A two-level procedure for heat-exchanger network synthesis problems, which is related to structural optimization, is carried out by a simulated-annealing procedure. The main control parameters, that is, the initial annealing temperature, the temperature length, and the temperature-decreasing scheme, are extensively studied on the well-known 10SP1 problem, and their values are used for solving a 5SP1 problem with forbidden matches and a larger scale problem, the 20SP1. In all cases, the structural search is initialized with the network involving only utilities. For each generated network, the operating conditions (temperatures and split rates) are optimized by an NLP procedure to minimize the sum of investment and operating costs. Particular attention is given to the size reduction of the NLP problem. The proposed procedure leads to a reduction by a factor of 3 of the problem size in terms of number of variables and constraints. This slave problem is solved by an SQP procedure from the IMSL Library.