Assessing the Economic Cost Benefit Analysis of Fractionating Raw Condensate into Specific Products by the Atuabo Gas Processing Plant, Ghana

Abstract

In Ghana, the condensate market is nascent, but however has the potential of accelerated growth, as the nation continues to discover more gas reserves in addition to the existing reserves.

The objective of the study was to analyze the condensate production by Ghana Gas and assess the economic viability of expanding the existing Atuabo Gas Processing Plant to facilitate the fractionation of raw condensate (which is currently being sold for limited industrial use) into specific products. The study is also geared towards identification of a means of optimizing the country’s gains from this product as well as recommending such optimizations for the benefit of the country.

A quantitative survey based on the Net Present Value (NPV) economic model (of a Condensate Fractionation Unit configuration that yields Pentane foamer, Rubber Industrial Solvent Oil, Natural Benzene, Vegetable oil extraction solvent) was used in analyzing the feasibility of condensate production optimization in Ghana. The economic analysis of the raw condensate sale, yielded a net present value (NPV) of US $ 143,080,318.03 whiles that of the fractionated products yielded a positive NPV of US $ 167,471,583.84. Comparing the two models indicated clearly that the fractionated products were more viable and lucrative. This value of approximately US $ 24,391,265.81 was more than the NPV of the economic model for the sale of raw condensate.

Furthermore, the sensitivity analysis which elaborates effects of changes in raw material, prices of product and rate of return due to errors of estimation of investment cost proved, there is a ninety percent (90%) probability that the economic model for the project will yield a maximum NPV at the end of the project. Implying that fractionating condensate would be lucrative for Ghana National Gas Company.

Therefore, the results from the Net Present Value (NPV) economic analysis revealed that Ghana Gas, Atuabo stands to gain immense benefits from fractionating condensate into Pentane foamer, Rubber Industrial Solvent Oil, Natural Benzene, Solvent for vegetable oil extraction. After performing the economic analysis with the net cash flow (NPV) model of both scenarios, it was also ascertained that should the proposed expansion project be carried out, measures should be taken to ensure constant or increased supply of natural gas (plant condensate) and also to reduce capital expenditure in order to enhance the project’s success since the afore mentioned are the most influential element.

Keywords: Economic Cost Benefit Analysis, Fractionating, Raw Condensate, Atuabo Gas Plant