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A Study on Economic Evaluation of SNG Project using Real Option Valuation Model

실물옵션을 이용한 SNG 사업투자의 경제성 평가 연구

  • Kang, Seung Jin (Grad. School of Knowledge-based Technology and Energy Korea Polytechnic Univ.) ;
  • Hong, Jin Pyo (Korea Electric Power Corporation Electric Power Research Institute)
  • 강승진 (한국산업기술대학교 지식기반기술에너지대학원) ;
  • 홍진표 (한국전력공사 전력연구원)
  • Received : 2014.04.14
  • Accepted : 2014.06.30
  • Published : 2014.06.30
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Abstract

This study attempts to suggest an economic analysis model for SNG projects, which can reflect the future uncertainty objectively and applies the real option valuation incorporating the flexible investment decision. Based on this analysis model, net present value and internal rate of return were estimated by using preliminary feasibility study report of SNG project. And economic evaluation of SNG project was performed with real option valuation using binomial option model. Through this, the difference of analysis results between the real option valuation model and the discounted cash flow model were compared and the usefulness of the real option valuation model was confirmed. From the actual proof analysis, it is confirmed that the real option valuation model showed higher SNG project value than the discounted cash flow model did. It was confirmed that by applying the real option valuation model, economic analysis can be performed on not only the current straightforward SNG project, but also various future portfolios having options such as expansion, modification, or decommission.

Keywords

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