A feasibility study of flare gas utilization through a small-scale LNG development in South Sumatra, Indonesia

Abstract

This study focused on assessing the economic feasibility of Small-Scale LNG (SSLNG) development from a flare gas in South Sumatra, Indonesia. The study measured profitability using three financial indicators: internal rate of return (IRR), net present value (NPV), and payback period (PP). The study also used sensitivity analysis to find selected variables that are strongly correlated with the economic aspects of SSLNG production. The variables consist of (1) Average flare gas production; (2) Flare gas price; (3) LNG selling price; (4) CAPEX; and (5) OPEX. The study also used those variables to find the optimum result with scenario analysis. The results show that the SSLNG development from a flare gas is economically feasible if three variables: LNG selling price, CAPEX, and flare gas price follow the optimum scenario.