ADI performed technical and commercial due diligence for an integrated energy and chemicals park, evaluating asset configurations. The valuation involved rigorous DCF modeling of scenarios ranging from lube oil complex rejuvenation to asset shutdowns, factoring in terminal value sensitivities. The assessment specifically addressed market risks associated with Monoethylene Glycol (MEG) oversupply and regional demand recovery timelines.
The client
Global investment and holding company
The situation
Assessing the valuation and operational risks of a Southeast Asian refining and chemicals acquisition.
ADI’s contributions
DCF sensitivity modeling
ADI modeled the impact of raising refinery sustaining capital to identify hidden costs.
Yield performance analysis
Plant-specific yields for ethylene oxide (EO), MEG, and styrene were benchmarked against industry standards to validate margin projections.
Feedstock flexibility evaluation
Analysis of historical economic perfornamce confirmed the value of processing heavy liquid feeds such as gas oil and bio-naphtha over pure ethane.
Risk flag identification
The work surfaced “red flags” regarding deteriorating market demand for Group I base oils and polyester integration into MEG.
Key outcomes
- Facilitated an informed investment decision by quantifying sensitivity to sustaining capital underinvestment and fluctuating chemical margins.
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