On the choice of mathematical methods for assessing the value of real options for capacity extension of oil and gas projects

Abstract

The article presents the results of the study of cost evaluation of a real option for capacity extension of a two-phase liquefied natural gas production project and the economic effect of reserving capacity in the project. The expediency of using the simulation method to solve the problem of assessing the economic efficiency of the project with the real option at different stages of the project cycle is shown. Recommendations are given on using methods for constructing a binomial and a numerical integration models as additional (testing) methods for assessing the economic efficiency of a project with an option at the pre-investment stage.