It may be an interesting discussion with the local tax authority and the JV partners on how decomm costs and site remediation at the end of plant life are to be treated.

RE: OPEX COST - what elements to consider?

(OP)
Thanks all

I guess, it will also have cost of utility and power etc? Where I work, these are the two biggest elements while raw materials is very cheap.

Thanks
KS

RE: OPEX COST - what elements to consider?

Yes, any imported utilities would be part of "raw materials". When considering imported utilities, some sales contracts for these utilities are based on " take or pay " basis. What you dont use below a certain consumption, you still have to pay!

RE: OPEX COST - what elements to consider?

I would also include all commissioning and operational spares during project life cycle - filters, seals, valve kits, etc.

Vendor support might also play a very important role. This includes startup assistance, future maintenance (e.g. turbines, compressors, Mol Sieve changeover). Some plants I worked in have a continuous vendor support crew on site (GE turbines, Nuovo Pignone compressors, Solar turbines etc.).

All permits (annual or one-time) as well. This should also includes all fees arising from environmental emissions.
Specialty chemicals - corrosion inhibitors, Molecular Sieve, TEG, etc.

Dejan IVANOVIC
Process Engineer, MSChE

RE: OPEX COST - what elements to consider?

(OP)
Thank you all once again, your inputs are very useful and very valuable as usual...👍

Thanks
KS

RE: OPEX COST - what elements to consider?

@chemks2012

Do you want to calculate an average OPEX, or you need a more accurate OPEX calculation? e.g. function of when spare parts need to be purchased based on vendor recommendation.

RE: OPEX COST - what elements to consider?

In some countries, product development, R&D costs are tax deductible OPEX items.

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