## 4 Case Study: Economic Analysis 600 TEU Fuel Transition from MFO to LNG
### Cost Assessment for Retrofitting 600 TEU Container Vessel
The total number of trips from Jakarta to Singapore is 48 trips per year. Target BEP (Break Even Point) for this analysis is 10 years with equity from the company of approximately 40% and 60% loan. Table 6 shows that the CAPEX obtained is USD 3,617,624, while the OPEX realized for 3 years is USD 183,900. Meanwhile, 60% of CAPEX and OPEX amounted to USD 2,280,933. This study used a bank interest of \(-\)8%, and in accordance with further calculations, the loan principal is USD 228,093. This loan repayment needs to be taken into consideration during LCC calculation under different vessel financing model scenarios created by each vessel owner. Figure 11 illustrates a loan payment scheme for 10 years, as follows. \begin{table}
\begin{tabular}{c c c} \hline \hline  & \multicolumn{2}{c}{**Data**} \\ \hline Cost Component & Unit & Total Cost \\ CAPEX & USD & 3,617,624 \\ OPEX Change & USD/Year & 367,860 \\ Project Duration & Years & 10 \\ Annual Depreciation & USD/Year & 180,881 \\ Disposal/Salvage Value & USD & 1,808,812 \\ Tax Cost & \%/Year & 22\% \\ Inflation Rate & \%/Year & 4.5\% \\ \hline \hline \end{tabular}
\end{table} 
Table 6: Period 10-Year Scheme for Economic Analysis. \begin{table}
\begin{tabular}{c c c c} \hline \hline  & \multicolumn{1}{c}{**Minimum**} & \multicolumn{1}{c}{**Average**} & \multicolumn{1}{c}{**Maximum**} \\  & USD/Day & USD/Day & USD/Day \\ \hline Spares & 344 & 407 & 407 \\ Repair and maintenance & 154 & 309 & 442 \\ Lubricant & 2301 & 2488 & 2738 \\ Total OPEX/year & Million USD/day & Million USD/day & Million USD/day \\ after retrofit & 0.3146 & 0.3679 & 0.4143 \\ \hline \hline \end{tabular}
\end{table} 
Table 4: OPEX Calculation per year. \begin{table}
\begin{tabular}{c c} \hline \hline  & **Yearly Fuel Consumption LNG and MGO** \\ \hline MGO (Ton/Year) & LNG (MMBtu/Year) \\
6296.66 & 228,871.27 \\ \hline \hline \end{tabular}
\end{table} 
Table 5: Yearly fuel consumption LNG and MGO. Cash flow is an important indicator of economic feasibility concerning the investment in the retrofit 600 TEU containership. Figure 12 shows an illustration of cash flow for 10 years. Vessel owners will encounter challenges in cash flow until the second year, and from the third, there is bound to be positive cash flow. For 10 years, the NPV with four Discount Factor (DF) variables tends to provide initial payback, which is used to calculate the Capital Recovery Factor on the investment scenario. Assuming the initial investment has a negative value, it is considered a capital expenditure. However, this scenario's initial cost (-) is USD 3,617,624. Figure 13 shows the calculated NPV using various discount factors 25%, 30%, 35% and 40% and a positive NPV was realized during the 10 year scheme on the investment. The same interest rate for 10 years of investment was used for the calculation. Figure 11: Loan payment illustration. Figure 12: Cash flow for 10 years scheme. Furthermore, Figure 14 shows the Capital Recovery with three interest types such as 5%, 10%, and 15%. The CRF factor for an interest rate of 0.1 is 0.16, which was realized using the formula [2].