Hi Satish,
You are correct. The value that was substituted into the term 'R' in the equation had an extra corrosion allowance added on to it. In PV Elite 2010 (not released at the time of this post) the horizontal vessel analysis will be per ASME VIII-2. Per Division 2, R will be the corroded mean radius of the shell.
Also in Division 2, the Circumferential stress in the shell without a ring sigma 6, invloves a k factor which is 0.1 for welded construction. This effectively lowers this particular stress 10 times.
Hopefully this helps.
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Scott MayeuxCADWorx & Analysis Solutions
Intergraph Process, Power, & Marine