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An MILP model for optimization of a small-scale LNG supply chain along a coastline

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  • Jokinen, Raine
  • Pettersson, Frank
  • Saxén, Henrik

Abstract

The world energy demand is continuously increasing and natural gas is one of the strongest candidates to cover the growth. However, natural gas is unavailable in many energy intensive areas and the best way to introduce natural gas to new, scattered, areas is by transporting it as liquefied natural gas (LNG). LNG can be shipped from a large LNG import terminal to consumers through a network of smaller satellite terminals with a combination of sea- and land-based transports. Building up a small-scale supply chain network is expensive and capital intensive. This paper presents a mathematical model to aid in the supply chain design decisions by minimizing the total costs associated with fuel procurement. The use of the model is illustrated by a case study, where the optimal supply chain of LNG for covering certain parts of the energy requirements of a country is designed under different cost structures for LNG and for its land-based transportation.

Suggested Citation

  • Jokinen, Raine & Pettersson, Frank & Saxén, Henrik, 2015. "An MILP model for optimization of a small-scale LNG supply chain along a coastline," Applied Energy, Elsevier, vol. 138(C), pages 423-431.
    • Handle: RePEc:eee:appene:v:138:y:2015:i:c:p:423-431
    DOI: 10.1016/j.apenergy.2014.10.039
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    References listed on IDEAS

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    1. Al-Khayyal, Faiz & Hwang, Seung-June, 2007. "Inventory constrained maritime routing and scheduling for multi-commodity liquid bulk, Part I: Applications and model," European Journal of Operational Research, Elsevier, vol. 176(1), pages 106-130, January.
    2. Elin Halvorsen-Weare & Kjetil Fagerholt, 2013. "Routing and scheduling in a liquefied natural gas shipping problem with inventory and berth constraints," Annals of Operations Research, Springer, vol. 203(1), pages 167-186, March.
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    Cited by:

    1. Bittante, A. & Pettersson, F. & Saxén, H., 2018. "Optimization of a small-scale LNG supply chain," Energy, Elsevier, vol. 148(C), pages 79-89.
    2. Koza, David Franz & Ropke, Stefan & Boleda Molas, Anna, 2017. "The liquefied natural gas infrastructure and tanker fleet sizing problem," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 99(C), pages 96-114.
    3. Ewelina Orysiak & Mykhaylo Shuper, 2024. "Determination of Demand for LNG in Poland," Energies, MDPI, vol. 17(17), pages 1-23, September.
    4. Alice Bittante & Henrik Saxén, 2020. "Design of Small LNG Supply Chain by Multi-Period Optimization," Energies, MDPI, vol. 13(24), pages 1-19, December.
    5. Kuk, Edyta & Małkus, Bartłomiej & Kuk, Michał, 2020. "Small-scale LNG Market Optimization – Intelligent Distribution Network," Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference (2020), Virtual Conference, in: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Virtual Conference, 10-12 September 2020, pages 522-530, IRENET - Society for Advancing Innovation and Research in Economy, Zagreb.
    6. Lopez Alvarez, Jose A. & Buijs, Paul & Kilic, Onur A. & Vis, Iris F.A., 2020. "An inventory control policy for liquefied natural gas as a transportation fuel," Omega, Elsevier, vol. 90(C).
    7. Zamar, David S. & Gopaluni, Bhushan & Sokhansanj, Shahab, 2017. "Optimization of sawmill residues collection for bioenergy production," Applied Energy, Elsevier, vol. 202(C), pages 487-495.
    8. Yuan, Jun & Shi, Xunpeng & He, Junliang, 2024. "LNG market liberalization and LNG transportation: Evaluation based on fleet size and composition model," Applied Energy, Elsevier, vol. 358(C).
    9. Ning, Jinghong & Sun, Zhili & Dong, Qiang & Liu, Xinghua, 2019. "Performance study of supplying cooling load and output power combined cycle using the cold energy of the small scale LNG," Energy, Elsevier, vol. 172(C), pages 36-44.
    10. Ancona, M.A. & Bianchi, M. & Branchini, L. & De Pascale, A. & Melino, F. & Mormile, M. & Palella, M. & Scarponi, L.B., 2018. "Investigation on small-scale low pressure LNG production process," Applied Energy, Elsevier, vol. 227(C), pages 672-685.

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