B.O.O Business Model (on-site supply contracts)

Build, own operate (BOO) is the typical model of an industrial gas company, also known as on-site supply model, usually for Air Separation Plants.

Basic and detail engineering, design, procurement and construction as state-of-the-art dedicated to customer needs;
Engineering services during design, construction, erection and operation;
Erection, supervision of erection;
Start-up and commissioning;
Plant operation, optimisation and trouble-shooting;
Training and Development of OM personnel; Maintenance and repair including auxiliary material;
Insurance of plant and personnel.

The alternatives

BOT

(build own transfer)

BOOT

(build own operate transfer)

BOO

(build own operate)

Typical projects:

Cryogenic Air Separation Units (ASU)
PSA Plants (Oxygen, Nitrogen, H2)
Utility Centers (compressed air systems, gas compressor plants)

The BOT vs BOOT model

The build, operate transfer (BOT) model offers financing of large projects, typically for providing of utilities such as air gases, compressed air systems, power, cooling water, etc. to the client.
BOT projects are normally large-scale, projects that would otherwise be financed, built and operated solely by the client.
For a build, operate transfer (BOT) contract, a private company (e.g. Luftkryo) comes to an agreement with the client to finance, build and operate a project for a period of 20-30 years, hoping to earn a profit.
During or after that period, the project is returned (transfered) to the client that originally signed the agreement and granted a concession to the private company.

An alternative to the basic BOT model is known as the build, own, operate transfer (BOOT) model.
Under (BOOT) contracts, the company owns the project during the entire agreed project period.
After that period, the project is returned (transfered) to the client.

BOO supply advantages (Examples)

Operation and maintenance

Operational best practices
Global support group for operation
Continuous experience exchange between operation/ plant design
Direct access to plant manufacturer during operation

Backup Supply

Access to other liquid sources
Liquid production may add degree of flexibility
Integration of multiple customers increases operational flexibility

Spare parts

Experience on components reliability and spare parts inventory
Global spare part sourcing

Commercial Aspects

No capex expenditure of customer
Predictable long term cost structure (15 to 20 yr contract)
Realization of synergies

BOO Alternative 1: "Stand Alone"

Benefits

Luftkryo’s technology, project execution operational expertise
Operation at process and cost optimum

BOO Alternative 2: Multi customers

Benefits

Luftkryo technology, project execution operational expertise
Operation at process and
Economies of scale (cost, feedstock, utilities)
Lower capital employed

BOO Alternative 3: Merchant market synergies

Benefits

Luftkryo technology, project operational expertise
Operation at process and Optimum Cost
Economies of scale and process synergies (co-production)
Less Capital expenditure