PIPING COSTING

1. Introduction
The selection of the optimal pipeline route, diameter, material, wall thickness, pump
station location, pump units and operational equipment or facilities is typically the result of
economic analysis and investment capital evaluation of the most reasonable scenarios
developed through
the design phase.
Typically, even before the detailed design of a pipeline system has begun, an order-ofmagnitude cost study will be performed, with the goal of determining the feasibility of
continuing to invest time and capital in the design phase of the project.
For a typical cross country pipeline project, the cost of pipe and its
associated construction and installation costs can be as much as 80% of
the capital investment , therefore , the selection of the pipe, with regard
to the type of material, size etc. is very important.
A piping works engineer requires not only wide engineering knowledge
not necessarily in depth , but certainly an understanding but he must
also have an understanding of engineering economics, costs of
metallurgical, methods of pipe fabrication, erection and sufficient
knowledge of mechanical, civil, electrical and instrumentation
engineering to discuss the requirements.
2. Direct and Indirect Costs Associated with Piping
The direct cost of piping is related to the purchase and installation of
piping along with accessories. i.e. it deals with raw materials, labour,
energy etc.
Indirect cost includes:
Design and engineering cost, which cover the cost of design and cost of
engineering of the piping system, purchasing, procurement and
construction supervision.
Contractors fees (Technology Fee)

 Contingency allowance, this is an allowance to cover for unforeseen

circumstances ( labour disputes, design errors etc.).
3. Economic Evaluation of the Piping System
As the purpose of investing money in modern piping system is to earn
money, some means of comparing the economic performance of piping
is needed.
For a small piping system , and for simple choices between alternative
processing schemes , the decisions can usually be made by comparing
the capital and operating costs. More sophisticated evaluation
techniques and economic criteria are needed when decisions have to be
made between large, complex piping systems, particularly when the
piping systems differ widely in scope, time scale, etc.
Making major investment decisions in the face of uncertainties that
will undoubtedly exist about plant performance, costs, the market
Government policy and the world economic situation, is a difficult and
complex task (if not an impossible task) and in a large design
organisation, the evaluation would be done by a specialist group.
4. Economics of Pipe Diameter Concept
The sizing of process lines can be divided into two categories

Lines which do not contain pumping equipment

Lines which contain pumps or compressors

Lines in the first group are sized on the basis of available pressure drop,
while those in the second must be based on an economical pipe size ( the
smaller the pipe , the less the pipe costs but the higher the pumping costs, and thus an
optimum size must exist).
Paradoxically, however, it is uneconomical to make economic studies on each process line
for a proposed plant. The designer, therefore, must have some means of determining which
lines justify careful cost analysis.

The designer can select a conservative line size which will definitely fulfill the requirements.
But will the next smaller size be more economical? The only manner in which this can be
determined definitely is by careful economic analysis.
If the possible saving , however, is not far from the cost in the man-hours required to make
the study, it is better to select the conservative size without further use of valuable time.
If, on the other hand, the possible savings are substantial, then further detailed study is
indicated.
5. Inch Meter and Inch Diameter Concept
Purpose:
The purpose of inch meter and inch diameter is :
a. To find out piping erection load
b. Manpower planning
c. Piping work progress monitoring
d. Costing
The following example will illustrate the concept of the inch-meter and the inch-dia:
Q.1 Elbow 2" size, 20 nos., are to be fitted in a pipeline. Find out the inch dia?
Ans: Inch dia : size x no. of weld joints x no. of elbows
= 2 x 2 x 20 = 80 inch dia.
Q. 2 Find out the inch meter for 20 m pipeline of 2" size
Ans: Inch meter = Pipe size in inches x length in m
= 2" x 20 = 40 inch meter
Note : Inch meter will be more relevant in case of yard piping whereas inch dia will be more
relevant in case of plant piping.
6. Dividing the Cost of the Pipe Work
The costs of process industry pipe work are usually sub-divided as below:

1. Piping design and engineering: The cost of design work associated

with the pipe work including layout studies , scheming , analysis and
detailing.
2. Materials: The cost of all bought out materials , i.e. pipe flanges, fittings, valves,
expansion units, etc.
3. Fabrication: The cost of site fabrication , off-site fabrication, done in a
shop away and adjacent to site.
4. Erection: The cost of erecting on-site fabricated pipe work and pressure testing. This
includes preliminaries, variation orders and error
rectification if any.
Economic
Fluid Velocity (ft/s)
Pipe diameter d (in)

Pressure drop
available
(Ib/in2) / 100 ft

Pump discharge pipe

(d/3 + 5) ft/s

2.0

Pump suction pipe

(d/6 + 1.3) ft/s

0.4

Steam or gas line

20 d ft/s

0.5

Remark

For liquids, a velocity in excess of 20 ft/s should never be specified in order to avoid erosion
of the pipe. On suction lines to the pump, the pressure drop should always be less than 50%
of the total head developed by the pump.
7. Suggested Steam Pipe Velocities in Pipe Connecting Steam Turbines
SERVICE - STEAM

TYPICAL RANGE -ft/s

Inlet to turbine

100 - 150

Exhaust, non-condensing

175 - 200

Exhaust - condensing

400 500

8. Relative Economics of Various Materials of Construction

S.No.

Material

Connection

Factor

Carbon steel (C.S.), A-53,

seamless

Welded

1.00

Carbon steel (C.S.), A-53,

welded galvanised

Screwed

0.84

Wrought iron, galvanised

Screwed

1.61

Unplasticised polyvinyl
chloride

Sock, weld

1.79

Carbon steel, lead lined

Flanged

4.11

Carbon steel, PVC lined

Flanged

4.76

Stainless steel

Welded

15.00

9. Material Estimation
There are three main topics of pipe work estimation as mentioned below:
S.No.

Stage

Accuracy

Basis

Preliminary

+/- 25%

Based on %age of total plant cost

First control

+/- 20 %

Based on completed P and Is etc.

Second control

+/- 10 %

Final P and I, all pipe work details, drawings,

material list etc.

10. Fabrication Cost Estimation

The contents of fabrication cost estimation comprise the following:
1. Fabrication
2. Fabrication / Welding
3. Welding
4. Supports
11. Erection Cost Estimation
The contents of fabrication cost estimation comprise the following:

1. Erection
2. Supports
3. Testing of completed pipelines
12. Rates for Fabrication and Erection
The schedule of rates under the fabrication and erection work are established in man
hours which should be representative of the gang time to complete the operation. The type
of rate will depend on the client and contractor relationship on the basis of the contractors
tenders.
The rates shall be included or excluded, allowances for construction plant, tools, tackle and
consumables.
Typical rates for various piping materials are enclosed for reference. These include labour,
consumables, tools, tackles and overheads.
13. Typical Rates for Fabrication, Erection and Testing of Pipelines for Costing
with Example
a) Mild steel (MS), B and C class piping: Rs. 45/- per inch dia per metre
length.
b) SS 304 piping ( Sch 5): Rs. 90/- per inch dia per metre length.
c) PVC Piping: Rs.45/- per meter length.
d) Cu Piping: Rs. 100/- per inch dia metre.
e) Pipe fitting reducer, bend etc.
SS 304: Rs. 125/- per inch dia
MS: Rs. 60/- per inch dia
Copper: Rs.140/- per inch dia
f) Fabrication and erection of MS supports= Rs. 4500/- per MT.
Q. Find out the labour cost for making a MS reducer of 2" x 4" size?
Ans: MS Reducer 2" x 4" = 4x60 = Rs.240/- (Considering 4" dia)

Q. Find out the labour charges for fabrication and erection of a MS pipeline of 50 NB (2")
MS B or MS C of 400 m length fabrication and erection?
Ans: 2 x 400 x 45 = Rs.36,000/Typically the quantum of pipe fabrication, erection and testing of pipe work shall be
expressed as shown below:
1. MS B and C class piping : 12450 inch mtr
2. SS 304 piping : 2850 inch mtr
3. PVC piping : 285 inch mtr
4. Cu piping: 695 inch mtr
14. Typical Calculation for Piping Cost

Raw material

Factors

SS Condensor
tube

Copper
Condensor tube

78.50

140.00

0.79

1.40

40.00

50.00

Sheet width

mm

Raw material base

rate

Rs/kg

Packing and
forwarding

Rs/kg

Conversion

Rs/kg

Excise

16.00

19.09

30.62

Sales tax/ VAT

4.00

5.53

8.88

Insurance

0.20

0.29

0.46

Transportation

Rs/kg

2.00

2.00

Total Cost

Rs/kg

146.19

233.37

Modvat Benefit

Rs/kg

19.09

30.62

Cost to Co.

Rs/kg

127.11

202.74

Rs/mtr

93.81

246.74

1.00

15. General Scope of Work for Piping Fabrication and Erection

Fabrication, cutting, welding, assembly in position as per drawing.

 All raw material i.e. pipe, reducers, bends, flanges, sockets etc. and
hardware i.e. nut, bolts, gaskets etc. shall be supplied by client.
Fitment includes assembly of fittings i.e. flanges, bends, valves, reducer, fabrication of
tees, fitment of non return valve, valves, gaskets, nut bolts, sockets for pressure gauges
fabrication and fitment of thermowell, etc. Pipe work shall be carried out as per piping
drawings/ specifications/ instructions given to construction engineer.
After assembly, complete pipeline to be welded by taking necessary
precautions to avoid stresses. If stresses developed , those are to be
removed and welded as per standard practice and instructions of the
site co-ordinator.
One in-position weld is allowed for line which cannot be welded on
ground.
After welding , finishing and grinding , pipeline to be hydraulically tested at pressure
specified in the order.
After hydraulic testing, pipeline to be painted with redoxide ( one coat).
After painting, pipeline to be assembled in position and with necessary
clamps and supports.
16. List of Tools, Tackles and Machinery Required to Carry Out the Piping
Works
To be arranged by contractor:
1. Rectifier
2. H.F. unit
3. Transformer
4. Grinders- AG7
5. Winch 5 MT
6. Chain block 3 MT 11 mtr. Lift
7. Ropes / pulleys
8. FF2 grinder
9. Hacksaw/Files etc. and other tools and tackles.
10. Pipe voice

11. G Q 4 Grinder
12. Abrasive cutting machine
13. Gas cutting
17. Contractor Manpower List of Piping, Fabrication and Erection
For piping, fabrication and erection:
1. Experienced Mechanical Engineer as in-charge
2. Supervisor
3. Highly skilled fitter for SS 304
4. Highly skilled fitter for MS B and C class piping and fabrication
5. Welders for SS TIG, Welders for SS Tacking, Welders for MS Tacking
6. Helpers/Riggers
18. Additional Cost Information
Piping cost may vary between 20 to 66 %.
Piping cost may be a headache to the estimator as he/she is asked to
give the cost even before engineering and execution.
The estimator needs to convert the preliminary flow sheet into a fair
approximation of an actual design.
The estimator should have the skill to draw quick and rather accurate
free hand isometric sketches, which will be of inestimable value.
19. Methods used for Estimation
Piece by piece method ( Detailed costing)
Finagling factor ( 40 % of equipment cost)
N system.
20. N System
The N system is based on the fact which has been tested many times, that the costs of strings
of pipes of different sizes but of the same material and class of pipe bear constant relations
to each other. The N system was introduced by R.A. Dickson (Chem. Eng. Nov 1947, PP 121123)
21. How to use the N System

Step I : Calculate the cost of the reference sizes of the strings of pipe in question.
StepII : Then use the N factors to get the cost of the same string in the required size.