Project Economics

The economics of a peakshaving plant are usually based upon avoided pipeline demand charges along with a component of avoided capitol cost for some alternative pipeline solution. Pipeline capacity is commonly purchased for $1,000,000 to $4,000,000 per year for each 10,000 dekatherms/day of capacity. Small LNG peakshaving facilities can typically be constructed for a onetime capitol expenditure of $1,000,000 to $4,000,000. The annual carrying costs for these facilities are derived from (financing plus operations/maintenance). If a $2,000,000 plant has an annual carrying cost of $300,000 per year, and it can avoid $1,000,000 per year in demand charges from the pipeline, then, it is simple arithmetic to justify peakshaving.

The economics of baseload facility are somewhat different. The economics of baseload facilities are generally driven by cost of the baseload LNG vapor as compared to alternative fuels available. These facilities can be installed at industrial sites or a stand alone utility system. Many operators are unaware of the great potential at the industrial sites for volumes of sales. An industrial customer running three shifts at 100 dekatherms/hour can use 800,000 dekatherms/year of load. LNG can be produced for prices of $3.00 to $4.00/dekatherm. Transport can commonly cost between $.50 to $2.00 depending on travel time. The simplified cost per dekatherm of vaporized LNG is now determined by (fuel cost plus annual financing minus operations/maintenance plus annual profit) / annual load.

Northstar's Modular System Design is based on patent-pending reheating technology as well as extensive vaporizer replacement experience of the design team.

Northstar Industries, 126 Merrimack Street, Methuen, MA 01844. Tel: 978-975-5500; Fax: 978-975-9975.