AM-15-42 Capital Cost Estimating: Time for a Change

Description:

In our view, there are few, if any, uncertainties influencing the refining and petrochemical industry as much as capital cost estimation. Traditionally, the stated accuracy of a cost estimate is mostly a function of the amount of engineering definition that has been completed. The logic is flawless; how can one estimate the cost of a vessel when the size is not known? But with even small projects costing hundreds of millions of dollars, undertaking substantial engineering only to learn that a project is not economically viable is very costly. Owners need a way to obtain reasonable and “trendable” estimates early in a project.