TNAG-0947-FCO40-1166-Oil-developments-in-and-around-Hong-Kong-1980 — Page 83

APPENDIX 9

-DEMAND SHIFT REQUIRED TO MAKE PROJECT ECONOMICALLY VIABLE UNDER

CURRENT PRICE CONDITIONS

Assumptions (1990 Demand)

(1)

(2)

LDF demand increases to 793,000 tpa (to absorb LDF produced from crude).

With LDF demand now available in Hong Kong, value now Singapore postings & freight.

(3) M/S demand remains at 278,000 tpa (probably totally unrealistic

to expect it to rise significantly).

(4)

Value of products from crude required to make project viable is $249/mt. (Value of Chinese crude plus margin required to make project viable $33/bbl +$1/bbl = $249/mt).

(5)

Therefore demand shift fuel oil gas oil required.

From Attachment B (with adjustments).

%%

$/mt.

C3/C4

3.0

321

9.63

LUF

7.2

321

23.11

M/S

2.5

349

'8.73

€

ATK/DPK

8.3

330.4

27.42

G.O.

295

2.95%

F.O.

74-x

172

127.28-1.72x

Luber

:

1.0

400

4.0

249

200.17 + 2.95x-1.72x = 249

X = 39.7%

'000 toa

%

03/04

4.

3.0

329

LAF

7.2

793

M/S

2.5

278

ATK/DPK

8.3

318

G.O.

39.7

4,385

F.0.

34.3

3,788

Lubes

1.0

110

Gas Oil demand must rise to 4,385 ('000 tpa) from expected 1,949 ('000 tpa)

Fuel demand must fall to 3,788 ('000 tpa) from expected 6,026 ('000 tpa).