Petroleum Science >2010,??Issue 3:??428-434 DOI: https://doi.org/10.1007/s12182-010-0089-6
Valuation of the flexibility in decision-making for revamping installations ―A case from fertilizer plants Open?Access
文章信息
作者：WANG Zhen and LI Liangjun
作者單位：
School of Business, China University of Petroleum, Beijing 102249, China;School of Business, China University of Petroleum, Beijing 102249, China
投稿時間：2009-11-23
引用方式：Wang, Z. & Li, L. Pet. Sci. (2010) 7: 428. https://doi.org/10.1007/s12182-010-0089-6
文章摘要
This paper puts forward a valuation model for the flexibility of revamping urea plants based on the substitutability of switching between the internationally accepted fertilizer feedstock fuel oil and natural gas. The paper first builds a stochastic mean-reversion model for fuel oil prices and natural gas prices respectively, then estimates and tests the parameters using the fuel oil and natural gas prices data from the U.S. market. This paper also conducts a sensitivity analysis with important parameters. The results show that the real option method can be applied successfully to evaluate the flexibility in decisionmaking for revamping installations in fertilizer plants or other similar plants.
關鍵詞
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Real option, fertilizer installations, fuel oil, natural gas, mean reversion