ISSN: 2639-7536

Research Article Petroleum and Chemical Industry International

Economic Analysis of Flare gas recovery system in a Refinery plant in Nigeria
Ifeanyichukwu Edeh* and Yusuf Muizz Olawale

Department of Chemical Engineering, University of Port *Corresponding Author

Harcourt, Nigeria Ifeanyichukwu Edeh, Department of Chemical Engineering, University of
Port Harcourt, Nigeria.

Submitted: 22 Apr 2022; Accepted: 25 Apr 2023; Published: 30 Apr 2023

Citation: Edeh, I., Olawale, Y. M. (2023). Economic Analysis of Flare gas recovery system in a Refinery plant in Nigeria. Petro
Chem Indus Intern, 6(2), 142-150.

Abstract
The emission of greenhouse gases like methane and carbondioxide during gas flaring in the oil and gas refineries is of
immense concern in mitigation of climate change. As a result of this, flare gas recovery system is encouraged through
various policies to be installed in oil and gas refineries. The current work is on the economics analysis of flare gas re-
covery system in a refinery plant in Nigeria to determine the prospect and feasibility of installation and operation. The
simulation of the system was carried out using Unisim Design 471 software, and the economic analysis conducted man-
ually. The result of the cost estimation and profitability analysis show total purchased equipment cost ($52,327,866),
total capital investment ($549,088,158), annual total production costs ($204,681,762), profit after tax ($2,007,068,515),
rate of return (365.50 %) and payback time (3.28 months). Based on the result, the flare gas recovery system has a great
prospect and feasibility, its installation and operation could help to minimize the greenhouse gases emission, energy
consumption, create employment and increase the revenue generation of the refinery.

Keywords: Flare gas, recovery system, Refinery, economics, profitability

Introduction The international dent caused by flaring in Nigeria is signifi-

Refinery gas flaring negative impact on environment extends to
precipitate colossal health consequences. The greenhouse house
effect stems from natural balance disruption caused by flaring
emission gases. Examples of such gases include carbon dioxide,
carbon monoxide, methane, water vapour, Nitrogen oxide fami-
ly, soot and so on [1,2]. They are capable of causing health issues
like cancer, lung damage, deformities in children, genetic muta-
tion, asthma, bronchitis, pneumonia, neurological and reproduc-
tive disorder as well as environmental challenges which stall ag-
ricultural productivity, aquatic and wild lives [NOSDRA]. The
environmental consequences result from climate change, acid
rain and other forms of air pollution [3].
According to data released by National oil spill detection and re-
sponse agency [NOSDRA], an arm of Nigeria Federal ministry
of environment, through its satellite tracker, 1.8 billion Standard
cubic feet [scf] per day of gas was flared in nine years, one that
should attract about $3.6 billion in penalty, little of which was
paid. The flared gas is valued at $6.3 billion and could generate
179.9 thousand GWh of electricity which represents a milestone
in energy needs of Nigeria. The volume generated about 95.5
million tonnes of carbon dioxide emissions. In 2020, natural gas
valued at $1.24 billion was burned by oil companies, one which
could generate the annual electricity use of 804 million Nigerian
citizens, according to the tracker [3].
Petro Chem Indus Intern, 2023
cantly monumental. Nigeria is ranked seventh in the global oil
flaring index released in April 28, 2021 by world bank report
tagged “Global gas Flaring Trackers” putting the country in hot
spot. The six leading countries are Russia, Iraq, Iran, the United
States, Algeria and Venezuela.
Forbes report of July 2021 showed that scope 1 and 2 emis-
sions associated with refining operations account for around 5
% of the global total oil and gas emissions. The emissions re-
sult mainly from energy intensive processes of distillation and
chemical conversion that are integral to refining along with the
production of grey hydrogen which is the hydrogen produced
from natural gas.
Refining profit margin is dipping and might not rebound soon
due to large numbers of new refineries springing up in the mid-
dle east and Asia, emergence of biofuel and manufacture of elec-
tric vehicle. Wood Mackenzie’s global composite profit margin
averages US$1.8/bbl in 2021 but less than half of the US$4.25/
bbl five-year average.
Nigeria, like other countries of the world, enacted a number of
laws and regulations aimed at controlling discharges into the en-
vironment. They are in different forms and dimensions. One of
such regulations is the National environmental protection [pol-
Volume 6 | Issue 2 | 142
lution abatement in industries and facilities generating wastes]
regulations,1991. The Nigerian regulations, made under section
37 of the Federal Environmental Protection Agency Act, provide
for control of discharge by industries in Nigeria. It reads “no
industry or facility shall release hazardous or toxic substances
into the air, water or land of Nigeria’s ecosystems beyond lim-
its approved by the Federal Environmental Protection Agency”.
Discharge, including, solid, gaseous and liquid waste from any
industry or facility shall be analyzed and reported to the near-
est office of the agency. The provision falls short of placing the
analyses report in public domain so as to reflect compliance, ac-
countability and transparency not only to the host communities
but citizenry in general [4].
In Petroleum Industry act 2021, section 104 subsection 1-4, pro-
vides that a licensee, lessee, or marginal field operator can only
flare or vent natural gas in the case of emergency if and only it
is an acceptable safety practice established under this regulation.
Section 107 of the act has it that a licensee or lessee can flare
where it is required for facility start-up or testing gas equipment
or plant and fine as prescribed by the commission will be paid to
the government by the defaulting oil companies in the same way
as royalties if such exercise fails. Such fines are deployed for
environmental remediation and relief to host communities. The
fines are prescribed by the Flare gas [Prevention of Waste and
Pollution] Regulations [4]. In Section 106 subsection 1 it is made
mandatory for licensee or lessee to install a metering equipment
in any facility where natural gas may be flared or vented before
petroleum production can commence and non-compliance at-
tracts fine prescribed by regulatory Authority. Another section of
the Act, section 107 stipulates that licensee or lessee producing
natural gas shall, within 12 months of commencement of opera-
tion submit a natural gas flare elimination and monetization plan
to the concerned Authority in accordance with established reg-
ulations of the Act. The Nigerian Midstream and Downstream
Petroleum Regulatory Authority is the one issuing permit to gas
firms and regulates gas flaring in the sector [5].
It is obvious from the above regulations that serious efforts are
being made to discourage gas flaring and reduce it to the barest
minimum. In all of the regulations, all the attentions are on all
the oil producing companies. None of regulations is specifically
directed at the refineries known for about 5 % emission pool as
obtainable in United states of America where specific regula-
tory provisions and projections in clear terms are impeccably
detailed. Other producing companies that do not fall in the cate-
gory of oil and gas companies or refineries need to be adequately
captured in specific terms as they are major contributors to gas
flaring. It is imperative that such loophole be addressed in the
future amendment to the Act. The Act provisions are excellent-
ly drafted but implementation and enforcement are equally im-
portant in order to drive it to achieve the intended results. Also,
milestones recorded with the Act need to be documented so that
its progress can be effectively monitored and vacuum yet to be
filled by the Act can be clearly spelt out and required effort/re-
view can be intensified in this regard.
Furthermore, some researchers have investigated the feasibil-
Petro Chem Indus Intern, 2023
ity of flare gas recovery systems through economic analysis.
Among such researchers include, and they carried out a tech-
nical and economic assessment of flare gas recovery in a giant
gas refinery. They assessed the feasibility of using liquefaction,
LPG production and a three-stage compression unit in recovery
flare gas. The result of the economic analysis showe that the rate
of return (ROR) obtained for liquefaction and LPG production
units, respectively were greater than 200 %. In the same vain,
conducted a technical, economic, and environmental assessment
of flare gas recovery system while considering FGRS methods
including pressurizing and injecting flare gas into oil wells, pro-
ducing electricity and injecting surplus flare gas into oil wells,
and producing power via a combined heat and power system
(CHP) and an internal combustion engine. The result show that
the best method of recovering flare gas under the conditions in-
vestigated was by pressurizing and injection based on economic
reason of having an internal investment rate of 171 % and a pay-
back period of 1.02 years. Similarly, Carried out a thermo-eco-
nomical assessment of producing liquefied natural gas natural
gas liquids from flare gases using an auxiliary natural gas flow
rate, and poly refrigerant intergrated cycle operation [PRICO].
The result of the economic analysis gave a payback period of
approximately 1.6 years [6-8].
In our previous work, we investigated the recovery and purity of
some important constituents of flare gas like methane, hydrogen,
propane, ethane and debutanized products via the simulation of
the flare gas recovery system using Unisim Design 471 software.
The current work is geared towards evaluating the prospect, vi-
ability and feasibility of installing and operating a flare gas re-
covery system in a refiner. This was carried out by determining
the total purchased equipment, total capital investment, annual
total production costs, profit after tax, rate of return, and pay-
back time.
Materials and Methods
The details of the simulation of the flare gas recovery system,
and material and energy balances have been reported in our pre-
vious work [9].
Process Description
The flare gas streams from different sections of the refinery
represented by Fluid Catalytic Cracking Unit [FCCU] flare gas
from a header was routed either to Flare system or Flare gas
recovery system.
The flare gas streams from the header of the Fluid Catalytic
Cracking Unit [FCCU] is passed to either flare system or flare
gas recovery system [FGRS]. The flare gas at 193.1 kPa and
36.67 oC routing to FGRS was passed through a Let-down valve
where the pressure of the gas was reduced to almost vacuum of
about 6.895 kPa [see Figure 1]. After which It entered the Liquid
ring Compressor at vacuum suction pressure and was subjected
to compression to a discharge pressure of about 1620 kPa. The
compressor was modelled using a centrifugal hybrid with adi-
abatic efficiency of 50 %. Hot and compressed flared gas enter
the trim cooler E-100 where its temperature drops to 57.22 oC
at 1620 kPa, before passing it to a three-phase separator, SEP 1
Volume 6 | Issue 2 | 143
where the partially condensed gas stream is flashed into vapour,
liquid and water. The vapour fraction is cooled further to a cryo-
genic condition of -42.78 oC and 1615 kPa in another cooler
E-101 before being passed to another phase of flashing in a sec-
ond three-phase separator SEP 2 where the remaining water and
liquid in the condensed gas stream are knocked off. The liquid
and water from both separators are manifolded into MIX-100
and MIX-101, respectively for further cooling where necessary.
The combined liquid stream are used as feed and enters the low-
er feed tray [15th stage] to the Demethanizer. The cooled gas
stream at -42.78 oC and 1615 kPa is divided into two fractions
at ratio 4:1 in a splitter TEE-100. The bulk gas fraction, COL1
STREAM 1 goes for further cryogenic cooling in multi-ex-
changer LNG-100 in the same way as smaller gas fraction COL
1 STREAM 2 does to a much lesser extent. COL 1 STREAM 1
Figure 1: Simulated Flare Gas Recovery System for the Refinery under study
The Demethanized liquid is removed from the bottom of the col-
umn at 56.32 oC and 1650 kPa. The liquid are used as the feed
to the Deethanizer entering through 13th stage after being pres-
surised by the pump, P-100 to 2600 kPa and heated to 54.72 oC.
The Deethanizer is a 30-tray distillation column which operates
at 2590 kPa, 1.21 oC at the top and 2700 kPa, 114.5 oC at the
bottom. Ethane is discharged at 88.8 % purity as a vapour from
the top of the column while Deethanized product removed from
the bottom of the tower is the feed stream to the Depropanizer
after pressure step-down to 1750 kPa in a let-down valve LDV2.
The Deethanized product is separated into propane and Depro-
panized product in a distillation tower, Depropanizer which is
also a thirty-tray column operating at 1700 kPa, 50.22 oC and
1750 kPa, 118.6 oC at the top and bottom end respectively. Pro-
pane of 98% purity is obtained at the top of the tower in form
of vapour while Depropanized product obtained as liquid is the
feed to the Debutanizer after pressure reduction to 550kPa in
a let-down valve, LDV3. It enters the fractionator at the 14th
stage. Depropanized liquid at 68.55 oC enters the 25-stage
Debutanizer through the 12th stage where it fractionated into
Petro Chem Indus Intern, 2023
exits LNG-100 at -153 oC and 1600 kPa to be used as reflux to
the 30-tray Demethanizer which is a reboiled absorber and it en-
ters through the top stage [tray]. COL 1 STREAM 2 on the other
hand at -95 oC and 1600 kPa enters the column at the 2nd stage
to function as the top feed. The reboiled absorber operates at
1600 kPa and 1650 kPa at the top and bottom stage, respectively
at corresponding temperature of -153 oC and 25 oC. Hydrogen,
being the lightest component in the feed stream, is discharged
as vapour from the top of the column to increase the purity of
methane, which is the primary product of interest, is withdrawn
as side product in vapour form from the 4th stage. Both methane
and hydrogen overheads are passed through the multi-exchanger
LNG-100 for cold heat recovery to the both reflux and top feed
stream. Purity of the methane and hydrogen produced are 91 %
and 48.6 %, respectively.
butane/isobutane vapour at the top end and Debutanized liquid
at the bottom end. The column operates at 500 kPa, 45.55 oC at
the top and 600 kPa, 104.7 oC at the bottom end. The Debuta-
nized liquid is the gasoline fraction in crude stream [9].
Cost Estimation
Determining the Purchased Equipment Cost
This was carried out using Equation 1.
Ce = a +bSn ( 1)
Where; Ce is the purchased equipment cost on a Gulf Coast ba-
sis, Jan.2007 [CE index [CEPCI] = 509.7, NF refinery inflation
index = 2059.1) [10]; a, b = constant [see, [10]; S is the size
parameter, and n is the characteristic exponent for the equip-
ment. The prices are for Carbon steel except where it is stated
otherwise in the table.
In a situation where the size parameter falls outside the valid
range, Equation 2 known as sixth-tenth rule was used to correct
the limitation of Equation 1
Volume 6 | Issue 2 | 144
 𝑆𝑆2 𝑛𝑛 The LNG-100 was assumedThe to be a U-typewas
LNG-100 of shell
assumed and tube
to beheat exchanger.
a U-type of shellTheandcost
tub
𝐶𝐶2 = 𝐶𝐶1 ( 𝑛𝑛) ( 2)
𝑆𝑆𝑆𝑆21 of the LNG-100 was calculated( 2) using Equation 1, and the size parameter was the area
𝐶𝐶2 = 𝐶𝐶1 ( )( 2) of the LNG-100 ( 2) was calculated using Equation 1, and the s
𝑆𝑆1
of the heat exchanger (A), tion obtained using Eqaution 6. obtained
𝐶𝐶 is the cost of the equipment with Capacity 𝑆𝑆2 andof𝐶𝐶1, 1theis heat
and the
the exchanger
size
cost of the (A),
parameter was the area of using
equipment the heatEqaution
exchanger6.
ment with Capacity 2 𝑆𝑆2 and
𝑛𝑛𝑆𝑆 𝑛𝑛 𝐶𝐶 1 is the cost of the equipment (A), obtained using Eqaution 6.
apacity 𝑆𝑆2 and 𝐶𝐶1𝐶𝐶is 2 isthethe 2 cost
𝑆𝑆cost 2ofof thetheequipment
equipment with Capacity 𝑆𝑆2 and 𝐶𝐶1 is the cost of the equipment
𝐶𝐶22==𝐶𝐶Capacity
𝐶𝐶with 1 𝐶𝐶
(1 ( ) ) 𝑆𝑆1 . n is typically 0.6. ( 2) 𝑈𝑈𝐴𝐴 ( 2) ( 2)
ally 0.6. with Capacity𝑆𝑆 1 𝑆𝑆1 𝑆𝑆 . n is typically 0.6. 𝐴𝐴 = 𝑈𝑈𝐴𝐴 (6)
1
𝑈𝑈 𝐴𝐴 =
𝐶𝐶2Cis isEquation
thecost costofofthe the equipment with Capacity 𝑆𝑆2 Sand and1 C iscost
the cost 𝑈𝑈
etetermine
2 the
Equation 1compressor
1with was
equipment
was used
used
with to
toring determine
Capacity
determine the2 𝐶𝐶the
cost
is1 the
of
cost
the of theequipment
of the
liquid liquid
ring ring compressor
compressor (LRC), (LRC),
cost of
with 2
the
𝐶𝐶Capacity
ofis the
the liquid
the cost
cost
𝑆𝑆
equipment 2
ringof
andof the
the
𝐶𝐶 1 liquid
isequipment
the
Capacity (LRC),
cost S . of
n compressor
with
is the Capacity
typically equipment0.6. (LRC),
𝑆𝑆 2 and 𝐶𝐶 1 is the
Where cost
U = oof the equipmentkJ/oC-h and2 Uo = 3960kJ/h m2
-133892.198046242
with Capacity 𝑆𝑆1 . n is typically 0.6. 1
Where UA = -133892.198046242 Where kJ/ C-h
A
and U = 3960kJ/hkJ/ m oC-hC and U = 3960kJ
demethanizer
demethanizer
2 was used bottom bottom
to scaleliquid liquid
thepump pump (P-100). (P-100). The Equation The Equation 2oCwas used2U was = used
toA scale-133892.198046242
up tothe scale up the
d00).
pump
0.6.
The Equation
with (P-100).
Capacity
Equation1 1was Thewas 𝑆𝑆 Equation
. n is 2
typically
up
was used
0.6.
1used to determine the cost of the liquid ring to scale up the
Equation size used
parameter For to determine
of the the cost ofbottom the liquid ring compressor (LRC),
om liquid pump size
compressor (P-100).
parameter
(LRC), the ofTrim thedemethanizer
demethanizer coolers
demethanizer
4.For
bottom Demethanizer
liquid bottom
pump
liquid pump
liquid
[P-100].
(P-100).
pump For the Trim
(P-100).
Demethanizer Forcoolers
the Trim coolers
thanizerdemethanizer
bottom liquid bottom pump
liquid (P-100).
pump (P-100). The the Trim
Equation coolers
2 was used to 4.
scale Demethanizer
up the
mine Equation
ube the cost
shell The
and tube
E-100, of
1 was
E-100,
Equation the
heat 2E-101,
was
E-101, liquid
usedand
exchanger, and
used toring
to determine
E-104
scale
the
E-104 compressor
size using
up the
using
a thea cost
U-tube
size (LRC),
parameter
U-tube of the
shell and
of the
shell liquid
tube heat
The
and ring compressor
exchanger,
demethanizer
tube
the
was
heat exchanger, (LRC),
size
estimated separately as a pressure vessel,
theis the
sizesize parameter used for
using
he exhanger a
size U-tube
demethanizer
parameter
(m 2
parameter
) which shell the and
ofbottom
was was tube
liquid
demethanizer pumpheat
the heat transfer
determined
bottom
using Theexchanger,
(P-100).
liquid
area For
pump
demethanizer the
of the exhanger the
Trim
(P-100). size cool-
For
was the
2 tray
Trim
(m estimated
) which and
coolers
was reboiler.
separately
determined The asshell
usinga mass
pressure vessel, tray and reboiler. Theve
mp (P-100).
demethanizer
ers E-100,
E-100,
The Equation
E-101,E-101,
parameter bottom
and was and the
E-104
2liquid
E-104 was
2 heat
using using pump
used toshell
a U-tube
transfer
a U-tube
(P-100).
scale
area shell
and of
up The
and
tube
the
the tube
heat
Equation 2The
heat calculating
exhanger
exchanger, (m 2 demethanizer
was usedwas
size the cost
the) which
to scale wasupestimated
ofdetermined
a pressure thevessel.
using separately
The cost of theas a was
tray pressure
sfer areaexchanger,of theEquation exhanger
the size (m ) which
3. parameter was was shell
the heat determined
mass transferis2liquid
the
area using
sizeof theparameterobtainedused usingfor calculating
Equation thepressure
1. For the costusedofvessel,
a for
pressure vessel.
Equations 4 The
izer bottom
size parameter
parameter
exhanger
liquid
Equation was the pump
[m2] which
of
heatthe (P-100).
3. transfer demethanizer
area For
was determined of thethe bottom
exhanger Trim
using Equation (m coolers
) which pump
3. was determined
shellwere
(P-100).
and 5 using
mass
For is the
the Trim sizecoolers
parameter
used to calculate the shell mas before using Equation
calculating the cos
ng a U-tube Equationshell
E-100, 3. = 𝑈𝑈𝑈𝑈∆𝑇𝑇
E-101,
𝑄𝑄 and and tube
𝑎𝑎𝑎𝑎𝑎𝑎E-104
𝐴𝐴 = heat
𝑄𝑄
( 3)
using costa of
exchanger, U-tube thethetray shell
size wasand obtained
tube1 cost using
toheat
obtain theEquation
ofexchanger,
the cost.
trayThe 3) 1.
(was costFor
of
theobtained
sizethereboiler
the pressure
usingwas vessel, Equations
estimated
Equation For the 4pr
using
1.
𝑈𝑈∆𝑇𝑇
𝑄𝑄 area of the heat exchanger [Equation 3] as the size parameter and
area of parameter
𝑄𝑄the 𝑄𝑄 =𝑎𝑎𝑎𝑎𝑎𝑎
exhanger 𝑈𝑈𝑈𝑈∆𝑇𝑇
was 𝑄𝑄𝐴𝐴 the
𝑎𝑎𝑎𝑎𝑎𝑎
(m𝑈𝑈∆𝑇𝑇2
heat
) which = was and
𝐴𝐴transfer 5ofwere used to calculate 2 the
and shell
5waswere mas beforeusing
1.used to calculate
using( 3) Equation
the shell 1mas to obtain
before the cost.
using Eq
𝑈𝑈∆𝑇𝑇 area determined the exhangerusing ( 3) (m ) then which determined
𝑄𝑄
= 𝑈𝑈𝑈𝑈∆𝑇𝑇 = Equation
( 3)
𝐴𝐴 =
Equation 3. 𝑄𝑄
𝑈𝑈∆𝑇𝑇
The cost of the reboiler wasThe estimated
cost of using area ofwas
the reboiler the estimated
heat exchanger using (Equation
area of the3)he
𝐴𝐴 =
𝑄𝑄 Deethanizer, Depropanizer and Debutanizer
𝐴𝐴 = as the size parameter forand a then Equation 1. thedepolarizer
(𝑇𝑇𝑜𝑜ℎ −𝑇𝑇𝑖𝑖𝑖𝑖 ) 𝑈𝑈∆𝑇𝑇 (𝑇𝑇𝑖𝑖ℎ −𝑇𝑇𝑜𝑜𝑜𝑜 )−(𝑇𝑇𝑜𝑜ℎ −𝑇𝑇𝑖𝑖𝑖𝑖 )
The cost of deethanizer,
−𝑇𝑇𝑜𝑜𝑜𝑜 )
for awhere 𝑈𝑈∆𝑇𝑇 ∆𝑇𝑇 = 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿
counter-current
𝑄𝑄
flow; =the (𝑇𝑇𝑖𝑖ℎ −𝑇𝑇𝑜𝑜𝑜𝑜 )
counter-current
as the size flow;
parameter and thenand debutanizer was esti-
Equation 1.
−𝑇𝑇𝑖𝑖𝑖𝑖 ) 𝑄𝑄 = 𝑈𝑈𝑈𝑈∆𝑇𝑇 𝑎𝑎𝑎𝑎𝑎𝑎 𝐴𝐴 == (𝑇𝑇𝑖𝑖ℎ−𝑇𝑇𝑜𝑜𝑜𝑜)−(𝑇𝑇𝑜𝑜ℎ−𝑇𝑇𝑖𝑖𝑖𝑖(𝑇𝑇 𝑙𝑙𝑙𝑙 ) (a)3)counter-current flow; the
−𝑇𝑇𝑖𝑖𝑖𝑖
mated separately as a pressure( 3)vessel, tray, reboiler and condens-
where
where ∆𝑇𝑇 = 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝑜𝑜ℎfor
𝑖𝑖ℎ for a counter-cur- er. The first three were obtained as in case of demethanizer, and
𝑈𝑈∆𝑇𝑇
𝑙𝑙𝑙𝑙 𝑖𝑖ℎ 5. Deethanizer,
(𝑇𝑇 −𝑇𝑇𝑜𝑜𝑜𝑜 )(𝑇𝑇 −𝑇𝑇
𝑜𝑜𝑜𝑜 )−(𝑇𝑇 depropanizer
𝑜𝑜ℎ −𝑇𝑇𝑖𝑖𝑖𝑖 ) and debutanizer
e (𝑇𝑇 C−𝑇𝑇
7 o𝑖𝑖ℎ and )−(𝑇𝑇
𝑜𝑜𝑜𝑜the where 𝑜𝑜ℎ −𝑇𝑇
approach
inlet 𝑖𝑖𝑖𝑖∆𝑇𝑇
cooling =
)temperature
fluid 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 was
temperature (𝑇𝑇𝑜𝑜ℎ =
assumed
−𝑇𝑇𝑖𝑖𝑖𝑖 ) to be(𝑇𝑇7 o−𝑇𝑇 C and) the inletfor 5.cost
Deethanizer,
cooling
the a counter-current
offluid
the depropanizer
temperature
condenser was flow;
estimated and
the debutanizer
as in the case of reboiler.
rent
(𝑇𝑇𝑖𝑖ℎflow;
𝑄𝑄−𝑇𝑇𝑜𝑜𝑜𝑜the) approach
for temperature
a counter-current waso assumed 𝑙𝑙𝑙𝑙
flow;
𝑖𝑖ℎ be 𝑜𝑜𝑜𝑜
to 7 oC theand
approach
𝐴𝐴𝑙𝑙𝑙𝑙= temperature
was O
25 Cfluid was assumed to be 7 C and the (𝑇𝑇inlet −𝑇𝑇cooling The purchased
fluid temperature cost of the equipment was summed in order to
The 25cost OC of 𝑜𝑜ℎ 𝑖𝑖𝑖𝑖 )
deethanizer, depropanizer
The cost of deethanizer, depropanizer and separately
and debutanizer was estimated as aswa a
the
(𝑇𝑇𝑜𝑜ℎinlet
−𝑇𝑇𝑖𝑖𝑖𝑖cooling
) temperature was obtain the total purchased equipment cost. The calculations
was 25 OC
𝑈𝑈∆𝑇𝑇
o
debutanizer
to approach o
2.7Vertical temperature
three-phase waspressure
inlet separators assumed to be tray,
vessel, 7 C reboilerand the inlet
mentioned cooling
earlier were
and condenser. fluid temperature
based
The on the CEPCI index of 509.7 in
first three were obtained as in case
assumed be−𝑇𝑇 C and theSeparators cooling fluid temperature pressure vessel, tray, reboiler
spareand condenser. Thewasfirst thre
ℎ −𝑇𝑇𝑜𝑜𝑜𝑜 )−(𝑇𝑇 Vertical
𝑜𝑜ℎ
2. Vertical ∆𝑇𝑇 𝑖𝑖𝑖𝑖 )
Three-Phase
three-phase separators
(𝑇𝑇 𝑖𝑖ℎ −𝑇𝑇 𝑜𝑜𝑜𝑜 )−(𝑇𝑇 𝑜𝑜ℎ −𝑇𝑇 𝑖𝑖𝑖𝑖 ) Jan. 2007 [10]. The cost of the of each equipment
where was =
O for 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿
a
25theCseparators (SEP 1 of =
counter-current flow; the for a counter-current flow; the
𝑖𝑖ℎThe cost of and demethanizer,
SEP 2)SEPwas ) determined
2) wasand thethecost sameofasEquation
the purchased
the condenser equipment
wascost cost for all the
estimated equipment.
SEP𝑙𝑙𝑙𝑙2)(𝑇𝑇was of the as in the case was of
−𝑇𝑇𝑜𝑜𝑜𝑜 ) (𝑇𝑇𝑖𝑖ℎ −𝑇𝑇
determined The cost of the
using separators
Equation 1, and (SEP 𝑙𝑙𝑙𝑙1 and
𝑜𝑜𝑜𝑜 determined ofusing
demethanizer, 1, andand the condenser est
The
(𝑇𝑇𝑜𝑜ℎ using𝑖𝑖𝑖𝑖 )Equation
−𝑇𝑇cost of the separators 1, and (SEP the size 1 andparameter
SEP 2)(𝑇𝑇was was
𝑜𝑜ℎ taken
determined
−𝑇𝑇 𝑖𝑖𝑖𝑖 ) to using
be theEquationThus,1,the andtotal purchased equipment cost was obtained by mul-
hickness (t) and2.shell
thickness the(t) size
mas parameter
(SM). The was taken
thickness to thickness
be the thickness
reboiler. The (t) and
purchased shell
cost masof (SM).
the The thickness
theequipment was summed in2.order to obtain the total
Verticalwas
the size oparameter
and three-phase
shell mas (SM).
taken to be the separators
The
thickness (t) and shell
and shell mass tiplying
mas (SM). Thereboiler.
purchased equipment cost by
thickness The purchased cost of the equipment was summed
In order to obtain
rators
med to
approach
be
were 7 C
obtained temperature
and the
using inlet was
Equationscooling
assumed
4 and fluid
5 totemperature
be 7 o
C and the inlet
the cooling
total purchasedfluid temperature
equipment cost as at October, 2022, the total
ations 4 and 5 and shell mass were obtained using Equations 4 and 5
and shellOmass were obtained using Equations purchased4 and 5 equipment cost.purchased The calculations
purchased equipment
equipment as mentioned
cost cost.
was The
multiplied earlier were
calculations
by 816.3 based
as was
which on the
mentioned
was 25The C cost of the separators (SEP 1 and SEP 2) was the determined using Equation 1, and
(SEP 1 and SEP 2) was 𝑃𝑃𝑖𝑖 𝐷𝐷𝑖𝑖 determined using CEPCI Equation
index of1,509.7 and in Jan.CEPCI 2007index index
(Sinnotin October, 2022 [10].
and Towler,
𝑡𝑡 = the𝑡𝑡 =
𝑃𝑃𝑖𝑖 𝐷𝐷𝑖𝑖
size 2𝑆𝑆𝑆𝑆 parameter
− 1.2𝑃𝑃
(4)
was taken to be the thickness (t) andCEPCI
(4) shell mas
(4)of
(SM). 509.7
The in Jan.2009).
thickness
The costand
2007 (Sinnot of Towler,
the spare20
n to be2.the
rs thickness
2𝑆𝑆𝑆𝑆
Vertical − 1.2𝑃𝑃 𝑖𝑖 (t) and shell
three-phase 𝑖𝑖
masof(SM).
separators eachThe thicknesswas Estimating
equipment the samethe asTotal
the Capital
purchased equipment
Investment [TCI]. cost for all the
and shell mass were obtained using Equations 4 and 5
The
of total
each capital
equipment
investment
was
[TCI]
the
was
same as
obtained
the purchased eq
by summing the
ed using𝑆𝑆𝑆𝑆 Equations 𝑆𝑆𝑆𝑆 =4𝜋𝜋𝜋𝜋𝜋𝜋𝜋𝜋𝜋𝜋
= 𝜋𝜋𝜋𝜋𝜋𝜋𝜋𝜋𝜋𝜋 and 5 (5) (5) (5)
P 1 and The SEP cost 2)of was thedetermined
separators using (SEPequipment.
1Equation
and SEP1, Thus,
2)andwas thedetermined
totalfixed
purchased
capital
equipment. equipment
usinginvestmentThus, the
Equation cost
and1, andwas
other
total obtained
outlays
purchased byfixed
[11]. The multiplying
equipment capital theo
cost was
Where: t = wall thickness
𝑃𝑃thickness in m; D = Vessel diameter, m; S= al- investment is the summation of the direct and indirect costs. The
Vessel Where:
diameter, Where:
t =m; wall S= 𝑖𝑖t𝐷𝐷 =𝑖𝑖 wall inthickness
allowable m; D =in
stress in m; D
Vessel = equipment
Vessel
diameter, m; diameter, costm;
S= allowable S=
stress allowable
Inin(SM). stress in the total purchased equipment cost
be thethe thickness
size
lowable2𝑡𝑡 = parameter
stress (t)2 inand was
shelltaken
N/mm2, Emas= weldto purchased
(SM). be the
Thethickness
efficiency, thickness
L = length (t)ofandthe shell
by
direct
2.cost
purchased
mas order to obtain
was equipment
The
calculated cost
thickness
as the(4)sum byof2.theInpurchased
order toequipment
obtain the total
N/mm in
h of the vessel , EN/mm
m; =2𝑆𝑆𝑆𝑆
weld efficiency,
𝜌𝜌 ρ,isis−
Ethe =1.2𝑃𝑃
weld
metal Ldensity
= length of
𝑖𝑖 efficiency,
the
Lkg/m vessel
= length in(4)
of m;
the 3is the
𝜌𝜌vessel in=metal 𝜌𝜌density
m;cost, theinmetal
isoffsite density inplant cost, and indirect cost included
vessel in m; the metal densityin in 3
as atEquations (8000
October, 42022, kg/m ), D the total and physical
sing Equations
and
kg/m
, take weld
shell
3
3.4m, (8000 4mass
L=8.9m,
kg/m
efficiency,
and
kg/m3 3were
5D
),
E=take
(8000
obtained
=weld
3.4m,
kg/m
1 Allowable ), DL=8.9m,using
3 efficiency,
=stress
3.4m, take 1weld
E=L=8.9m, efficiency,
Allowabletake weld
and 15
E=efficiency,
stress Allowable
for the atpurchased
assummation
E=stress
October,
1 Allowable
equipment
2022,
of design
stressand the
cost purchased
total
engineering
was multiplied
and contingencies.
by 816.3
equipment cost
forStainless𝑆𝑆𝑆𝑆
Stainless steel
=steel atat100
𝜋𝜋𝜋𝜋𝜋𝜋𝜋𝜋𝜋𝜋 100 FFisis about
oo
which
about o20ksi
20ksi or was
or 138N/mm
138N/mm the CEPCI
2 selected
2
index in October, 2022 (Sinnot (5)andinTowler,
October,2009).
20ksi or from 138N/mm for 2Stainless
𝑃𝑃
allowable 𝐷𝐷 selected
stress steel
from
table at 100
allowable
B [10]. F is about 20ksi (5)orselected
138N/mm from2 which
allowable
selected was
fromthe CEPCI
allowable index 2022 (Sinnot and T
stress table 𝑖𝑖(Sinnott
𝑖𝑖 and The total
Towler, physical plant cost (PPC) was calculated using the factors in Table 1 in calculated using the
2009).
The total physical plant cost [PPC] was
𝑡𝑡 = stress table (Sinnott and Towler, 2009). (4) factors in (4) 7 [10]. The outlays included the
Table 1 in Equation
2𝑆𝑆𝑆𝑆Where: − 1.2𝑃𝑃 tdiameter,
𝑖𝑖 = wall Equation thickness
7 S= 2.2.2in
(Sinnott Estimating
m;Towler,
and D stress the total
= 2009).
Vessel The capital
diameter,
2.2.2
outlays investment
m; S=
Estimating
included (TCI)
the allowable
the
working total stress
capitalcapital in investment (TCI)
s in m;3.LNG-100
D
LNG-100= Vessel m; allowable in working capital
The LNG-100 2 was assumed to be a U-type of shell and tube heat PPCin=m; PCE
N/mm3. LNG-100 , E = weld efficiency, Lmetal
= length of the 𝜌𝜌 (1 is
+ F1
the+ metal
F2 + …….+F7 (7)
in vesselThe density in
y, L = 𝑆𝑆𝑆𝑆length of the
= 𝜋𝜋𝜋𝜋𝜋𝜋𝜋𝜋𝜋𝜋
exchanger. Thevesselcost ofPPC in m;
the = PCE𝜌𝜌 (1
LNG-100 isThe
+the
was total
F1calculated
+ F2(5) density
+capital
…….+F7) investment
using Equa- (TCI) was obtained
(5) (7)by summing the fixed capital
total capital investment (TCI) was obtained by su
kg/m3 3
4m, L=8.9m, take(8000weld kg/m ), D =E= 3.4m, L=8.9m, stress
take weld efficiency, 8 E= 1 Allowable stress
efficiency,
Table 1. Factors 1 Allowable
investment
used in the and other
determinationoutlays (Bejan
of theinvestment
total et and
physical al.,
plant1995). The
cost8 plant
other outlays fixed capital investment is the
m; DWhere:
= Vessel
for tStainless
=diameter,
wall thickness
steel
Table
m; atS=1001.
in Factors
allowable
8m; used
o D = stress
F is
in the
Vessel
about
determination
indiameter,
20ksi or
of the total
m; S=2 allowable
138N/mm
physical
selected stress
from incost (Bejan et al., 1995). The fixe
allowable
o 2
F is about 220ksi or 138N/mm Item
selected from of
summation allowable
the direct andsummation
indirect costs.of theThe direct
direct and cost was calculated
indirect costs. Theasdirect
the sum
cost
= length
N/mmofstress
the
, E vessel
=table
weld(Sinnott 𝜌𝜌 factor
inefficiency,
m; is
andthe
L =metal
length
Towler, density
of
2009). the in
vessel in m; 𝜌𝜌 is the metal density in
wler, 2009). F1 of the purchased
Equipment erection equipmentof cost, the offsite and
0.3 physical plant cost, and indirect cost
L=8.9m, 3
kg/mtake
(8000
weld
kg/m 3
efficiency,
), F2
D = 3.4m,E=Piping
1 L=8.9m,
Allowabletake stress
weld efficiency, E=purchased
1 Allowable
0.8
equipment
stress cost, offsite and physical pla
3. LNG-100 F32 included
o Instrumentation the summation of design and engineering
0.3 and contingencies.
s aboutfor20ksi
Stainless
or 138N/mm
steel at 100 selected
F is about 20ksi or 138N/mmincluded
from allowable 2
selectedthefromsummation
allowable of design and engineering and cont
F4 Electrical 0.1
r, 2009).
stress table (Sinnott and Towler,
F5 Civil2009). 0.2
F6 Structures and building 0.2 8 9
F7 Lagging and painting 8 0.1
3. LNG-100
Petro Chem Indus Intern, 2023 Volume 6 | Issue 2 | 145

The fixed capital cost (FC) was calculated using Equation 8 and factors in Table 2
8 8
PPC (1+F11) (1+F10+F12) (8)
 PPC (1+F11) (1+F10+F12) (8)

The working capital cost (WC) was calculated as 20 % of FC G

The total capital investment (TCI) = FC + WC (9)

The fixed capital cost (FC) was calculated using Equation 8 and The working capital cost (WC) was calculated as 20 % of FC G
factors in Table 2 The total capital investment (TCI) = FC + WC (9)
PPC (1+F11) (1+F10+F12) (8)
Table 2. Factors used in the determination of the fixed capital cost (Sinnott and
Towler, Table
2009) 2. Factors used in the determination of the fixed capital cost [10]

F10 Design and Engineering 0.30

F11 Offsites (OS) 0.30
F12 Contingencies 0.10
Estimating the Total Production Cost [TPC] was estimated by adding [S/N: 1-9], and TVC was calculated
The total production cost was estimated by summing the direct through the summation of [S/N: 10-12] in Table 3, respectively.
production cost and 2.2.3 Estimating
the total generalthe total production
expenses. costpro-
The direct (TPC)The total general expenses was estimated by adding [S/N:13-15]
Table 3. Cost parameter asumptions used in the
duction cost [DPC] was obtained by the summation of the total estimating
in Table 3. the total production (TPC)
fixed cost [TFC] andThethetotal production
total variable cost [TVC].
was estimated
The TFC by summing the direct production cost and
(Sinnott and Towler, 2009)
the total general expenses. The direct production cost (DPC) was obtained by the
Table 3. Cost parameter asumptions used in the estimating the total production [TPC] [10]
summation of the total fixed cost (TFC) and the total variable cost (TVC). The TFC
S/N was
Cost parameter
estimated by adding (S/N: 1-9), and Range Assumption
TVC was calculated through the summation
of (S/N: 10-12) in Table 3, respectively. The total general expenses was estimated by
1. Maintenance and repair cost 5-10 % of FC 5 % of FC
adding (S/N:13-15) in Table 3.
(MTC)

2. Operating labour cost (OLC) 6-20 % of TCI 10

15 % of TCI

3. Laboratory charges 5-23 % of OLC 10% of OLC

4. Supervision cost 10-20 % of OLC 15 % of OLC

5. Plant overhead cost 5-15 % of OLC 10 % of OLC

6. Capital charges 5-10 % of FC 6 % of FC

7. Insurance 0-1 % of FC 1 % of FC

8. Local texes 0-2 % of FC 1 % of FC

9. Patent and Royalties 0-1 % of FC 1 % of FC

10. Raw material cost (RMC) 10-50 % product cost 0

11. Utilities 10-20 % of MTC 10 % of MTC

12. Miscellaneous 10 - 20 % of MTC 10 % of MTC

13. Sales expense 5 % of DPC

14. Research and Development 2-4 % of Laboratory 4 % of

cost Laboratory cost

15. General overhead 5 % of DPC

Petro Chem Indus Intern, 2023 Volume 6 | Issue 2 | 146

2.3 Profitability analysis

(1). Anuual revenue

 butane. The profit before tax (PBT) and profit after tax (PAT) were calculated using
Equations 10 and 11, respectively.
Profit before Tax (PBT) = Total income – Total production cost (10)
Profit after Tax (PAT) = PBT – Tax payable (11)
Profitability Analysis Profit before Tax (PBT) = Total income – Total production cost
Anuual Revenue:- The annual revenue [income] was obtained (10)
by the summation of the earnings from the sales of the products Profit after Tax (PAT) = PBT – Tax payable (11)
The rate
such as methane, of return
hydrogen, (ROI),
ethane, and the
propane, andpay back period (PBP) were estimated using
butane/i-bu-
Equations 12 and 13, respectively.
tane. The profit before tax [PBT] and profit after tax [PAT] were The rate of return (ROI), and the pay back period (PBP) were
calculated using Equations 10 and 11, respectively. estimated using Equations 12 and 13, respectively.

𝑃𝑃𝑃𝑃𝑃𝑃
Rate of Return (ROI) = 𝑋𝑋 100 (12)
𝑇𝑇𝑇𝑇𝑇𝑇
𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖
Pay Back Period (PBP) = (13)
𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑇𝑇𝑇𝑇𝑇𝑇

Results and Discussion thousand, eight hundred and sixty six dollars ($52,327,866) if
Cost Estimation provision is to be made for spare parts of the equipment in or-
Determining the Purchased Equipment
3.0 Results and Discussion Cost:- The purchased der to ensure the availability and reliability of the system for
equipment cost helps in determining the overall cost of the re- optimum recovery. Considering the components of the flare gas
covery system. For each equipment, the purchased cost is pre- recovery system which included compression, cooling, flashing
3.1. Cost
sented in Table 4. Theestimation
table shows that it would require a sum of and separation, the cost of compressor was 87.35 %. This means
two million, one hundred and sixty three thousand, nine hundred that the cost of compression is more expensive compared to the
and thirty 3.1.1
three Determining the purchased
dollars [$26,163,933] equipment
to purchase the equip-cost
cost of other components of the system. This shows that cost
ment needed for the establishment of flare gas recovery system. of compression in the system is a controlling factor of the total
This cost is doubled to fifty two million, three and twenty seven purchased equipment cost.
The purchased equipment cost helps in determining the overall cost of the recovery
Table 4. Purchased equipment
Tablecost
4. Purchased equipment cost
system. For each equipment, the purchased cost is presented in Table 4. The table
shows thatS/N
it wouldEquipment
require a sum of two million, one hundred
Price ($) and sixty three
thousand, nine
1 hundred and thirty three dollars ($26,163,933)
Compressor 22854644 to purchase the
equipment 2needed for the establishment of flare gas recovery
Pump 40897 system. This cost is
doubled to fifty
3 two million, three and twenty seven thousand,
Cooler E-100 eight hundred and sixty
629607
six dollars ($52,327,866)
4 if provision
Cooler E-101 is to be made for spare parts of the equipment in
211875
order to ensure
6 the availability
Cooler E-104 and reliability of the system
46,945for optimum recovery.
Considering7 the components
Separator SEPof the
1 flare gas recovery system which included
280,810
compression,
8 cooling,Separator
flashing SEP
and 2separation, the cost of compressor was 87.35 %.
112638
This means9that the cost of LNG-100
Cooler compression is more expensive compared to the cost of
27,145
other components
10 of Demethanizer
the system. This shows that cost of compression
107,116 in the system is
a controlling
11factor ofDeethanizer
the total purchased equipment cost.465,163

12 Depropanizer 722,525
13 Debutanizer 664,568
Total 26163933

Estimating the Total Capital Investment million and eighty eight thousand, one hundred and fifty eight
The result of the 3. 1. 2 Estimating
estimated the total
total capital capital[TCI]
investment investment
of dollars ($549,088,158) with about 83.3 % of the cost accruing
the flare gas recovery system is presented in Table 5. The table from the fixed capital. The TCI is a determinant 12 of both ROI and
The result
shows that to establish ofofthe
the kind the estimated
system beingtotal capital
proposed in investment (TCI)
PBT because of of theofflare
dependence gas recovery
their calculation on it.
this work, that it will require a TCI of five hundred and forty nine
system is presented in Table 5. The table shows that to establish the kind of the system
being proposed in this work, that it will require a TCI of five hundred and forty nine
Petro Chem Indus Intern, 2023 Volume 6 | Issue 2 | 147
million and eighty eight thousand, one hundred and fifty eight dollars ($549,088,158)
with about 83.3 % of the cost accruing from the fixed capital. The TCI is a
determinant of both ROI and PBT because of dependence of their calculation on it.
 with about 83.3 % of the cost accruing from the fixed capital. The TCI is a
determinant of both ROI and PBT because of dependence of their calculation on it.

Table 5. Estimated total capital investment (TCI)

Table 5. Estimated total capital investment [TCI]

S/N
Items Cost ($)
51
Total Capitalequipment
Purchased Investment
cost 549,088,158
52,327,866
2
Physical Plant Cost 251,413,992
3
3.1.3 Estimating the total production cost
Fixed Capital 457,573,465
As4 shown in Table 6, the total production cost of the flare gas recovery system is
Working Capital 91,514,693
estimated to be two hundred and four million, six hundred and eighty one thousand,
5
Total Capital
seven hundred Investment
and sixty two dollars ($204,681,762). The 549,088,158
table also shows that total
variable cost is the least component.
Estimating the Total Production Cost lion, six hundred and eighty one thousand, seven13 hundred and
As shown in Table 6, the total production cost of the flare gas sixty two dollars [$204,681,762]. The table also shows that total
recovery system is estimated to be two hundred and four mil- variable cost is the least component.
Table 6. Estimatedthe
3.1.3 Estimating total production
total costcost
production (TPC)
Table 6. Estimated total production cost [TPC]
As shown in Table 6, the total production cost of the flare gas recovery system is
S/N
estimated Items
to be two hundred and four Costthousand,
million, six hundred and eighty one ($)
(A) hundred and sixty
seven Fixed cost
two dollars ($204,681,762). The table also shows that total
1
variableMaintenance andcomponent.
cost is the least Repairs 22,878,673
2 Operating labor 82,363,224
3 6.Direct
Table supervisory
Estimated and Clerical
total production costlabor
(TPC) 12,354,484
4 Laboratory Charges 8,236,322
5 Plant Overheads 8,236,322
S/N Items Cost ($)
6 Capital Charges 27,454,408
(A) Fixed cost
7 Insurance 4,575,735
1 Maintenance and Repairs 22,878,673
8 Local Taxes 4,575,735
2 Operating labor 82,363,224
9 Patent & Royalties 4,575,735
3 Direct supervisory and Clerical labor 12,354,484
Total fixed operating cost (TFC) 175,250,638
4 Laboratory Charges 8,236,322
5 Plant Overheads 8,236,322
(B) VARIABLE COST
16 Capital
Raw Charges
Material Cost 0 27,454,408
27 Insurance
Utilities 4,575,735
8,236,322
38 Local Taxes
Miscellaneous 4,575,735
2,287,867
9 Patentvariable
Total & Royalties
cost (TVC) 4,575,735
10,524,189
Total fixed
Direct operating
Production cost cost
(DPC)(TFC)
= TFC +TVC 175,250,638
185,774,827

(B)
(C.) VARIABLEEXPENSES
GENERAL COST (GE)
1 Raw Material Cost 0
Petro Chem Indus Intern, 2023 Volume 6 | Issue 2 | 148
2 Utilities 8,236,322
3 Miscellaneous 2,287,867
14
Total variable cost (TVC) 10,524,189
 3.2. Profitability analysis
As shown in Table 7, the Profit After Tax (PAT), Rate of Return (ROI) and Pay Back
Time (PBT) of the flare gas recovery system were determined to be $2,007,068,515,
365.50 % andExpenses
Sales 3.28 months, respectively. The huge profit after tax obtained shows that
9,288,741
the investment would
Research be lucrative. A very high ROI of over 360 % suggests
and Development 329,453 that the
investment would
General be of great benefit for any prospective investors. 9,288,741
Overheads Comparing this
with over 200general
Total % obtained by (TGE)
expenses Hajizadeh et al., (2017) shows that the 18,906,935
current is more
viable. The PBTtotal
Annual of less than four
production months
cost (TPC)when compared to 1.02 years,
= DPC+TGE and 1.6 years
204,681,762
obtained by Mousavi, et al. (2020), and Barekat-Rezaei,
Profitability Analysis 360 % suggests thatetthe
al.investment
(2018), would
respectively
be of great benefit for
As shown in Table 7, the Profit After Tax (PAT), Rate of Return any prospective investors. Comparing this with over 200 % ob-
shows more viability, efficiency and enhanced liquidity status of the investment.
(ROI) and Pay Back Time (PBT) of the flare gas recovery sys- tained by shows that the current is more viable. The PBT of less
tem were determined to be $2,007,068,515, 365.50 % and 3.28 than four months when compared to 1.02 years, and 1.6 years
3.2. Profitability analysis
months, respectively. The huge profit after tax obtained shows obtained by Respectively shows more viability, efficiency and
Table
that the investment
As 7. Profitability
would
shown beTable
in lucrative. analysis
A very
7, the highAfter
Profit ROI ofTax
over(PAT),
enhanced
Rate liquidity
of Returnstatus
(ROI)of theand
investment
Pay Back[6-8].
Table 7.system
Time (PBT) of the flare gas recovery Profitability
wereanalysis
determined to be $2,007,068,515,
Items % and 3.28 months, respectively. The hugeAmount/Value
365.50 profit after tax obtained shows that
the investment
Plant Operationwould be lucrative. A very high ROI of over 360
Continuous % suggests that the
process
investment would Value
Plant Attainment be of for
great
all benefit
sectionsfor any prospective
94.52 % investors. Comparing this
with overMethane
Annual 200 % obtained
Production by Hajizadeh et al., (2017) shows that litre
530,747,460.14 the current is more
viable.
AnnualThe PBT of Production
Hydrogen less than four months when compared to 1.02 years,
7,170,601.0114 kg and 1.6 years
obtained by Mousavi,
Annual Ethane et al. (2020), and Barekat-Rezaei,
Production 22,218,144et MMBtu
al. (2018), respectively
shows
Annualmore viability,
Propane efficiency and enhanced liquidity
Production status of theLitre
1,538,931,180.8 investment.

Annual Butane/isobutane Production 2,124,624,522

Table 7. Profitability analysis
Annual Debutanized product Production 437,898,796 litre
Market Selling Price of Methane $1.31 per litre
Items Amount/Value
Market Selling Price of Hydrogen $16/per kg
Plant Operation Continuous process
Market Selling Price of Ethane $1.36/MMBtu
Plant Attainment Value for all sections 94.52 %
Market Selling Price of Propane $0.39 per litre
Annual Methane Production 530,747,460.14 litre
Conclusion References
The economics Annual
analysisHydrogen
of a flare Production
gas recovery system in a re- 1. 7,170,601.0114 kg
Rao C.S(2005): Environmental Pollution Control Engineer-
finery in Nigeria has been conducted.
Annual Ethane Production The result shows that it ing 1st Edition,
22,218,144 MMBtu New Age International (P)15
Limited, Delhi
would require a capital investment of about five hundred million Page 71-72.
Annual
dollars to establish suchPropane Production
a venture. This cost is quite enormous, 2. 1,538,931,180.8
Zadakbar, O. A. V.Litre
A. K. K., Vatani, A., & Karimpour, K.
but, the proft margin after tax is greater with about one thou- (2008). Flare gas recovery in oil and gas refineries. Oil &
Annual
sand five hundred Butane/isobutane
million dollars owing to Production
zero cost of the raw 2,124,624,522
Gas Science and Technology-Revue de l'IFP, 63(6), 705-
material [flareAnnual
gas] as it is currently a
Debutanized productwaste in Production
the refinery. The 711.
437,898,796 litre
high rate of return of 365.50 % and low payback time of 3.28 3. Gas Outlook (2023). Gas flares in Nigeria oil heartland
months showMarketthat the Selling
investmentPrice of Methane
is profitable, viable, feasible, $1.31
harmper litre Accessed 15th November, 2022. https://ga-
children.
bears less risk, and efficent. The low payback time also indicates soutlook.com/analysis/gas-flaring-in-nigeria-oil-heartland-
Market
improve liquidity Selling
position Price
of the of Hydrogen
investment. Due to the profit- $16/per kg
harms-children/
ability of this Market
system, the refinery would benefit
Selling Price of Ethane immensely from 4. $1.36/MMBtu
FAO, FAOLEX (1991). National Environmental Protection
the installation and operation of the the flare gas recovery system (Pollution Abatement in Industries and Facilities Gener-
Market
through mitigation Selling
of the Price gas
greenhouse of Propane
emission, valorization $0.39
atingper litre Regulations 1991. United Nations Environ-
Wastes)
of refinery waste [flare gas], and has health and enormous eco- mental Programme. https://leap.unep.org/countries/ng/
nomic benefits. national-legislation/national-environmental-protection-pol-

15
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 lution-abatement-industries
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geria Official Gazette (2021). accessed 27th August, 2021.
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6. Hajizadeh, A., Mohamadi-Baghmolaei, M., Azin, R., Os-
fouri, S., & Heydari, I. (2018). Technical and econom-
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Chemical Engineering Research and Design, 131, 506-519.
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(2020). Technical, economic, and environmental assess-
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Sources, Part A: Recovery, Utilization, and Environmental
Effects, 1-13.
8. Barekat-Rezaei, E., Farzaneh-Gord, M., Arjomand, A., Jan-
natabadi, M., Ahmadi, M. H., & Yan, W. M. (2018). Ther-
mo–economical evaluation of producing liquefied natural
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9. Edeh, I., Olawale, Y. M. (2023). Simulation of Flare gas
Recovery system of a Refinery Plant in Nigeria. Biomedical
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