LNG Case
The half-semester session closes as it started – with a case illustrating the use and value of flexibility in design.
The introductory garage case demonstrates the process in a simple case and sets the scene.
The LNG case applies flexibility in design to a complex real design. We begin with a discussion of the South Australian de-salt plant that emphasizes the kind of issues associated with commitment to economies of scale. The LNG case then illustrates the interplay between the deep-seated reflex to focus on economies of scale and the three major counter-pressures for incremental, flexible design:
- Uncertainties and risk – The forecast is ‘always’ wrong and anticipated “requirements” may not be needed
- Time value of money – It’s economically advantageous to postpone expenses
- Learning – We are able to produce cheaper as we produce more.
As such, this LNG discussion epitomizes the overall intent of the course.
