An Integrated Framework for the Analysis of New Technology Selection for an Application to the LNG Industry

A fundamental issue in the management of technology innovation, both in manufacturing and service industries, is the comparative evaluation of emerging and incumbent technologies. This evaluation entails the juxtaposition of multiple aspects including process configuration and operational and financial performance. In this paper we present an integrated analytic framework for technology selection that models the relation between these three critical dimensions. We apply our framework in the context of the liquefied natural gas industry, in which new offshore vessel-based regasification technology has recently been developed as an alternative to conventional onshore terminal-based regasification. We analyze the impact of process configuration and operational and financial performance on technology selection, and identify the conditions under which a specific regasification technology and its configuration is appropriate for adoption. We also investigate how the insights we derive may depend on how one models stochastic variability in the relevant processing times.