This paper introduces a new implementation using virtual engineering approaches in support of the design and development of a compact pilot plant. Developing a compact pilot plant is a costly and high-risk approach. Risk and resource investments can be optimized by using commercially based virtual engineering, integrated simulation, and virtual prototyping environments in the design and development of a compact pilot plant. This paper identifies both the users of the virtual engineering environment as well as where in the system lifecycle it can be implemented. The environment will use and extend existing multiphysics models and simulation of products and characteristics through the development of system-level models and an investigation of virtual prototypes of component elements. The second level involves knowledge sharing across phases of the lifecycle of products, including all contributors and stakeholders in the virtual environment.