Economics of Alaska North Slope gas utilization options Page: 13 of 253
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Baseline Economic Variables
Baseline assumptions for the key economic variables were:
(a) The EIA 1995 Reference Oil Price (AE095) case was used for the baseline economics. This case
projects a future world oil price with a predicted real oil price increase of about 2.4% per year.
(b) The hydrocarbon composition and heating value of the ANS gas provided as feedstock to LNG or
GTL options is assumed to remain consistent over the project life at 1150 BTU/SCF.
(c) Final product sales price is a direct function of world oil prices, adjusted upwards for their special
value and desirability as a fuel. The adjustment for LNG is a 10% Asian bonus and a $5/BBL
premium for GTL liquids.
(d) Annual operating costs of each gas project are assumed to be 5% of total capital investments for the
LNG project and $6/BBL for the GTL project.
(e) Operation efficiencies relative to the conversion of feedstock gas to salable product is assumed to
be 91% for LNG and 60% for GTL.
(f) No additional investments are required to sell gas from PBU because of the extensive gas-handling
facilities already in place at PBU for separation and reinjection of 7.5 BCFPD. The estimated capital
investment required to develop PTU is $900 million (1995$).
(g) Excluding PTU development costs, the total investment requirements for the LNG project are
adjusted upward from the $14 billion (1995$) publicly announced in 1994 by Yukon Pacific for its
proposed 14 MMTPA LNG project, to $16 billion (1995$) for the 17 MMTPA LNG project required
to accommodate concurrent gas sales from PBU and PTU at 2.49 BFCPD. For the GTL option to
handle the same gas volume as the LNG option, the plant investment is $12 billion (1995$), based
on $40,000 per daily barrel of liquid (DBL) of output capacity for a large scale (300 MBPD) state-
of-the-art GTL operation in the Prudhoe Bay field area.
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Thomas, C. P.; Doughty, T. C.; Hackworth, J. H.; North, W. B. & Robertson, E. P. Economics of Alaska North Slope gas utilization options, report, August 1, 1996; United States. (https://digital.library.unt.edu/ark:/67531/metadc678645/m1/13/: accessed March 19, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.