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Unformatted text preview: Production costs at the LNG and regasification plant will run approximately $2.00 and $0.13 per MM Btu respectively. To keep the necessary rates, 22 wells over a 15 year period will be drilled in Kamchatka; this comes to $0.06 per MM Btu. The costs associated with piping gas from the well-head to the plant and then shipping to Japan are also relatively minor, only $0.64 and $0.53 per MM Btu respectively. Bringing the total production cost to $3.36 per MM Btu. Expected gas production rates average 135 million MM Btu per year, and at an average price of $7 per MM Btu, all investment money will be returned by year five. A yearly ROI of 14% is expected, with a final cash position of $6 billion at the end of 15 years. Assuming an inflation rate of 4%, the net present worth of this project is $3.5 billion dollars after this time period....
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This note was uploaded on 08/31/2011 for the course CHE 4273 taught by Professor Staff during the Spring '10 term at Oklahoma State.
- Spring '10
- Chemical Engineering