We are conducting an analysis looking at the impact of operating an LNG facility that gets paid $2 per MBtu of natural gas converted to LNG (they don’t take ownership of the natural gas, but get a $2/MBtu tolling or conversion fee for turning the gas into liquids and putting it on a ship). We are already accounting for the O&M expenses associated with the project – let’s say it is $0.5/MBtu, is the approach to capture the remaining impact of operations to take the $2/MBtu less the $0.5 already being modeled to get a margin of $1.5 and that is put into IMPLAN? What about other on-going costs that would include debt service and taxes, should these also be subtracted out of the $2/MBtu fee? If so, then, in the end, isn’t this the equal of just entering the profit margin into IMPLAN? Finally, when we finish subtracting out the costs from the $2/MBtu revenue, what industry should this be entered into? If we are left with only profit (or profit plus taxes and perhaps debt service), is it still appropriate to enter this into the corresponding processing industry? Thx
Please sign in to leave a comment.