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Plant Expansion Planning

Problem

An increasing demand for chlorine for the production of plastics has caused a number of firms to examine options for increasing capacity. Several firms have announced plans for new chlorine plants; however committing the hundreds of millions of dollars to build a new facility is a major business decision.

Developing sufficiently detailed conceptual engineering for the many different cell types and configurations traditionally requires a team of engineers working for several months. The time and the expense involved usually limits the number of potential configurations and variations in the sensitivity analysis. Moreover, the decision must then be made on the basis of the single estimate without the benefit of a second opinion.

Solution

Over the past 15 years, Universal Dynamics engineers have developed an economic model of a chlorine plant that allows rapid estimation of the construction cost and operating performance.

This model was initially developed for the US Department of Energy to demonstrate the energy conservation potential for the new style membrane chlorine cells.

Based on the actual construction costs of about 15 plants, the model closely duplicates the results of the more traditional conceptual engineering approaches at a fraction of the time and total cost.

Results

Several large chlor-alkali firms have used the model to rapidly perform market surveys to determine the advisability of adding chlorine capacity or entering this business segment. The model has also been used for rapidly checking the work products generated by engineering firms developing the preliminary engineering costs. Specific benefits have been:

• Based upon the model's results, the customer was able to adjust the pre-negotiated sales contract for a new venture to insure an adequate return on investment prior to spending considerable resources on preliminary engineering.
• A $13 million error was found in the results of the primary engineering company's preliminary cost estimate.
• The customer was able to use the model's "second opinion" to form a more credible presentation to the Capital Review Committee at the corporate headquarters.
• The degree of retrofit necessary for conversion of an existing plant to the membrane process using either monopolar or bipolar chlorine cells was easily and rapidly calculated and displayed.