One of the main concerns clients have when they hear they require a HAZOP is how much it is going to cost them. To help understand the process and the impacts on the cost of a study, we break down the key elements to a HAZOP to help clients understand.
There are several key factors which will impact the cost of your HAZOP (or similar assessment such as HAZID):
The complexity and size of scope
For any process to be assessed by HAZOP it needs to be broken down into manageable chunks known as “nodes”. Experience HAZOP facilitators will be able to tell you how many nodes they are likely to be able to assess each day. For OTECSA, based on some large studies of 40-50 nodes we know that we can typically achieve 3 nodes per day, but that can differ depending on how large or small the HAZOP lead makes each node.
The availability of information to help with preparation.
As part of the HAZOP planning process, the facilitator and scribe will need to gather and organise the required information. This will ensure that the project runs smoothly and the time taken is as expected at the estimating stage. This includes the requirement for process descriptions for the nodes being assessed. If you need the HAZOP facilitation team to produce the process descriptions, this can add significant cost due to the extra preparation time.
The location of the HAZOP.
It goes without saying that the location of the study will have an impact on cost. Since COVID the ability to carry out remote studies has increased. This is the lowest cost way to carry out a study, but be careful as this can in some cases lead to longer studies, because remote meetings are less efficient and less effective than face to face studies.
The consultant selected for the study.
Another major factor is which consultant/ company you select to do the study. Using a large corporate consultancy is likely to lead to increased costs due to their overheads and the increased cost of running those businesses. On the other end of the scale is the use of “one or two man band” consultancies, who typically have very low overheads and charge lower rates. At OTECSA although we have grown to a team of 10, we remain true to our philosophy of giving clients the best value, by maintaining low overheads and continuing to offer competitive rates for our expertise. We know from rate discussions that our HAZOPs are 30-40% lower cost than large consultancies.
Main cost factors
HAZOP costs have three main factors:
Fixed costs: This includes the preparation, reporting and checking and approvals time cost. This is typically fixed for any study (but will increase slightly as a study gets more complex).
Variable costs – study time cost: This is the cost for carrying out the study – the facilitation and scribing of the study will be directly proportional to the number of days the study will take. Your consultant should be able to advise what the cost saving would be if the study take less time than expected.
Variable costs – travel and expenses. These are the travel and expenses costs related to carrying out the HAZOP if being carried out face to face.
Typical costs to expect
Working with a company like ours, the costs you can expect will be typically in the ranges stated below. As noted above there are different types of companies you can work with on your HAZOP, and this will have a big impact on the cost charged.
As a typical example, a 1 day remote HAZOP is likely to cost £2,500 to £4,000, depending on the factors above, including whether the study is face to face or remote.
The additional cost for each day beyond the first day is likely to be £1,400 to £2,000 extra per day, depending if the HAZOP is being carried out remotely or face to face.