## W5_AI_Power Sizing Model and Index Value for Offshore Regasification Facility Project Cost Estimating

1. Problem Definition

The gas supply scheme has been choose using decision making models (previous weeks) is Offshore Regasification Facility. Gas demand from customer is 100 MMSCFD, so the facility shall be designed 100 MMSCFD at minimum capacity. Company has indicative price from 3 (three) different contractor (all good performance contractor). Since the company will be using the price for calculate economic model (conceptual), then the optimum average price for 100 MMSCFD gas facility must be develop, in this stage power sizing-model would be applied.

1. Identify the Possible Alternative

There are indicative historical price from 3 (three) different companies, as follow:

Table 1. Indicative Price

Table above shows the indicative price from PT.A, PT.B, and PT. C with various capacities. Furthermore to get the requirement capacity 100 MMSCFD, correlation exponent will be obtained by power sizing-model.

1. Development of The Outcome for Alternative

Picture 1 below shows the formula of power sizing-model using correlation between price and capacity.

Picture 1. Power Sizing Model Formula

Based on data and formulation above, here is the analysis and calculation for correlation exponent result:

Table 2. Correlation Exponent

Using correlation exponent (m), sizing model analysis for 100 MMSCFD for each contractor could be calculated as follow:

Table 3. Estimate Cost 100 MMSCFD

1. Selection Criteria

The optimum average price for 100 MMSCFD offshore gas facility will be defining using power sizing model.

1. Analysis & Comparison of Alternative

Picture 2. Estimate Cost 100 MMSCFD

The calculation above show still using 2012 database and to get reflection new cost 2017 the data shall be adjusted by index value.

Picture 3. Index Value Formula

Table 4. Index Value Result

1. Selection of the Preferred Alternative

The table (4) above shows the indicative price of offshore regasification facility, with the lowest price is 130.99 MMU\$ from PT. A compare to PT. B (145.84 MMU\$) and PT.C (183.55 MMU\$). Based on analysis above, PT. A  indicative price will be chosen.

1. Performance Monitoring and The Post Evaluation of Result

Power Sizing Model and Index Value above is a good formula to estimate the indicative price for conceptual economic calculation. It can be using of any kind project, such as oil & gas, automotive, power plant, etc.

Reference:

1. Planning Planet (2017). Creating The Owners Cost Estimate (Top Down).
1. Sullivan, G. W. (2014). Engineering Economy 16th Chapter 3 – Cost-Estimation Techniques, pp. 99-110.
2. Aziz, A. A. (2015). W12_AAA_Sizing Model and Economic of Scale (Gas Processing Facilities)
1. Diary, C.A (2017). Cost Inflation Index – Capital Gain.

## W5_A_Benchmark Of Cost Estimate Process refer to Humphreys Association

1.Problem Definition

On this blog posting the author will demonstrate the process of estimation stages by referring to the Estimating Process in Humphreys Association, Project Management Using Earned Value by comparing the current estimation process in the Company authors and how closely the process is carried out according to the general guidelines.

2.Develop the Feasible Alternative

On this occasion a checklist of estimation stages will be performed at the company following the estimation phases that have been prepared by Humphreys Association, Project Management Using Earned Value and find strengths and weaknesses at each stage of the process.

3.Development of The Outcome for Alternative

Humphreys Association, Project Management Using Earned Value provides 15 step of estimating process as shown on following figure-1. We will do a step by step check list with our current process.

Figure-1 Humphreys Association The Estimating Process

4.Selection Criteria

We will perform a checklist of each stage proposed by Humphreys Association in the estimation process. If it finds some difference and has the potential to improve and improve the procedure of the feeding estimation process it will greatly help improve the quality of the project estimation process.

5.Analysis and Comparison of the Alternatives.

Based on check list assessment, below are the summary shown on Tabel-1

Table. 1. Checklist Comparison Result

Based on the stages of the approach made by the Humphreys Association can be seen that not all steps are done by the company, where from 15 steps there are 5 stages that are not implemented, namely Estimate Indirect Cost, Material and Equipment Escalation, Calculate Escalation on Indirect, Calculate Escalation on Indirect, risk assessment, Develop recommended cost risk allowance and 1 stages that sometimes implemented sometimes not the Contracting Strategy.

6.Selection of the Preferred Alternative

Based on above assessment and analysis, company must consider unimplemented step, because factually 80 % project running with over budget and behind schedule. But to improve the process that does not rule out the use of other references in addition.

7.Performance Monitoring and The Post Evaluation of Result

Management should consider the use of Humphrey Associations standards as part of the estimation stage process to avoid a Over Budget and Behind Schedule Project, and does not rule out the possibility to implement other standards such as United State Government Accountability Office (GAO) and AACEI Recommended Practice in the checklist comparison.

REFERENCES :

1. Humphreys, C, G (2014), Project Management Using Earned Value 3rdEdition, Chapter 21, Estimating Development, pp.411-416