Whilst there was a significant decrease in the production levels at the damaged GSP, we observed that other unaffected GSP units noticeably increased production levels. Our analysis calculated the loss of production volume relating to the damaged GSP and compared it to the overall loss of production volume across all GSPs. Our measurement deducted the make-up achieved by the other unaffected GSPs in arriving at the net loss of production volume.
Interestingly, the proportionate usage of gas at the other GSPs was higher than that avoided at the damaged GSP, which eroded the savings in gas cost relative to actual throughput.
Given that the permanent repairs were unable to occur until approximately one year after the incident date, the Insured decided to install temporary heaters to increase production capacity from 50% to 100% – the loss of gross profit would have otherwise been larger. We compared the increased cost relating to additional LP fuel usage against the loss of gross profit averted and the Increase in Cost of Working (ICW) incurred was economic.