ABSTRACT
An off-shore gas field recently discovered was investigated for exploitation and production by the "Sunshine" Company. The study indicated that the proved gas reserve in this field is estimated to be 50 x 109 m3• The capital investment needed for this project is found to be $459 x 106 and the annual operating costs (cash expenses) will be $25 x 106 • The reserve will run for 15 years with an annual production of 1.205 x 106 T.E.O. of natural gas plus 81,660 tons of liquid condensate. The former sells for $80/T.E.O. and the latter sells for $ 120/ton. (1 TEO = 1 ton equivalent oil.)
You, as a chemical engineer working for this company, have been asked by the management to consider the economic feasibility of this project by calculating the following:
1. The total production cost of 1 TEO. (assume 1 ton of condensate 1.5 TEO).
