The goal of this work is to help synthesize a sensor network to detect and diagnose faults and to monitor conditions of the key equipment items. Faults or events that lead to loss in productivity occur over time. These faults, if not detected and mitigated at an early stage, can lead to severe loss in productivity, efficiency, and equipment damage, and can be a safety hazard. The desired algorithm for sensor network design would provide information about the number, type and location of sensors that should be deployed for fault diagnosis and condition monitoring of a plant. In this work, the focus was on the integrated gasification combined cycle (IGCC) power plant where the faults at the equipment level and the plant level are considered separately. At the plant level, the objective is to observe whether a fault has occurred or not and identify the specific fault. For component-level faults, the objective is to obtain quantitative information about the extent of a particular fault. For the model-based sensor network design, high-fidelity process model of the IGCC plant is the key requirement.