The Economic Feasibility Study On The Changsha-Chenzhou Oil Pipeline Construction Project

With the ever-increasing social demand of oil consumption, the capacity of transportation has become a bottleneck in revenue increasing. At present, Oil products in Hunan are transported by railway or by truck to different cities. This leads to unnecessary transporting loss and higher operating cost. In contrast, pipelining is better used in organization, safety and reliability. In order to optimize the oil logistic system in Hunan and guarantee the market supply, SINOPEC Hunan Branch plans to further develop the local pipeline network system.The thesis analyses the economic benefits of the Changsha-Chenzhou pipeline project and explores the economic feasibility of the project. First of all, the thesis estimates the general investment cost as well as the cost of project operation in according to the project plan, based on the analysis of the project environment both internal and external. Then, resource allocation pattern is described, expected future earnings have been estimated based on the re-designed allocation pattern, the economic evaluation of this project is conducted. At last, for the problems that might arouse in the implementing process, safeguards from organizational management and technical support are emphasized.The thesis will give support to the economic decision of Changsha-Chenzhou pipeline project, and it provides guiding goals for project operation. While it would ensure the success of the project, the thesis would also give an example to the economic analysis of other future pipeline projects.