Additional inventory cost ¼ 14 Â 564, 845 þ 162, 798
ð
Þ À452, 756
ð
Þ
ð
Þ
¼ 3:848 MM $:
6. Working capital – taken as 5.0 % of the capital cost = 5.835 MM $.
Total associated costs = 19.262 MM $.
Construction Cost and Payment
End of year
À2
À1
0
Constr. payments MM $
11.922
47.686
59.608
The construction costs will be paid out of equity up to the limit of the equity. The
remainder will be paid by a loan at 8.0 % interest. Initial equity is 60 % of capital +
associated costs = 0.6 (119.216 + 19.262) = 83.087 MM $.
The loan to complete the construction schedule of payments is raised during year
zero and interest on this is 2.89 MM $. This is capitalized but will be paid out of an
increased equity.
Net investment:
MM $
Capital cost of plant
119.216
Associated costs
19.262
Construction loan interest
2.89
Net investment
141.368
Operating and Maintenance Costs
Operating cost for year 1 is made up as follows:
MM $
Operating labor
=1.49
Utilities
=8.32
Chemicals, catalyst, running royalties
=1.20
Total
=11.01
Operating costs escalate at a rate of 3.0 % per year. The yearly operating cost
schedule is given in Table 18.
The maintenance cost for year 1 is taken as 4 % of capital cost which is 0:04
Â119:216 ¼ 4:76 MM . Maintenance costs are escalated at a rate of 1.0 % per year.
The annual schedule for this item is also given in Table 18.
Loan Repayments and Interest
The total loan for the project is 55.390 MM $ and is repaid over 10 years at an
interest rate of 8.0 % per annum discounted annually.
Petroleum Refinery Planning and Economics
735