Project Cost Estimating

PGP/ESTIM-E

Who should attend?

  • CAPEX estimate of Oil & Gas downstream projects, including financial risk.
Audience :
  • Engineers (owner, contractor) involved in Oil & Gas downstream projects.

Level : Foundation

Course Content

  • PROJECT COST ESTIMATING METHODS

      • Project management process reminder, including deliverables at each stage.
      • Definitions, cost references, AACE classes. Direct and Indirect costs. WBS. CAPEX vs. OPEX.
  • ESTIMATION DURING THE VARIOUS PHASES OF THE PROJECT

      • Initial phase: Chilton factors, extrapolation method (comparison with similar projects). Typical accuracy and traps. Location factors.
      • Basic engineering/FEED: factored estimate (Lang/Guthrie factors), based on the cost of the main equipment. Semi-detailed estimate: cost of main equipment and works. Owner costs. Key role of engineering studies.
      • Detailed studies: detailed estimate, use in the Project process. Elements needed for final approval by owner.
      • Corrective factors: Nelson-Farrar indices, location factors.
      • Adjustments required to these methods in estimating the cost of revamping projects.
  • OPTIMIZATION OF COSTS

      • Value analysis: functional breakdown of the project, technical and economic analysis of each part.
      • Economic evaluation of process and technical alternatives. Decision-making.
  • ASSESSMENT OF FINANCIAL RISKS

      • Project financial risk identification and quantification. Potential impact on cost estimate. Upper limit. Typical values used per phase. Allowances and contingencies. Associated action plans.

Learning Objectives

  • Upon completion of the course, participants will be able to:
  • estimate the cost of a project at its various stages
  • evaluate the accuracy of this cost estimate and the main risks of cost overrun.

Ways & Means

  • Practical estimating exercise.