mecowa “cng virtual pipeline” in ghana 2016 - mecowa .pdf · “cng virtual pipeline” in...

BusinessProblem

MECOWA“CNGVirtualPipeline”inGhanaMITGlobalEntrepreneurship Team 2016-2017

Ghanahaslimitedenergyaccessibility:c.7.3millionpeople(i.e.30%)donothaveaccess

Unreliabilityofenergysupply,andgapbetweendemandandsupplyatpeakhours

Electricitypricesatunsustainablelevels(e.g.59%increaseinFeb.‘16)

Methodology

Sourcing Compression Transportation GenerationDecompression

Company

MECOWAisafamilyowned,diversifiedholdingcompanythatspecializesindevelopingopportunitiesforsocioeconomicgrowthwithinGhanaandotherpartsofAfrica

Solutio

n

HelpMECOWAassessthefinancialfeasibilityofaCNGvirtualpipeline(VP)toserveindustrialclientsMaindeliverable:comprehensiveoperatingandfinancialmodel

BuildaCompressedNaturalGas(CNG)VirtualPipeline(VP)toprovidegastocustomers

Focusoftheproject:secureconstantgas,compressedat“motherstation”,transportittocustomersviatruckfleet,decompressitattheclientsite

Results

Recommendatio

nsTeam

Daniel Benami, DavidBassani, JoseMaria GalvanGimenez, Nerea Eceiza Arregui

IncrementalCosttohit20%targetIRRin

Scenario1:$5.5/mmbtu

$15.5$0.7$2.1$0.2$1.5$1.1$10.0

$20

$5

$0

$15

$10

Transp. GasSalePrice

OtherCosts**

GasPruchasePrice

Decomp.Compr. IncomeStatementMargin

Threemainscenariosanalyzed Incrementalcost(IC)ofCNGVP($/mmbtu)

NPVrangingfrom$1.3mto$13.5mIRRrangingfrom17.8%to36.9%

ScreenshotsfromthemodelbuiltforMECOWA

MECOWAshouldpursuethisfinanciallyfeasibleprojectfollowingtheserecommendations1 Assureahighinletpressure in

thecompressionstation (40-80bars)

2 Owntransport.fleet

3 Serveclientscloserthan130km

4 Investindecompressionstationstoeaseadoption