A Research Project On Poseidon Resources

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Poseidon Resources is proposing to build a 50 MGD (50 million gallons per day) desalination facility in the Carlsbad, California. The project has been highly questioned, with local and environmental groups filing more than a dozen legal battles, including lawsuits and permit appeals, versus the project. By late 2009, Poseidon had received all of the permits needed to build and operate the plant and announced it would begin to secure financing. We will go further with the cost, financing, and partnerships associated with the project. Numerous and inconsistent cost estimates for the Carlsbad desalination project have been put out since the project was introduced in the late 1990s. In May 2002, initial fixed cost estimates for the…show more content…
About 54% of the total cost, is needed for the planning, permitting, design, construction, mitigation, and legal costs related with the desalination plant; 16% of the cost, is needed to build a 10-mile pipeline to transport the desalinated water from the coast to the regional water distribution system; 8% of the cost, is needed for indirect costs associated with water system improvements, including relining and rehabilitating a 5.5-mile section of the distribution pipeline and modifying treatment plants to accommodate desalinated water flows; and finally 22% of the total cost, is needed to finance the project. In addition to the capital costs, operating and maintaining these facilities would cost an additional estimate of $50 million each year, states the WPA. These costs, with the exception of the cost to finance the project, will be finalized in the water purchase agreement that must be approved by the Water Authority’s Board of Directors. Financing will be secured after the water purchase agreement is signed, and once this is secured, the cost to finance the project will be determined. The unit cost of water is determined by dividing the annual capital and operating and maintenance costs by the amount of water of produced. In 2002, Poseidon estimated that the unit cost of water would be $800 per acre–foot. In the initial contracts with local water agencies, Poseidon agreed to sell desalinated water at the same price that
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