To anticipate the production increase from some new wells which recently drilled, some scenarios have been developed with regards to Gathering Center capacity.
The current GC cannot accomodate some issues regarding the associated gas in production fluid.
- There are 4 scenarios to be evaluated in terms of Cash Flow Analysis to determine more benefit to the stake holders.
- The associated gas in Gathering Center is analyzed whether burned (additional Flare Stack Package) or own used (additional Fuel Gas Package).
Development of the outcomes
The Force Field Analysis is developed as per below:
Minimum Acceptable requirements
The criteria of economic selection are:
- The Highest Net Cash Flow and NPV.
- Life Time is predicted for 11 years.
- NPV calculated at 12% Discount.
Analyze and compare the alternatives
Based on the alternatives as given, we come up with the preliminary economic calculation as per below table:
Develop preferred alternative
Scenario: Upgrade Gathering Center + Fuel Gas Package – Placed Into Service on 1 Oct 2011, is this worth Doing?
Estimated revenue generated as calculated Net Cash Flow is US$ 1,450.8 million for 11 years operation. NPV @ 12% discount is equal to US$933.4 million.
The following summaries the information considered before it made as Go or No Go Decision:
Const is mitigated under Risk Register.
Monitor and Evaluation (Post Mortem)
After the Authorization for Expenditure (AFE) is approved, the following Success Planning is monitored and shall be achieved.
- Spills – zero.
- Industrial Accident / LTI – zero.
- Cost performance – +/- 10% of budget.
- Schedule performance – +/- 10% of milestone dates.
The following action items are a must for achieving the Success Metrics above:
- Good team work & coordination – meet on regular basis, good cross functional participation and good team commitment.
- Follow the project management practices.
- Follow HES procedures and approved standards & codes.
- Utilize VIP’s & Best Practices.
- Involve the right resources (e.g., contract development).
- Peters, Max S & Timmerhaus, Klaus D. (1991), Plant Design and Economics for Chemical Engineers 4th Edition, Singapore: McGraw-Hill, Inc.
- Sullivan, William G., Wicks, Elin M. & Koelling, C. Patrick (1942), Engineering Economy 15th Edition, Singapore: Prentice Hall, Inc.