Economic Comparison of Liquefied Natural Gas Floating Production Storage and Offloading Plant (LNG FPSO) with the Proposed Brass LNG

Abstract

Abstract With the ongoing gas revolution in Nigeria, it will be appropriate that our government invest wisely by going for the best economical venture. The objective of this study is to provide a perspective on portfolio diversification, investment and resource development. The economic analysis was carried out deterministically using economic indices like Net Present Value, Internal Rate of Return, Present Value Rate and others. Probabilistic model was also incorporated to assess the impact of the uncertainties in the input parameters using Monte Carlo Simulation through the use of Crystal ball software. The key uncertainties parameters were the same for both projects though their level of impacts differs. The deterministic model results obtained was Net Present Value of $2.3 billion at a discount value of 15% and Internal Rate of Return at 32.68% for LNG FPSO while Brass LNG has NPV of $607,640,260.85, at a discount value of 15% and internal Rate of Return at 16.28%. These clearly showed that LNG FPSO is profitable for offshore environment within the range of 25 nautical miles with water depth of 20 meters and above.