According to the work carried out for the Venice Port Authority by the ECBA company, presented at the GAINN_IT meeting on May 9, 2016, the evolution of the cost of LNG and, above all, the estimate of the potential market for the area surrounding the port of Venice, led San Marco Petroli S.p.A. (SMP) to consider the construction of the new LNG Storage Port Terminal – South Industrial Canal for maritime and road use and for other uses within the Port of Venice.
The purpose of the study is to develop an economic and financial analysis of the costs and benefits related to the new LNG Storage Port Terminal, in order to submit the project to the tender “2016 CEF (Connecting Europe Facility) Transport Calls for Proposals”.
The support activity of DITS for the purposes of economic and financial analysis was divided into the following phases:
Definition of objectives and identification of the project:
Project identification: Receipt by the Client of the data on the supply and demand of the project, the financial and regulatory context (any financial thresholds for admissibility) and analysis for the purposes of the agreed objectives;
Project definition: Definition of the basic parameters of the analyses in order to determine the geographical, temporal and functional boundary of the impact of the project;
Feasibility and options analysis: Definition of the possible project alternatives to be subjected to a Benefit-Cost Analysis (ABC), of the methodology followed in the ABC and of the related performance indicators;
Financial analysis of the investor:
Time horizon: Definition of the useful financial life of the project;
Determination of total costs: the financial costs include those relating to the initial investment, the operational costs of operation and maintenance, including costs for internal and external safety deriving from the implementation of the project;
Revenues generated by the project;
Residual value of the investment;
Corrective parameters: corrections for inflation and discount rate;
Evaluation: determination of performance indicators, search for financial sustainability and any co-financing rate;
Economic Analysis for the community:
Tax corrections to the costs and revenues of the Financial Analysis;
Determination of external costs and benefits;
Determination of conversion factors from market prices to account prices;
Discounting and calculation of the economic rate of return.
Other evaluation elements and possible Multi-criteria Analysis: if the results of the previous Analyses make it appropriate, the ACB could be accompanied by appropriate quantitative but non-monetary assessments on the economic, environmental and social impacts that the Project could have in the determined geographical area;
Analysis of uncertainties:
Sensitivity analysis: the main parameters that have an effect on the results of the analyses will be identified and subjected to appropriate variations;
Scenario analysis: in addition to the one deriving from the previous analyses, two other scenarios will be identified, one optimistic and one pessimistic;
Risk probability analysis: the probabilities of realization of the scenarios previously constructed will be assessed.
Job name: Economic and financial analysis of costs and benefits related to the “new liquefied natural gas storage port terminal – southern industrial channel”
Year: 2016
Client: San Marco Petroli S.p.A.
Website: http://www.smpetroli.it