Project Feasibility Studies & Contracts – AWR Lloyd

Project Feasibility Studies & Contracts

AWR Lloyd can provide pre-feasibility studies and the market and financial components for bankable feasibility studies for greenfield and brownfield projects in the energy, resources and infrastructure setors.

Our studies include analysis of the dynamics and structure of potential market demand, pricing, competitors, competitive advantages, preliminary technical parameters, infrastructure, transport and logistics, sponsors, management, HR, socio-environmental issues, development costs, operating cost scenarios and net present value.

For project financial models we focus in initially on building up a set of assumptions and scenarios. We do this through a combination of our own experience, networks and databases, site due diligence, our client’s information and databases, engineers’ estimates and public sources. In most cases an independent technical consultant or engineering advisor will be appointed by the client and their cost and timeline estimates will form the core part of a ‘base case’ set of assumptions. Key assumptions (depending on the industry) normally include project construction timeline, capital expenditure, operating cost structure, feedstock and raw materials pricing, demand and utilization scenarios, off-take pricing, depreciation, tax, debt finance and the cost of equity capital.

We provide recommendations in relation to potential financing structures and overall techno-economic feasibility. AWR Lloyd relies very much on local resources and connections to gather intelligence and on grass-roots analysis to support recommendations.

In cases where projects require long term raw materials supply agreements (e.g. fuel supply for power projects) or long term off-take agreements (e.g. tank rental contracts for oil tank farms), AWR Lloyd can assist in the process of identifying and short-listing potential suppliers or off-takers – and can support the negotiation of such contracts.

AWR Lloyd also provides a contract and commercial agreement advisory service focused on the evaluation and negotiation of PPAs, Fuel Supply Agreements and oil tank rental agreements working in conjunction with a client’s appointed lawyers.

For example: AWR Lloyd worked with a Southeast Asian oil tank farm and terminal company with over 2 million barrels of storage capacity to secure its first long term tank rental contract with a large oil refining company after a period of financial restructuring. AWR Lloyd assisted in the drafting and negotiation of the agreement. We then advised the tank farm on the activation of its customs free zone license – and introduced a large Singapore-based oil trading company as a new customer. AWR Lloyd has since negotiated and secured four medium term agreements for the tank farm with the trading customer involving sub-contract profit sharing and trading profit sharing arrangements.