A novel sensor network design (SND) algorithm is developed for maximizing process efficiency while minimizing sensor network cost for a nonlinear dynamic process with an estimator-based control system. The multi objective optimization problem is solved following a lexicographic approach where the process efficiency is maximized first followed by minimization of the sensor network cost. The partial net present value, which combines the capital cost due to the sensor network and the operating cost due to deviation from the optimal efficiency, is proposed as an alternative objective. The unscented Kalman filter is considered as the nonlinear estimator. The large-scale combinatorial optimization problem is solved using a genetic algorithm. The developed SND algorithm is applied to an acid gas removal (AGR) unit as part of an integrated gasification combined cycle (IGCC) power plant with CO2 capture. Due to the computational expense, a reduced order nonlinear model of the AGR process is identified and parallel computation is performed during implementation.