Bio-SNG - CNG Services

BIO-SNG FEASIBILITY STUDY – ESTABLISHMENT OF A REGIONAL PROJECTIt must be noted that this analysis is a calculation of the levelised cost at a discount rate of 12% in orderto calculate an out turn cost of Bio-SNG. For an investor to have the appetite to invest, then there must bea sufficiently attractive return. From this analysis it is clear that the only case which could have sufficientscope for project return is a facility fuelled by SRF. On the assumption set given here, such a facilityprovides a pre-tax unleveraged return of 14.5% to 17% for gas prices of 40 to 60p/therm respectively.However, whether this is a sufficient return to entice investment depends on the risk profile, itsmanagement and perception of ability to secure debt on refinancing in order to enhance the project value.51