Satish Lele

Piping Costs
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-of-magnitude 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.

Direct 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, labor, energy etc.
Indirect Costs Associated with Piping: Design and engineering cost, which cover the cost of design and cost of “engineering” of the piping system, purchasing, procurement and construction supervision. Contractor‘s fees (Technology Fee). Contingency allowance, this is an allowance to cover for unforeseen circumstances ( labor disputes, design errors etc.).
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 organization, the evaluation would be done by a specialist group.

    Inch Meter and Inch Diameter Concept: The purpose of inch meter and inch diameter is:
  • To find out piping erection load
  • Manpower planning
  • Piping work progress monitoring
  • Costing
Elbow 2 inch size, 20 nos., are to be fitted in a pipeline. Find out the inch dia? Inch dia : size x no. of weld joints x no. of elbows = 2 x 2 x 20 = 80 inch dia.
Find out the inch meter for 20 m pipeline of 2 inch size. Inch meter = Pipe size in inches x length in m = 2 x 20 = 40 inch meter
Inch meter will be more relevant in case of yard piping whereas inch dia will be more relevant in case of plant piping.
    Dividing the Cost of the Pipe Work: The costs of process industry pipe work are usually sub-divided as below:
  • Piping design and engineering: The cost of design work associated with the pipe work including layout studies, scheming, analysis and detailing.
  • Materials: The cost of all bought out materials, i.e. pipe flanges, fittings, valves, expansion units, etc.
  • Fabrication: The cost of site fabrication, off-site fabrication, done in a shop away and adjacent to site.
  • Erection: The cost of erecting on-site fabricated pipe work and pressure testing. This includes preliminaries, variation orders and error rectification if any.
Material Estimation: There are three main topics of pipe work estimation as mentioned below:
S. No.StageAccuracyBasis
1Preliminary+/- 25%Based on %age of total plant cost
2First control+/- 20 %Based on completed P and I’s etc.
3Second control+/- 10 %Final P and I, all pipe work details, drawings, material list etc.
    Fabrication Cost Estimation: The contents of fabrication cost estimation comprise the following:
  • Fabrication
  • Fabrication / Welding
  • Welding
  • Supports
    Erection Cost Estimation: The contents of fabrication cost estimation comprise the following:
  • Erection
  • Supports
  • Testing of completed pipelines
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 contractor’s 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.
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.
Find out the labour cost for making a MS reducer of 2" x 4" size. MS Reducer 2" x 4" = 4x60 = Rs.240/- (Considering 4" dia)
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?. 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
    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 red–oxide (one coat).
  • After painting, pipeline to be assembled in position and with necessary clamps and supports.
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
Contractor Manpower List of 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
Additional Cost Information:
1. Piping cost may vary between 20 to 66 %.
2. Piping cost may be a headache to the estimator as he/she is asked to give the cost even before engineering and execution.
3. The estimator needs to convert the preliminary flow sheet into a fair approximation of an actual design.
4. The estimator should have the skill to draw quick and rather accurate free hand isometric sketches, which will be of inestimable value.

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