June 4, 2009 

United States Steel Corporation 

600 Grant Street 

Pittsburgh, PA 15219 

Attention: Mr. Alex Parou 

 Cap Ex Buyer 

Subject: USS Minntac Pelletizing Plant 

 NOx Reduction Project 

Reference: USS Specification UMO-0486-1 

Aker Technical Services Proposal A19904

 

Dear Mr. Parou, 

Aker Technical Services, a division of Aker Metals Inc., part of Aker Solutions, is pleased to provide 

this proposal to United States Steel in response to the subject USS specification. The concept 

envisioned by USS to accomplish the NOx reduction, as described in specification UMO-0486-1, 

involves the installation of an emission control system on each of the five (5) indurating lines. Aker 

Solutions, in conjunction with Fives North American and Metso Minerals, are proposing an alternate 

solution, specifically, achieving the reduction target by reducing the amount of NOx produced at the 

burners. 

Aker Solutions, Fives North American and Metso Minerals believe that application of Low NOx 

Burners to the kilns at Minntac is the most cost effective way to achieve the required reduction. The 

attached table shows a relative comparison of operating and capital costs for three NOx reduction 

processes. Each process was sized to remove 70% of the NOx (9,310 tons per year of NOx ) from 

the five kilns at USS Minntac. Low NOx Burners refers to the option proposed by Aker Solutions, 

Fives North American, and Metso Minerals to reduce NOx production during combustion. SCR refers 

to the use of Selective Catalytic Reduction to convert NOx to nitrogen and water vapor by reacting it 

with ammonia. The LoTOxTM option reacts ozone with the NOx to form the nitric acid precursor, N2O5. 

This compound is readily absorbed in water as nitric acid which then can be neutralized. The 

operating costs include an allowance for wastewater treatment. 

The Low NOx Burner capital costs were developed by Aker Solutions and can be considered budgetary. 

They are based on current labor rates and recent quotations for major equipment. The operating costs 

were calculated using typical long term unit costs for natural gas and power. Costs are calculated for five 

(5) kilns. All kilns were assumed to have identical emissions and heat input. 

The SCR capital and operating costs were calculated from the ‘EPA Air Pollutions Control Cost Manual’, 

Jan. 2002. Costs were updated to 2009 using ‘Chemical Engineering Plant Cost Index, May 2009’. 

The LoTOxTM costs were estimated using information from a BACT Cost Table produced for MN Steel 

Industries Air Quality Permit Application. 

The analysis shows that the Low NOx Burners would provide the most economical approach to reducing 

nitrous oxides at the USS Minntac facility. The LoTOxTM system was found to be the most expensive 

method for reducing nitrous oxides. 

Aker Technical Services, a division of Aker Metals Inc. © 2008 Aker Solutions

701 Technology Drive Canonsburg, PA 15317 

Tel +1 724 416 6900 www.akersolutions.com
 

The conclusion is consistent with other studies that combustion controls are typically the most cost 

effective. Post combustion methods are typically selected after options for combustion control have been 

implemented but are not able to meet the final emission limits. 

Some additional advantages and disadvantages are listed in the lower part of the attached table. Aker 

Solutions and our partners encourage a discussion of these and other issues before making a final 

selection. 

Aker Solutions sincerely appreciates this opportunity to be of service to U. S. Steel. We look forward 

to the possibility of renewing the relationship between our organizations. 

Any questions or comments you may have relative to this proposal can be referred to me at 724-416-

6838. 

Very truly yours, 

David G. Sweitzer 

Director – Business Development 

Aker Solutions 

dave.sweitzer@akersolutions.com

cc: Mr. Tom Robertson, Fives North American 
 - 1 - 

MINNTAC PELLETIZING PLANT 

NOx Reduction Project 

United States Steel Corporation 

Minnesota Ore Operations 

Mount Iron, Minnesota 

June 2009 

part of Aker
 

TABLE: NOx Reduction Process Cost 

Comparison for USS Minntac 

Variable/System 

Low Nox 

Burners SCR LoTOxTM Comment 

Capital Cost $34,500,000 $40,000,000 $68,000,000 

 

Operating Cost, Annual 

Maintenance 1,035,000 1,200,000 2,000,000 

Power 900,000 2,000,000 7,400,000 $0.05 per kw-hr 

Natural Gas 3,300,000 0 0 $7 per M BTU 

Oxygen 0 0 8,200,000 $50 per ton O2 

Ammonia 0 2,200,000 0 

$400 per ton 

NH3

Catalyst Replacement 1,300,000 

Wastewater Treatment 0 0 2,300,000 

Cost of capital 4,800,000 5,500,000 7,400,000 

5% interest, 15 

yr 

Total Annual Operating 10,035,000 12,200,000 27,300,000 

 

Cost per ton Nox Removed $1,100 $1,300 $2,900 

 

Advantages/Disadvantages 

Area Requirement 

Minimal, space for 

fan at grade near 

product end of kiln

Difficult to fit 

reactor before 

exhaust 

scrubber 

Difficult to fit 

reactor before 

exhaust scrubber 

Performance 

Nox reduction 

maintained 

throughout life of 

burners 

Nox reduction 

declines with 

catalyst age; 

pressure drop 

may increase 

due to plugging 

Nox reduction 

maintained 

through life of 

reactor 

Other Pollutants None 

Ammonia slip, 

additional 

sulfuric acid mist

Wastewater 

treatment of 

nitrogen 

compounds 

Other Hazards 

None, no new 

reactants or fuels 

Storage and 

handling of 

ammonia and 

waste catalyst 

Handling oxygen, 

ozone, 

wastewater, 

water treatment 

chemicals 
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Table of Contents 

June 2009 NOx Reduction Project Page 1 

 United States Steel Corporation 

Table of Contents 

PROJECT OVERVIEW................................................................................................................. Section 1 

PROCESS FUNCTIONAL DESCRIPTION................................................................................... Section 2 

PROCESS FLOW DIAGRAM ....................................................................................................... Section 3 

GENERAL ARRANGEMENT DRAWINGS................................................................................... Section 4 

CAPITAL COST ESTIMATE......................................................................................................... Section 5 

COMMERCIAL OFFER................................................................................................................. Section 6 

CLARIFICATIONS ........................................................................................................................ Section 7 
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 1 

June 2009 NOx Reduction Project Page 1 

 United States Steel Corporation 

Section 1 

PROJECT OVERVIEW 

Background

The U. S. Steel (USS) pelletizing plant known as Minntac is located in northern Minnesota. The plant, 

built by Allis-Chalmers (now part of Metso Minerals), uses the grate-kiln pelletizing process. There are 

three separate processing sections of the plant. Green pellets are dried and preheated on a traveling 

grate section and then discharged into a rotary kiln where they are fired at a high temperature. Hot fired 

pellets are dropped into a circular cooler from the discharge end of the kiln. A single large burner located 

at the discharge end of the kiln provides most of the heat input. At Minntac, the burner can fire natural 

gas, fuel oil, coal, and biomass, which comes from logging/sawmills. As part of a permit renewal 

application for the state of Minnesota, Minntac must decrease their NOx emissions by 70%. 

Design Concept

The concept envisioned by USS to accomplish the NOx reduction, as described in specification UMO0486-1, involves the installation of an emission control system on each of the five (5) indurating lines. 

Aker Solutions, in conjunction with Fives North American (FNAC) and Metso Minerals (Metso), are 

proposing an alternate solution, specifically, achieving the reduction target by reducing the amount of 

NOx produced at the burners. 

The design presented in this proposal will take hot combustion air from the last section of the cooler hood 

and premix it with natural gas in six mixer tubes arranged in a partial symmetrical pattern around the 

existing multifuel burner. The new premix mixer tubes will provide approximately 50% of the total fuel 

input using natural gas. The existing burner will provide the remaining fuel input using coal and biomass. 

The natural gas flow will be set in the new mixer tubes and the solid fuel feed rate to the existing burner 

will provide the final temperature control. The new equipment will control the total air-fuel ratio to 

minimize overall NOx production. 

The implementation approach envisioned in the USS specification involved a pilot scale installation to 

verify the effectiveness of the concept prior to full implementation. A pilot scale installation of a low NOx 

burner solution as proposed herein is not practical and therefore is not proposed. However, development 

engineering for the low NOx burner system does include bench scale laboratory work by FNAC to 

develop the burner system design. 

Since this is essentially a developmental engineering project, Aker Solutions / Metso / FNAC envision 

that following installation of the low NOx burner system on the first indurating line, a period of testing and 

optimization will ensue that will allow for further improvements in the design prior to its installation on the 

remaining four (4) indurating lines. 

For purposes of this proposal we have assumed that the initial installation will be on line #7. 
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 1 

June 2009 NOx Reduction Project Page 2 

 United States Steel Corporation 

Scope of Work and Execution Plan

Aker Solutions is proposing to enter into a contract with USS to assist USS with the complete 

development, design, installation, testing and optimization of the low NOx burner system as further 

described below. Aker Solutions will subcontract portions of the engineering to Metso and FNAC and will 

be responsible for coordinating the activities of Metso and FNAC. By contracting in this manner, USS will 

have a single point of contact and clear lines of accountability. 

The proposed project execution can be thought of as occurring in two phases based on the nature of the 

activities as follows: 

Phase 1 – Development Engineering

Aker Solutions will contract with FNAC to provide development engineering for the proposed low NOx 

burner system which would include: 

 A site visit to Minntac by FNAC personnel to better understand operating conditions and CEMS 

data 

 Bench scale laboratory work 

 Development of resulting system schematics 

Aker Solutions will contract with Metso to provide the following development engineering services: 

 A site visit to Minntac by two (2) Metso process personnel and two (2) Metso mechanical advisers 

 A process simulation entailing Metso’s standard heat and mass balance for the traveling grate 

system reflecting the current operating conditions of line #7 

 A process simulation entailing Metso’s standard heat and mass balance for the traveling grate 

system reflecting the anticipated operating conditions of line #7 after the addition of the low NOx 

burner system 

In conjunction with the development activities undertaken by FNAC and Metso, Aker Solutions will 

provide overall Process Engineering which will include: 

 Process flow diagram with material balance 

 Piping and instrumentation diagram 

 Process safety review 

 Process data sheets 

 Detailed process description 

Aker Solutions personnel will visit Minntac to meet with USS Engineering and Operations personnel to 

gather technical information necessary for the development of the construction engineering deliverables 

needed to install the low NOx burner system. 

Based on the results of the above, FNAC will provide a proposal to USS for the detail design and supply 

of the low NOx burner system. This offer will include: 

 Low NOx Lean Pre-Mixers (6) 

 Associated control valves and instrumentation 

 Control system for Low NOx Lean Pre-Mixers 
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 1 

June 2009 NOx Reduction Project Page 3 

 United States Steel Corporation 

Aker Solutions will refine the preliminary capital cost estimate and implementation schedule. 

Phase II – Construction Engineering, Installation, Testing and Optimization

Following USS’ review of the Development Engineering and authorization to proceed, the project will 

progress into Phase II which includes: 

Aker Solutions will contract with Metso to provide the following engineering services: 

 Outline drawings of the demolition required to the existing firing hood area to perform 

modifications 

 Layout drawings of the modified firing hood to reflect the new burner configuration 

 Detailed fabrication drawings of the necessary modifications to the firing hood 

 Refractory outline drawings reflecting the new modifications 

Aker Solutions will proceed with development of the construction engineering deliverables needed to 

install the low NOx burner system. The anticipated deliverables include: 

Mechanical Engineering

 General Arrangement Drawings 

 Demolition Drawings or Sketches 

 Ductwork Design Drawings 

 Ductwork Stress Analysis 

 Specifications and requisitions: 

- Combustion air fan with turning gear 

- Ductwork fabrication 

- Dampers and expansions joints 

- Refractory 

Piping Engineering

 Material, fabrication, testing and cleaning specifications 

 Piping line index 

 Routing diagrams 

 Orthographic or isometric drawings 

Electrical Engineering

 Specification and requisitions: 

- Motor Control Center (1 medium voltage and 1 low voltage starter) 

 Device location drawings / physical drawings 

 Conduit and cable schedule 

Instrumentation and Control System Engineering

 Instrument index 

 Functional Description 

 Logic Diagrams as required 

 Configuration Diagram 

 Specifications and requisitions for field instruments 

 Installation and wiring diagrams 
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 1 

June 2009 NOx Reduction Project Page 4 

 United States Steel Corporation 

Civil / Structural Engineering

 Foundation Drawing 

- Combustion air fan 

 Structural Drawings 

- Ductwork support 

- Platforms and access 

- Valve stand support 

 Various installation specifications 

Aker Solutions propose to provide purchasing services as agents for USS to assist USS in procurement 

of all equipment (including the FNAC low NOx burner system), fabrications, and construction services 

needed to construct the facility. In this manner, all warranties and other obligations of the suppliers will 

flow directly to USS and USS will have direct payment obligation to the suppliers. USS can be involved 

in the procurement process to whatever extent desired. Typically, we would expect USS to be involved in 

developing or approving bidders lists, and reviewing / approving quotations analyses prior to purchase 

order placement. Aker Solutions will work with USS to develop an appropriate set of procurement 

documents and procedures for the project. 

Aker Solutions will work with USS to develop a construction contracting plan that takes maximum 

advantage of the capabilities of the local contractors and fosters as much competition in bidding as 

possible. The construction contracts will include supply of all bulk materials. 

Aker Solutions assumes that one contractor, or perhaps a third party, will serve as the site manager and 

therefore have not included construction management services. Aker Solutions will provide technical 

personnel to assist the contractors. 

Aker Solutions will provide overall project management and coordination, including scheduling, cost 

control, and development of project procedures. 

Aker Solutions, FNAC, and Metso will provide personnel to participate in the testing and optimization 

phase following installation and start-up of the new facilities. 

The following diagram depicts the proposed contractual arrangement. 
MINNTAC LOW NOx PROJECT

A19904-00

Contractors Aker Solutions

FNAC Metso

•Low NOx Technology•Burner Supply•Burner Controls / Logic•Combustion Schematic•Start-up / Operational Assistance

•Process Evaluation•Firing Hood Modification Design

•Development EngineerinBurner Installation•Construction Engineering•Technical Specifications Requisitions for Aux. Equ(non-FNAC)•Procurement Services•Overall Project Managem

USS MINNTAC

•All Demolition and New Construction•Supply of Bulk Materials•Site Management
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 2 

June 2009 NOx Reduction Project Page 1 

 United States Steel Corporation 

Section 2 

PROCESS FUNCTIONAL DESCRIPTION 

Reduction of NOx emissions at the source can be accomplished by reducing the local temperature, 

reducing the local oxygen level, and minimizing the residence time at temperature. Fives North American 

Corporation (FNAC) has over 400 installations worldwide, including a dozen rotary kilns that use Low 

NOx LE technology in a variety of industries such as petrochemical, consumer products, and light and 

heavy industrial. 

Aker Solutions and FNAC are jointly working on the application of Low NOx LE technology to the iron ore 

pelletizing process. In the current iron ore indurating processes, hot recuperated gases from the cooling 

section are recirculated to the firing section. The hot recuperated gas is heated from ~1600°F to ~2400°F 

with a conventional burner or burners designed for high fuel efficiency. However, the optimum conditions 

for the process and for fuel efficiency result in high NOx generation. Low NOx LE technology employs 

lower peak flame temperature, lower oxygen content near the flame, and fuel staging and rapid mixing for 

short residence times. Current LE technology utilizes a premix of natural gas and combustion air. 

Minntac needs to retain the operational flexibility to use natural gas, fuel oil, and solid fuels. In addition, 

the available space in the firing hood of the kiln does not allow for the installation of a complete LE burner 

with sufficient capacity for full production. Therefore, the concept of the project is to blend LE technology 

from FNAC with the existing multi-fuel combustion system. 

Six (6) lean premix mixer tubes will be located in a partial symmetrical pattern around the existing 

Aecometric burner. The mixer tubes will be angled inward toward the flame from the Aecometric burner. 

The mixer tubes will be sized to provide approximately 50% of the total required fuel input with the 

remainder coming from the existing burner. Four mixer tubes will be capable of producing 30 x 106

BTU/hr. Space limitations will restrict the two remaining mixer tubes to 19 x 106

 BTU/hr. The inlet end of 

the larger mixer will have a 30” diameter combustion air connection that will transition down to 16” 

diameter at the discharge end at the kiln firing hood. The smaller mixer will have a 24” diameter 

combustion air inlet that will transition down to 12” diameter at the discharge end at the kiln firing hood. A 

precisely controlled fuel-air ratio in the mixer tubes creates a uniform, thermo-chemical environment 

where flame temperature is tightly controlled (<2700°F) and NOx emissions are minimized. The 

combustion products from these mixing elements combine with the raw fuel from the burner, buffering the 

reaction with the highly preheated cooler air, again controlling flame temperature and minimizing NOx 

production from the primary burner. Rapid mixing and high velocity through the mixer tubes, ~270 feet 

per second, results in short residence time. 

The combustion air component of the premix will be ~700°F to minimize the effect on fuel consumption. 

The hot combustion air will be recovered from the cooler vent stack. No dust collection will be required 

since the cooler vent gas is a clean air stream. A bleed-in air damper will be used to maintain the desired 

temperature. Both combustion air and natural gas flows will be measured and controlled on each mixer 

tube. Downstream of the combustion air fan, the ductwork will split into two branches, one down each 

side of the kiln. Each branch will then split into three individual ducts to service two groups (east and 

west) with three mixers each. No pilot burners will be used so the kiln will start up using the existing 

burner. When the temperature in the kiln is above the auto-ignition point for natural gas, the mixer tubes 

can be brought on line and the existing burner cut back. 

Refer to the process flow diagram for the LE technology concept in Section 3. . 
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 2 

June 2009 NOx Reduction Project Page 2 

 United States Steel Corporation 

The following figures show the approximate location for the premix mixer tubes at the discharge of the 

kiln. To fit the bottom mixer tubes in, it will be necessary to modify the firing hood by notching the center 

section of the sloping roof and making the center roof area horizontal (Figures 2 and 5). 

FIGURE 1

Minntac Low NOx Lean Premix Concept

Tentative locations for six mixers

Ø 234.00in.

Existing four-fuel burner

Ø 28.00in.
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 2 

June 2009 NOx Reduction Project Page 3 

 United States Steel Corporation 

FIGURE 2

Minntac Low NOx Lean Premix Concept

Side Section Sketch Showing Proposed Locations of Front

of Firing Hood, Existing Burner, and Lower New Mixers

Existing Burner

New Mixer
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 2 

June 2009 NOx Reduction Project Page 4 

 United States Steel Corporation 

FIGURE 3

Minntac Low NOx Lean Premix Concept

Side Section Sketch Showing Proposed Locations of Front

of Firing Hood, Existing Burner, And New Inner Side

Mixers

New Mixer Existing Burner

New Mixer Existing Burner
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 2 

June 2009 NOx Reduction Project Page 5 

 United States Steel Corporation 

FIGURE 4

Minntac Low NOx Lean Premix Concept

Side Section Sketch Showing Proposed Locations of Front of

Firing Hood, Existing Burner, And New Outer Side Mixers

New Mixer Existing Burner

 
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 2 

June 2009 NOx Reduction Project Page 6 

 United States Steel Corporation 

 

 FIGURE 5

Minntac Low NOx Lean Premix Concept

Front View (from Kiln) Showing Possible Modifications

of Firing Hood

Ø 234.00in.

Existing four-fuel burner

63.00in.
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 2 

June 2009 NOx Reduction Project Page 7 

 United States Steel Corporation 

To protect the end of the mixer body, a ceramic insert at the outlet end of the mixer tube may be 

necessary as shown below in Figure 6. The high exit velocity of the premix results in a flame liftoff 

region between 2 1⁄2 to 5 feet from the end of the mixer tube before the flame begins. 

 FIGURE 6

Minntac Low NOx Lean Premix Concept

Typical Mixer Construction and Flame Geometry

Max. 168 Flame Length

2 x d < l < 4 x d 

Flame Liftoff region

2 x d

Flame Diameter

d = 15.64

140

Ceramic Insert

Burner Wall

Mixer Body
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 3 

June 2009 NOx Reduction Project Page 1 

 United States Steel Corporation 

Section 3 

PROCESS FLOW DIAGRAM (PFD) 

The following preliminary Process Flow Diagram is included with this proposal for reference. 

 Revision

R-05-01 Low NOx Mixer Tubes A 

This diagram identifies the process flow streams for the Low NOx Mixer Tubes. 

Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 4 

June 2009 NOx Reduction Project Page 1 

 United States Steel Corporation 

Section 4 

GENERAL ARRANGEMENT DRAWINGS 

The following preliminary General Arrangement Drawings are included with this proposal for reference. 

 Revision

G-00-201 General Arrangement - Plan A 

G-00-202 General Arrangement - Section A 

 

These drawings depict the overall concept proposed by Aker Solutions and show Aker Solutions 

preliminary layout. 

Site visits will be required to better define the project scope and further develop these arrangements. 


Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 5 

June 2009 NOx Reduction Project Page 1 

 United States Steel Corporation 

Section 5 

CAPITAL COST ESTIMATE 

The following preliminary Capital Cost Estimate is included for reference. This estimate has been 

developed by Aker Solutions based on preliminary information and should be considered no better than 

+/- 25%. 

This estimate is for the first Low NOx Burner system installation on line #7. The system development 

costs and a significant portion of the construction engineering produced for this initial installation will be 

reused for installation of the remaining systems. 

This document contains a preliminary Capital Cost Estimate intended for use by the recipient in relation 

to a prospective project. The preliminary Capital Cost Estimate is based upon limited and incomplete 

information, industry factors and experience with similar facilities. This preliminary Capital Cost Estimate 

is not an offer to perform work or a guarantee that work can be performed for the amount of the 

preliminary Capital Cost Estimate or within the period of time specified in relation to this estimate. This 

preliminary Capital Cost Estimate cannot be accepted by the recipient as the basis of any contract or 

purchase order without written verification and incorporation into a proposal by Aker Technical Services. 

This document is confidential and proprietary to Aker Technical Services and may not be used or 

disclosed to any third party without the express written consent of Aker Technical Services. 
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 5 

June 2009 NOx Reduction Project Page 2 

 United States Steel Corporation 

Line #7 Cost Summary 

Item 

No. Description

Material 

Cost Labor Cost

Installation 

Manhours Total Cost

1.1 Concrete $40,724 $74,141 869 $114,865 2.7% of TDC

1.2 Structural Steel $349,050 $237,028 2,531 $586,078 13.8% of TDC

2 Mechanical $1,762,622 $675,152 7,203 $2,437,774 57.4% of TDC

3 Electrical $247,311 $610,203 6,559 $857,514 20.2% of TDC

4.1 Piping $15,111 $169,335 1,880 $184,446 4.3% of TDC

4.2 Piping Insulation $6,072 $30,426 325 $36,498 0.9% of TDC

5 Instrumentation $26,500 $3,908 42 $30,408 0.7% of TDC

$2,447,390 $1,800,192 19,408 $4,247,582 100.0% of TDC

(TDM) (TDL) (TDMH) (TDC)

$1,071,936 59.5% of TDL

$5,319,518 72.8% of TIC

$97,896 4.0% of TDM

$1,000,000 13.7% of TIC

Fives North American Engineering $102,000 1.4% of TIC

Fives North American Field Costs (Estimated) $60,000 0.8% of TIC

Metso Engineering $93,000 1.3% of TIC

$637,137 15.0% of TDC

$1,990,033 27.2% of TIC

$7,309,551 172.1% of TDC

Freight

Aker Solutions Engineering and Project Mngmn't

Contingency

Total Non-Field Costs

Percentages

(IFC)

(TFC)

Total Direct Field Cost

Indirect Field Costs

Total Field Costs

Total Low NOx Burner System Costs (TIC)
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 5 

June 2009 NOx Reduction Project Page 3 

 United States Steel Corporation 

Field Indirect Cost Breakdown 

Code Description Indirect Cost 

13 Small Tools & Safety ($2.00 / mnhr) $38,816 

15 Scaffolding Rental @5% $90,010 

16 Misc Equipment Rental @8% $144,015 

17 Large Equipment Rental $225,000 

18 

Scaffolding Support Craft (crew for 3 

months) $260,000 

19 Startup & Commissioning Spares $8,813 

20 Startup & Commissioning Supervision $35,252 

21 Contractor Overhead @8% $144,015 

22 Contractor Profit @7% $126,013 

Construction Indirect Total $1,071,936 

 

 

 Fives North American Field Costs (Testing) 30 days 

 $2,000 cost/day 

 Total Fives NA Field Cost $60,000 

Mechanical Equipment Detail 

2 Mechanical Qty Unit Equip Cost 

2.1 Firing Hood Modifications 1 Tons $4,016 

2.2 

Low NOx Combustion 

System 1 Each $1,150,000 

2.3 

Combustion Air Blower 

(42701) w/ inlet damper & 

motor 1 Each $179,000 

2.4 Ductwork 53.6 Tons $217,735 

2.5 Slide Plates 15 Lot $3,600 

2.6 Expansion Joints 4 Lot $11,200 

2.7 Dampers 2 Lot $32,600 

2.8 Damper Operators 2 Lot $8,000 

2.9 Access Doors 2 Lot $1,800 

2.10 Refractory & Anchors 1530 FT3 $50,818 

2.11 Thermal Insulation 9086 FT2 $103,852 

2.12 Firing Hood Demolition 1 Tons $0 

 Subtotal $1,762,622 
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 6 

June 2009 NOx Reduction Project Page 1 

 United States Steel Corporation 

Section 6 

COMMERCIAL OFFER 

Compensation Basis

Since this is essentially a developmental engineering project, Aker Solutions proposes to perform the 

Scope of Work described in this proposal on a reimbursable basis. Perhaps at the completion of 

Phase I development engineering, when the project requirements are better known, Aker Solutions 

would be open to discussing changing this approach based on our mutual understanding of the 

project risks. 

Aker Solutions’ standard reimbursable rates for all Aker Solutions’ personnel for 2009 are as 

indicated on the attached Professional Services Rate Schedule (Exhibit “A”). These rates are valid 

through the end of 2009. All personnel have been divided into seven (7) categories for exempt 

personnel and four (4) categories for non-exempt personnel, with the appropriate straight time 

charging rate indicated by category. These rates include all wages, fringe benefits, payroll taxes, 

overhead, and fee. 

In addition to the Professional Services Rates, USS will be invoiced for billable expenses such as the 

direct project costs for printing, reproduction, CAD and software costs, personal computer usage, 

telephone, fax, and courier/mail (“Incidentals”). These costs shall be reimbursed by USS at an allinclusive flat rate per hour expended. Aker Solutions’ standard reimbursement rate for incidentals for 

2009 is also indicated on the attached Professional Services Rate Schedule (Exhibit “A”). 

If utilized, overtime will be charged in accordance with the overtime status of each specific Aker 

Solutions employee. Straight Time Rates will be invoiced for those personnel paid straight time for 

overtime (i.e. exempt personnel). Overtime Rates will be invoiced at 1.25 times the indicated Straight 

Time Rate for those personnel paid premium time for overtime (i.e. non-exempt personnel). 

Overtime will only be authorized for Aker Solutions’ personnel with USS’s prior approval. 

The Professional Services Rates do not include any taxes, duties, tariffs or fees of any kind, except 

United States federal, state and local income taxes. Any applicable taxes or fees over and above 

those indicated will be borne directly by USS. 

All outside services (third-party services) provided by Aker Solutions in performance of the Scope of 

Work will be provided at cost plus a 5% mark-up on the direct cost. 

The engineering provided by FNAC and Metso will attract this mark-up as this work will be 

subcontracted through Aker Solutions. The equipment, fabrications, and construction services 

purchased by Aker Solutions as agents for USS will not attract this mark-up as the cost of this 

material will not flow through Aker Solutions. 

All travel and living costs incurred by Aker Solutions’ personnel in performance of the Scope of Work 

will be reimbursable at cost. 
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 6 

June 2009 NOx Reduction Project Page 2 

 United States Steel Corporation 

Estimated Costs

The Estimated Cost of the services to be performed by Aker Solutions / FNAC / Metso, as defined in 

this proposal, are included in the preliminary Capital Cost Estimate included herein. 

Aker Solutions will not proceed with any Services that would result in exceeding the authorized 

Estimated Cost without prior written authorization from USS. 

Invoicing and Payment

Upon contract award, Aker Solutions shall issue an invoice for the projected value of the reimbursable 

services for the first month or portion thereof. 

Subsequently, Aker Solutions will submit an invoice on or about the first day of each month for the 

mutually agreed upon projected value of the reimbursable services to be provided by Aker Solutions in 

that month. Each invoice will include an adjustment (debit or credit) for the actual value of services 

provided in the prior month versus the projected value for the prior month. 

Invoices for Reimbursable Services will include a breakdown of actual charges for the various 

reimbursable rates and other appropriate documentation, including reasonable back-up for travel and 

living charges. 

Reimbursable services will include amounts invoiced by FNAC and Metso, including down payments as 

are typical for equipment suppliers. 

All progress payments are due and payable net 21 calendar days from date of issue. Payment shall be 

by wire transfer. No retention shall be withheld from Aker Solutions’ invoices. 

Contract Terms and Conditions

This proposal is based on the terms and conditions of the existing Blanket Order (PO 00000456) between 

Aker Solutions and USS, which has been in effect for several years. 

Intellectual Property

Fives North American Combustion, Inc., owns and remains the owner of all intellectual property rights 

and know-how associated with the Low NOx Combustion technology contained in this proposal, including 

those aspects that have been developed specifically for this proposal, as well as of all the technical 

documents, graphics, plans or drawings, etc., provided. 

Validity

This proposal is valid for 30 days, after which time it is subject to review and confirmation by Aker 

Solutions. 
Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 7 

June 2009 NOx Reduction Project Page 1 

 United States Steel Corporation 

Section 7 

CLARIFICATIONS 

1. USS to provide access to site. 

2. USS to provide access to existing drawings. 

3. USS to provide current plant operating data in order to produce a process simulation reflecting 

 current conditions. 

4. USS to confirm No.7 kiln as the selected kiln for modifications. 

5. USS to provide all required utilities (Air, Water, Gas) assumed to be with-in 100 feet of the kiln 

 discharge. 

6. It is assumed that the existing electrical room, for Kiln No.7, has adequate space to house new 

 electrical gear. 

7. No modification to the parallel flow duct is anticipated at this time.