Modern equivalent asset valuation of a 3400 km pipeline network
Risk

A regulated utilities transmission monopoly has been supported with annual valuations of its pipeline and facilities since 1996


Challenge

Arthur D. Little has supported a national regulated monopoly with Modern Equivalent Asset (MEA) based valuations of their pipeline network since 1996. A total of some 21 valuations have now been completed.  Arthur D Little has, as part of the MEA valuations, provided an independent assessment of useful life from field-based assessment of asset condition to help the client meet applicable International Financial Reporting Standards (IFRS)

Approach

Our approach is based on almost 25 years of international experience of conducting similar pragmatic, robust, independent valuations of oil and gas pipeline networks. Our replacement costs use international project benchmarks and local indices of market activity.  All cost data take into account design life, maintenance history and operating regime to derive a depreciated cost that is submitted for regulatory scrutiny.

Value

We have been reengaged continuously by the client since 1996 despite regular open re-tendering for the services.  Our work has formed a critical element of the client’s transition into regulation and subsequent discussions over tariff with the Regulator. 

graphique

ADL bring a wealth of information, concerning useful asset life and asset condition