Issue 161-M

95 / 222

مجلة النفط والتعاون العربي
161 العدد - 2017 أربعونالمجلد الثالث و ال
2016 أوابك العلمية لعام� ص لبحوث العلمية الفائزة بجائزة�عدد خا
88
78
Table (18)
Base Case Major Parameters of Two Re-refining Plants
Plant Process CapacityMil L/y
Capital
Cost $
Million
Used
Oil $/L
Base
Oil
$/ton
Oil
Price
$/b
IRR
%*
NPV**
K$
Small Clay 20 6 0.27 700 98 27 3172
Large Hydrogen 50 45 0.27 610 85 32 117377
* Internal rate of returns on Investment ** Net Positive Value of cash flow (15% discounted)
L= liter
Source: 1 &
Exall/9781466551497
However, the model as it is needs some adjustments to separate the impact of
base oil prices from those of crude oil prices but it remains a useful tool for initial
analysis and could be adjusted further to suit the situation at hand. Many scenarios
can be run for the same process or for different processes to make meaningful
comparison for decision making.
There are major parameters that affect the economics of re-refining projects but
some have bigger impact than others, which necessitate a sensitivity analysis to
set the priorities of caring for these parameters.
Distillation/Clay Treatment Plant Economics:
The discount rate that makes the net positive value equals to zero is the internal
rate of return that makes the project over the considered period breaks even.
Obviously the investors want a higher rate of return and a higher number for the
net positive value. In fact some investors not only seek a higher internal rate of
return but also target a value for the net cash flow.
In the case of the small plant of distillation and clay treatment the economics is
most sensitive to the price of base stock. Only a 6% decline of base oil prices
sends the cash flow to zero while 11% increase of used oil cost is the second
parameter with respect to sensitivity. Other parameters (capacity and capital cost)
are not as sensitive. The results are shown in Table (19). In the same table current
conditions are used to generate economics for 20 and 30 thousand cubic meter
plants. Base stock price is current (April 2016) and capital cost adjusted by 10%
for the Middle East location. Used oil cost is $23 a barrel as discussed in the next
chapter.