June 16, 2003
The
Feasibility
Study Of Lng Plant, Vehicle Conversion Plant, 6 Refueling Stations
&
Taibaishan Project.
Equipment/total cost depreciation per year/# years (US$ in Million)
1. 60,000 gpd LNG Plant 9.0/10.0
0.6/15 years
2. Conversion
Plant
1.5/2.0 0.3/ 5 years
(1000 busses @) 1,500)
3. Transportation
Co.
1.2 0.4/3 years
(10 Trailers (@ 0.12)
4. 6 x Refueling
Stations
2.4 0.24/10 years
5. Taibaishan
refueling
1.25+0.4 0.25/5 years
Station & Transportation Company
50 mid bus
@
025 1.25
6.
Miscellaneous
0.75
Total
Investment
18.0 1.79/years
LNG Cost Analysis: -
1. Plant Cost: - Maintenance Y 1,700,000.
- Labor &
Administration
2,500,000
-
Electricity
857,000
- Fuel
Gas
5,680,000
Total CRY 10,737,000 or CRY O.13/liter
2. Process Gas Cost:
50,000,000 M3 (4 CRY O.74 CRY 37,000,000 or CRY 0.46/liter
3. Transportation Cost to Xian (1,400 km return)
LNG trailer with capacity 45,000 liters
- Toll fees CRY 900.
-
- Drivers
CRY 400. -
- Fuel (LNG) CRY 500. -
840 liters @ 0.6/1
- Maintenance CRY 400. -
Total CRY CRY 2,200.- or 0.05/liter
LNG Cost per liter delivered to Xian CRY 0.64
PROFIT ANALYSIS
1. Sales of 80,000,000
liters
CRY 112,000,000
CRY 1.40/liter
2. Costs:
- 80,000,000
@
0.64/1
- 51,200,000
- Overhead for refueling Stations & sales tax
@ Y 0.10/liter
8,000,000
- First Year equipment
depreciation
- 15,000,000
(US$1.79M)
3. Gross profit from sales of
LNG
37,800,000
4. Gross profit from operation of
mid-busses
20,000,000
in Taibaishan
5. Total Profit before tax & interest payment CRY 57,800,000
Or US$ 7,006,000
If LNG selling price is CRY 2.05/M3
= US$0.712/US gallon as per Kryopak calculation, then
US$ 0.712/US gallon = US$ 0.188/liter or CRY 1.55/liter
1. Sales of 80,000,000 liters @
1.55/L CRY 124,000,000
2, Less total
cost
CRY 74,200,000
3. Gross profit from sales of
LNG
CRY 49,800,000
4. Gross profit from
Taibaishan
CRY 20,000,000
5. Total Profit before tax & interest
payment
CRY 69,800,000
Or US$ 8,460,000
NB. The profit tax for the First and Second years are 0%
From Third to Fifth years, the tax is 15%.
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Agreement
The Xian Public Transit (referred as Party A) and the Shaanxi
Intercontinental
LNG Co., Ltd (referred as Party B), after friendly discussion &
negotiation,
have reached the following agreement of converting 1000 busses into LNG
fueled busses.
Party A: Xian Public Transit Corporation
Party B: Shaanxi Intercontinental LNG Co., Ltd
1. Party A & B agree that Party A will provide to Party B
two busses,
one powered by gasoline & one powered by diesel engine.
Party B will convert them into LNG fueled busses for testing &
to obtain the Certificate of Production Permission for the rest of the
busses.
2. Based on the success of conversion above two busses, Party
B will
apply for the license of LNG Conversion Qualification and to build the
LNG Conversion Plant.
3. Party B should have a contingence plan for the supply of
LNG to Party
A in case no supply of LNG from Yulin Plant.
All the extra cost incurred will be borne by Party B.
4. Party B will help Party A to apply for any special policies
or subsidies
available from Municipal Government.
5. Party B will invest RMY 5 million (US$ 600,000) to
construct a LNG
Refueling Station when starting bus conversion.
Party A will select a location and provide a site for
constructing the
refueling station at no cost to Party B.
Party B has the full right to operate the refueling station for 10
years.
6. Party B agrees that the selling price of LNG will not be
higher than
the price of CNG set by Municipal Government for Xian Transit
(Current CNG price is RMY 2.05/M3).
The price of LNG will follow the market price of CNG.
7. Those busses converted into LNG fuel by Party B will only
allow using
LNG supplied by Party B.
8. Construction of the first LNG refueling station & mass
conversion
of busses will commence on March 1, 2004.
There will be sufficient number of LNG fueled busses to use LNG when
Yulin LNG Plant starts production on September 1, 2004.
Party A: Xian Public Transit Corporation
Stamp & signature
Party B: Shaanxi Int'l LNG Co., Ltd Stamp & Signature
2003.6.2
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