Project economics

Methanol producers compete in the commodity chemical business. Thus, their ability to produce the product at a cost-competitive price is essential. Any new methanol plant must deal with this issue, and by and large, the operator must approach a project with the intent of being a low-cost producer. 

In this section both qualitative and quantitative data on the sensitivity to project economics are provided relative to major variables of natural gas cost, methanol price, capacity utilization, plant size, and plant cost. 

Cape Horn Methanol 750,000 Q)y meflianol complex at Cabo Negro, Chile. (Photograph courtesy of The M. W. Kelbgg Coraparty.) 

The raw material and eatalyst requirements typical of this 750,000 tpy methanol plant are as follows  

Natural 7.8 Gcal (LHV)/t Electrical power, 74 kWh/t Cooling water makeup, 8.16 m3/t Boiler feedwater makeup, 0.85 m3/t Catalyst cost, 1.60/t 

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Keywords exploration, appraisal, feasibility, development planning, production profile, production, abandonment, project economics, cash flow... 

Not surprisingly, costs are several times higher than conventional wells. Nevertheless, overall project economics may favour ERD over other development options. For example, BP developed the offshore part of the Wytch Farm Oilfield (which is located under Poole Harbour in Dorset, UK) from an onshore location. The wells targeted the reservoir at a vertical depth of 1,500 meters with a lateral displacement of over 8,000 meters (Fig. 3.20). The alternative was to build a drilling location on an artificial island in Poole Bay. ERD probably saved a considerable amount of money and advanced first oil by several years. 

The impact of inflation on project economics will be ignored in this section, but would be a feature of more advanced economics courses, and in practice would be included in a company s evaluation of a project. 

In order to test the economic performance of the project to variations in the base case estimates for the input data, sensitivity analysis is performed. This shows how robust the project is to variations in one or more parameters, and also highlights which of the inputs the project economics is more sensitive to. These inputs can then be addressed more specifically. For example if the project economics is highly sensitive to a delay in first production, then the scheduling should be more critically reviewed. 

In wet combustion, water is injected concurrently and alternately with air, extending the steam 2one and aiding heat transfer to the cmde oil reducing oil viscosity. This can decrease injected air produced oil ratio and improve project economics. 

Example 17 Effect of Fuel Cost on Project Economics. 9-38... 

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. 

In considering the economics of process alternatives, it is important to think about the total life cycle costs. There is an increasing interest in this concept in the environmental area, with a recognition of the need to incorporate waste treatment, waste disposal, regulatory compliance, potential liability for environmental damage, and other long term environmental costs into project economic evaluation. Similarly, we must consider life cycle safety costs. Some examples of factors which should be considered include ... 

Once values have been assigned for the costs and benefits of each proposed risk-reduction modification, a variety of economic evaluation techniques may be used to choose the most attractive option. These techniques include net present value, discounted cash flow rate of return and cost-benefit ratio analyses. Most companies have a preferred method for evaluating project economics, which can be used with little or no modification. Chapter 8 of... 

Product studies of most major chemicals giving the present projected economic characteristics. It gives the manufacturers production processes, prices, many data sheets, and cunent indicators. It is constantly being revised. 

Projected economics were also highly promising [41] capital and operating costs would be a fraction of those required by standard methods, e.g. scrubbing. Furthermore, no chemical reagents would be required and no waste stream produced. However, the high melting points of the alkali-metal sulfates (T > 512 °C) offered severe limitations to application, especially for use in power plants, where the flue gas typically is unavailable for treatment at temperatures below 400 °C. 

Project economics, feedstock availability, regulation, and product integration... 

The preceding listed sources provide information on current and often historical capital and operating costs that can be used in your current and projected economic evaluation. 

Fishman, A. M. A. I. Chem. E. Symposium Series No. 169, 73 (1977). Developments in Uranium enrichment, 43. The centar gas centrifuge enrichment project Economics and engineering considerations. 

The relative simplicity of the gasification system enables its operation to be within the technical expertise of most operators who are experienced with conventional boilers and furnaces, and results in favorable project economics. Its modular design allows a wide range of scale-up or scale-down possibilities, so the systems can vaiy in size from about one ton per hour of residue to 20 tons per hour or larger, with the size being limited only by biomass availability. 

The economics of PRO systems using brines and fresh water sources and current membranes are more favorable, with estimated power outputs as high as 200 watt/m. However, surface brines exist in deserts where there is limited fresh water, and brines that might be produced from salt domes pose a difficult effluent disposal problem. If PRO systems can be produced at an installed cost of 100/m2 of membrane, the projected economics are competitive with other power-generating techniques. This appears to be the only salinity gradient resource worthy of further study. 

Once the minimum theoretical energy requirements and applicable process options have been determined, a formal facilitated workshop follows to modify the process or facility to bring the design closer to the thermodynamic optimum within project economic constraints. 

The energy optimization VIP is most beneficial for processes where energy and related capital expense are a relatively large fraction of the total operating cost. The benefits result in reduced energy requirements and environmental emissions in balance with project economics. This VIP should be implemented in the feasibihty phase (FEL-2) when preliminary PFDs and heat and material balances are available. 

The conceptual phase The team then reviews the ideas against relevant project criteria such as potential impact on long-term project economics, impact on operations and maintenance costs, effect on the capital cost for the project, validity to the project scope of work, technical risks associated with implementation of the new concept, impact on project schedule, and cost required to implement the improvement. Each study has specific criteria against which proposed alterna-... 

At a site in Quebec, Canada, the technology met project economic objectives with cost of remediation totaling 75 per metric ton of treated material. The total cost for the project was 200,700. Costs are in Canadian dollars (D14835Q, p. 1). 

Based on this information (supplemented with data on substitute products and the projected economic significance of the chemical), the Agency will take one of the following courses of action ... 

However, project economics can be dramatically reduced by following some basic guidelines, phasing installation, separating "needs from "wants, and knowing design options. 

Further, future facilities deferral has an additional project economic advantage usually a tax advantage may be gained by installing equipment as an operating expense as opposed to initial capital expenditure. 

Many companies that do industrial research on catalysis choose not to make their own catalysts. Catalyst preparation and marketing is a specialty chemical, high technical service business. Manufacturers are under pressure to make their catalysts more active, more selective, and with a greater cost performance and lifetime than those of their competitors. Development of a new catalyst or process historically has taken many years (5-10) which is a disadvantage in project economics. The overall catalyst business is expanding and catalyst life is finite. The challenge is to make a cost-effective product with a sufficiently high rate of return on investment. 

Fast pyrolysis of biomass provides a method for the production of phenolics that has the potential to replace at least 50% or more of the phenol in phenol-formaldehyde thermosetting resins. The gel tests indicate that the P/N fractions from pine sawdust pyrolysis with paraformaldehyde have shorter gel times than commercial plywood resins such as Cascophen 313, even without prepolymer formation. A novolak formulation has been prepared using 1 1 by volume of phenol and P/N fraction and about half of the amount of formaldehyde that would be used than if phenol alone were employed. Very promising resols have also been made with a similar substitution of the P/N fraction for phenol. Wood testing and resin formulation development are ongoing activities. The projected economics suggest that additional research and development of this process are fully warranted. 

Several economic factors affect commercialization of mycoherbicides (54. 64). the ultimate consideration being the projected economic returns from the mycoherbicide. A pathogen that is prone to be unprofitable or unpredictable in this respect, whether due to small market size, cost of production and marketing, competition from other alternative controls, or efficacy, is unlikely to be developed or offered for sale by commercial enterprises. 

Should combine a solid background in management, project economics, and operations with a working knowledge of process engineering and project management. 

The validity check shows a construction duration of 10 months, one month longer than anticipated in the Initial Plan of Action in Chapter 5. Since an 18-month total project duration is important due to business considerations this delay could have a serious impact on the project economics and corrective action must be taken. 

Conceptual estimates are typically prepared during the advanced R D and early process design stages. They are normally used to build the preliminary project economics, prepare preliminary execution plans, and develop cost estimates for the preparation of a complete process design (Phase 1) and a definitive cost estimate. The Phase 0 design package, described in Chapter 6, contains all the information required for conceptual estimates. See Table 9.1 for an example of a conceptual estimate. 

These estimates are prepared when the basic process design is essentially complete and the scope of the offsite and waste treatment facilities has been established but not completely defined. Preliminary estimates are normally used to prepare firm project execution plans, to complete the project economics, and, frequently, for appropriation purposes. The Phase 1 design package, described in Chapter 6. contains the necessary information for the preparation of a preliminary estimate. In fact, a thorough Phase 0 package could also be used for this purpose. Appendix L illustrates a preliminary estimate. 

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