Cost

Capital expenditure or capital expense (capex or CAPEX) is the money a company spends to
buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. It is
considered a capital expenditure when the asset is newly purchased or when money is used
towards extending the useful life of an existing asset. Capital expenditures contrast with
operating expenses (OPEX), which are ongoing expenses that are inherent to the operation of
the asset. Below are the specification cost for every unit and capacity that we will use in the
determination of the project expenditure.
CAPEX
Grade Service USD/lbm
Well Carbon Steel CS CO2<10% 1
Well Chrome CO2<35% 2.5
Well Duplex Chrome CO>35% 5
Pipeline Carbon Steel CS Onshore <20% CO2 mole 1
Pipeline Carbon Steel CS Offshore <20% CO2 mole 4
Pipeline High CO2 Onshore >20% CO2 mole 6
Pipeline High CO2 Offshore >20% CO2 mole 24

Capacity /
Service
Grade unit
Not
Basic separation system All Onshore
applicable
Compression system All Onshore 500 MMScfd
CO2 removal unit Normal Outlet max CO2 15% 500 MMScfd
CO2 removal unit Advanced Outlet max CO2 10% 500 MMScfd
CO2 removal unit Premium Outlet Max CO2 2% 500 MMScfd

Rig rate
(USD)
Drilling 200k/day (assume 30 days/well)

OPEX
USD mil/unit per Year
Well Maintenance 0.2
Basic separation system Maintenance 20
Compression system Maintenance 25
CO2 removal unit Maintenance 40
Pipeline Maintenance 5

Tariff guideline Min Max

20% Gas &
Pipeline cost
Condensate price
 50% Gas &
Processing cost
Condensate price
Capex
The tubing size of the wells are determined by using Prosper Software. For C02 > 35%, as seen
in well AA and AD, it requires to use Duplex Chrome grade. The cost are calculated as such:

Well

Reservoir Angsa Lower Angsa Upper Angsa Kurus Angsa EW

No. of well 7 7 7 7
Carbon Steel Carbon Steel Duplex
Grade Duplex Chrome CS CS Chrome
USD/lbm 5 1 1 5
ID, in 5.295 5.295 5.295 5.295
lbs/ft 7.78 7.78 7.78 7.78
Depth, ft 3000 2900 3150 2750

Price, USD 816,900.00 157,934.00 171,549.00 748,825.00

Total, USD 1,895,208.00

Pipelines
Pipeline size have been calculated to optimize the production and portrays it by applying Gap
Software. The pipelines were chosen from offshore service because it is located on the sea bed.
The requirement for the pipeline grade is Carbon Steel CS since we considered to have a carbon
dioxide removal before the separator and the cost are calculated as below:

Pipeline Kong
Grade Carbon Steel CS
USD/lbm 4
ID, in 35.376
lbs/ft 119.03
Length, km 285
Length, ft 935039.4
Price, USD 445190959.1

Total, USD 445,190,959.13

Surface Facilities
The facilities including Basic Separation Unit, Compression Unit and CO2 removal Unit are
needed. Two compressors needed to compress gas of 880 MMscf and CO2 removal Unit are
used to remove CO2 production. This is due to customer requirement of only accept CO2 with
3% mole.

Facilities
Item Cost
Basic Seperation
System 5,000,000.00
CO2 removal unit
(Premium) 30000000

Compression System 15,000,000.00

Total, USD 50,000,000.00

Drilling
Drilling cost for 30 days and 35 wells calculated as part of CAPEX.

Drilling Kong
No. of well 28
Time, days/well 30
Rig rate, USD/day 200000

Total, USD 168,000,000.00

Facilites 50,000,000.00

Wells 1,895,208.00

Pipeline 445,190,959.13

Drilling 168,000,000.00

Total CAPEX, USD 665,086,167.13

Opex
Throughout 25 years of ongoing project, operational cost including maintenance had to be
considered. This cost are significant for the revenue and profit for the entire project. The
importance machines that had to be maintain includes, the well, basic separation system,
compression units, CO2 removal unit and pipelines. Hence, the cost below.
OPEX
BASIC SEPARATION
SYSTEM
UNIT - 2
PRICE USD
20,000,000.00
TOTAL PRICE USD
40,000,000.00

WELL
UNIT - 28
PRICE USD
200,000.00
TOTAL PRICE USD
5,600,000.00

CO2 REMOVAL UNIT

UNIT - 1
PRICE USD
40,000,000.00
TOTAL PRICE USD
40,000,000.00

CO2 REMOVAL UNIT

UNIT - 1
PRICE USD
40,000,000.00
TOTAL PRICE USD
40,000,000.00

Total, USD/year 90,600,000.00

Revenue
Revenue is the income that a business has from its normal business activities, for our case is
the production of daily gas will be our revenue. Revenue may refer to business income in
general, or it may refer to the amount, in a monetary unit, earned during a period of time. The
revenue period from 01/01/2019 to 01/01/2044 are 9131 days in total. In order to make it more
practical, yearly assumption were made by convert days to year for 25 years. Then, we can
estimate the revenue obtain from the operation.

Cumulative
Gas
Gas Gas Price, Revenue, Cumulative Revenue ,
Year Production,
Production, USD/MMscf USD USD
MMscf/Year
MMscf
0 0 0 4000 0 0
1 117238000 321200 4000 1284800000 1,284,800,000.00
2 234476000 321200 4000 1284800000 2,569,600,000.00
3 351714000 321200 4000 1284800000 3,854,400,000.00
4 468952000 321200 4000 1284800000 5,139,200,000.00
5 586190000 321200 4000 1284800000 6,424,000,000.00
6 703428000 321200 4000 1284800000 7,708,800,000.00
7 820666000 321200 4000 1284800000 8,993,600,000.00
8 937904000 321200 4000 1284800000 10,278,400,000.00
9 1055142000 321200 4000 1284800000 11,563,200,000.00
10 1172380000 321200 4000 1284800000 12,848,000,000.00
11 1289618000 321200 4000 1284800000 14,132,800,000.00
12 1406856000 321200 4000 1284800000 15,417,600,000.00
13 1524094000 321200 4000 1284800000 16,702,400,000.00
14 1641332000 321200 4000 1284800000 17,987,200,000.00
15 1758570000 321200 4000 1284800000 19,272,000,000.00
16 1875808000 321200 4000 1284800000 20,556,800,000.00
17 1993046000 321200 4000 1284800000 21,841,600,000.00
18 2110284000 321200 4000 1284800000 23,126,400,000.00
19 2227522000 321200 4000 1284800000 24,411,200,000.00
20 2344760000 321200 4000 1284800000 25,696,000,000.00
21 2461998000 321200 4000 1284800000 26,980,800,000.00
22 2579236000 321200 4000 1284800000 28,265,600,000.00
23 2696474000 321200 4000 1284800000 29,550,400,000.00
24 2813712000 321200 4000 1284800000 30,835,200,000.00
25 2930950000 321200 4000 1284800000 32,120,000,000.00
 Net
Ye CAPEX Yearly Processing Net Cash
OPEX (USD) Pipeline Tarrif Revenue,
ar (USD) Revenue , USD Tarrif Flow, USD
USD
-
-
0 665,086,16 89,200,000.0 754,286,167.
- - - 754286167.1
7.13 0 13

1 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

2 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

3 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

4 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

5 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

6 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

7 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

8 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

9 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

10 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

11 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

12 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

13 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

14 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

15 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

16 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

17 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00
18 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.
0 00 00 0 00 00

19 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

20 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

21 0 90,600,000.0 1,284,800,000. 256,960,000. 294,840,000. 294,840,000.

642,400,000.00
0 00 00 00 00

22 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

23 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

24 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

25 0 90,600,000.0 1,284,800,000. 256,960,000. 642,400,000.0 294,840,000. 294,840,000.

0 00 00 0 00 00

6,616,713,83 NPV
To 2.87
665,086,16 2,354,200,00 32,120,000,00 6,424,000,00 16,060,000,00
tal
7.13 0.00 0.00 0.00 0.00
3,401,172,44
8.72

2,500,000,000.00
Cash Flow
2,000,000,000.00

1,500,000,000.00

1,000,000,000.00

500,000,000.00

-
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

(500,000,000.00)

(1,000,000,000.00)

From the graph above, it is clear that the Payback Period is two and a half years