Plant costs financing

Following development of the study direction, the evaluation describes the efforts of obtaining and validating process information, and then discusses equipment specifications and a cost estimate of the feasibility or budget type i.e., with plant costs factored from major material. Finally, project economics and financing complete the evaluation. 

Within Chapter 6.6.2 the main parameters to be considered for the design of a high-pressure extraction plant have been discussed in detail. In brief mass-transfer and thermodynamic conditions with their related parameters play the most important roles for an optimized process. In this Chapter the influence of such selected parameters, design features, and the kinds of project financing are investigated with a view to production costs and return on investment (R.O.I.). 

Their final comment was that In the USA, the relatively low raw materials and utilities costs, together with the methods of plant finance, make the trade-off between these factors opt in favour of the single-pressure process for plants built up to 1979 . 

The scope of the economic evaluation includes estimation of capital cost figures for a nitric add plant producing 280 tonnes/day of a 60% product. Following this capital cost estimation the total annual operating costs are estimated, both variable and fixed components being considered. Also considered is the cost of providing finance for the initial capital outlay at 25% interest per annum. 

Today, much larger installations (50-200 mW) are planned in Australia, China, and the American Southwest. This year, construction will start on the world s first commercial plant in Australia. The 2 mi diameter canopy of this 50 mW power station at Tapio will be 2.4 m (8 ft) tall at the perimeter and will rise to 15 m (50 ft) at the center near the tower. The tower will be 79 m (260 ft) in diameter and 488 m (1,600 ft) in height. It is anticipated that this power plant will meet the electricity needs of 100,000 homes. The government-financed plant is expected to cost 75 million. 

The larger question of what happens beyond the first few plants cannot be answered with any more certainty. Even the basic question of plant ownership offers a dilemma. Regulated utility financing would bring lower fuel costs to that utility. However, it means attempting to operate a complex facility without suitable corporate experience in refining and marketing. 

The American Natural Resources Co. had difficulty raising money for the mammoth project which would have produced 125 million cubic feet per day of pipeline quality high-Btu gas. Officials of the company had said that normal debt financing isn t possible because lenders aren t willing to put up the money for what is still an untried process in the United States. Yet outside financing is needed because the partners in the project can only afford to put up 25% of the cost of the plant themselves."... 

A small plant, which can be designed and built in a year, will normally be financed out of annual revenue a large plant, taking several years to build and costing perhaps more than the profit generated in those years, has to be considered quite differently, and special techniques have to be used to determine its profitability. 

Over the last few years, the high cost of installations and of the money needed to finance them was not conducive to the building of new plants on any large scale in industrialized countries. But as demand trends have been moving upwards lately, petrochemicals have at long last returned to profitability. 

---