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Delivered Cost of DME to Europe

BP, being a major oil company, has the ability to estimate the fundamental parameters dictating the "Delivered Cost of DME to Europe".

The total delivered cost of DME to a European filling station will be the result of economic interactions between:
-·feedstock gas price,
-·DME plant location, size, and infrastructure development required,
-·shipping cargo size,
-·distance / shipping costs from the DME plant to a terminal,
-·distance / shipping costs from the terminal to fleet depot,
-·necessary new infrastructure needed,
-·and any modifications necessary to existing infrastructure used.

The economic optimum of these interactions as well as final DME market price would factor into where to site the plant and the terminal. To reduce unit costs, large DME plant and LPG ship sizes were assumed (7,200 tonne/day of DME and 75,000m3).

The AFFORHD LCA report average round trip distances for transporting DME were 1,500km one way (1,600 nautical miles round trip) by ship to a terminal and 160km by truck from a terminal to a filling station, respectively; this is the minimum distance for supplying DME to Europe based on manufacture in Algeria and delivery to a Naples, Italy terminal. To be consistent with the LCA report, this study's base case sited the DME plant in Algeria and the receiving terminal in Naples, Italy.

DME's physical properties are such that it can be handled, stored, and transported like LPGs. This study uses LPG shipping, trucking, and depot costs - adjusted for physical properties - for DME.

The main conclusions are:
- DME can be delivered to a European fleet depot for a cost of between 0.20 and 0.22 euro / litre as energy equivalent of diesel based on a natural gas feedstock price of $ 0.75 / MM Btu.
- For Brent crude oil prices of between 20 and 30 $ / barrel, 10ppm sulphur diesel can be delivered to a European fleet depot for a cost of between 0.19 and 0.25 euro / litre.
- These delivered costs are before government taxes and duties.
-·DME and diesel delivered costs are directly competitive on a $ / tonne basis at $0.75 / MM BTU gas and 26 to 30$ / barrel Brent, depending on DME shipping distance.
-·Economies of scale (larger plant and ship sizes) reduce the unit costs of delivering DME to market.

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