1. Problem Definition
One of the critical phases on gas station project is commissioning phase. If the gas station not already connects with gas pipeline, gas station will commission using gas from Gas Transport Module (GTM). Gas will directly inject to scrubber. GTM also have function for deliver gas from mother station to daughter station. Author Company`s will assess the most economical way to use from GTM.
2. Development of feasible alternatives
Alternatives for GTM:
- Investing new GTM and commission by company resources
- Hire third party specialize on GTM for commissioning phase
- Leasing GTM as commission tools and commission by company resources
It is important to choose which most efficient way to commission gas station, especially with numerous number of gas station project.
3. Possible Solution / Alternative
Calculation of investment, maintenance cost, operating cost and rent cost based on inquiry from GTM Vendor for new equipment or leasing and Third Party specialize in this field.
4. Selection of Criteria
The acceptance criterion is the option with lowest total net worth.
5. Analysis and Comparison of the Alternatives
Table 1. Summary result of investing, renting, and leasing (Operating Lease Scenario) data
The scenario for leasing is “Operating Lease”, with lease rental payment is 65% of investment price, based on internal author company data.
Table 2. Book Value at the end of life time, using Straight Line Depreciation
Calculation summary :
Table 3. Present Worth for Purchasing
Table 4. Present Worth for Renting
Table 5. Present Worth for Leasing
Table 6. Calculation Net Worth Purchase, with MARR 14%.
Author use MARR 14% based on Lita Liana paper that concludes range of MARR in oil and gas project is 14% to 34%.
6. Selection and Preferred Alternatives
Table 6 show that total cost of leasing GTM is the lowest. For long term use, leasing GTM is the most efficient way.
7. Performance Monitoring and the Post Evaluation of Result
It is recommended to review feasible leasing alternatives, and conduct performance equipment monitoring. For example Net lease scenario, where the payment not include maintenance and insurance, or Capital Lease scenario, where we can buy the asset at the end of lease term.
- Sullivan, G. W. (2014). Engineering Economy 16th Chapter 2,5 and 7, pp. 71-73, 213 – 215 and 332 – 337
- Adhi, Oktafianto. (2017). W3_OAN_ Investing vs Renting vs Leasing Studies|Emerald AACE 2018. Retrieved from http://emeraldaace2017.com/2017/08/15/w3_oan_investing-vs-renting-vs-leasing-studies/
- Liana, Lita. (2014). Using Analytical Hierarchy Process to Determine Appropriate Minimum Attractive Rate of Return for Oil and Gas Projects in Indonesia, PM Word Journal Vol. III. Retrieved from http://pmworldjournal.net/article/using-analytical-hierarchy-process-determine-appropriate-minimum-attractive-rate-return-oil-gas-projects-indonesia/?lipi=urn%3Ali%3Apage%3Ad_flagship3_pulse_read%3Bzx66NZmmQrKJ3%2BZJpWDqkw%3D%3D