The Value of Imported Iso-Octane to California Refiners

A U.S. investment banking firm retained MathPro Inc. to estimate the economic potential of producing iso-octane in a Persian Gulf facility for export to California.

The analysis involved (1) estimating the facility’s production capability for iso-octane, given its other product out-turns and contractual commitments for these co-products, (2) estimating the potential demand for and the marginal refining value of iso-octane in the California refining sector, and (3) analyzing the historical patterns of blendstock imports and gasoline prices in California.

MathPro Inc. presented its results to senior management of the client firm. These results influenced the firm’s decision regarding investment in the production facility.