Posted 23 August 2012 - 09:17 PM
I have spent a large part of my career doing FEED/Basic Engineering. I like to break it down this way:
Front-End Loading #1 (FEL1)
Also known as Conceptual Engineering / Scoping Study / Opportunity Phase
This is where you figure out what the project looks like at a high level (probably block flow diagram, overall material balance, overall economics), and get a rough idea (±50%) of the capital and operating costs, and figure out if the project makes economic sense. At the end of this, engineering on the project is less than 1% complete.
Front-End Loading #2 (FEL2)
This is sometimes called the Design Basis phase, where you do things like Technology Selection and develop PFDs / material and energy balances, size equipment, etc. You should be able to get a ±30% cost estimate after this phase. Some people call this is the Basic Design, or Basic Engineering phase. At the end of this phase, engineering is between 4-8% complete, depending on how much detail you get into.
Front-End Loading #3 (FEL3)
This is sometimes called the Engineering Specification / Define / Basic Engineering or FEED (front-end engineering design) phase. This is where you get into the details of the process design, develop P&IDs, line lists, detailed equipment specifications, instrument definition, Usually projects start developing 3D models during this phase. You should be able to get a ±20% cost estimate after this phase, depending on how much of the cost risk is in construction execution. At the end of this phase, engineering is between 12-20% complete, again depending on how much detail you do before saying the project is ready for "detailed design". The decision on how much engineering you do in FEL3 depends very much on your execution strategy afterwards (i.e. reimbursible, lump sum or something in-between) and also how much involvement the owner intends on having in the detailed design.
Most companies wait until this phase is finished to make a "final" yes/no decision on going forward, because you have only spent about 2% of the total installed cost but have a very good idea if the project should be built.