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Optimization of Purchase, Storage and Transmission Contracts for Natural Gas Utilities

Author

Listed:
  • William Avery

    (Life Fitness Limited, Franklin Park, Illinois)

  • Gerald G. Brown

    (Naval Postgraduate School, Monterey, California)

  • John A. Rosenkranz

    (Boston Energy Associates, Boston, Massachusetts)

  • R. Kevin Wood

    (Naval Postgraduate School, Monterey, California)

Abstract

Natural gas utilities supply about a quarter of the energy needs of the United States. From wellhead to consumer, operations are governed by an astounding diversity of purchase, transport, and storage contract agreements which prepare a complex physical distribution system to meet future demands no more predictable than next year's weather. We present a decision support system based on a highly detailed optimization model used by utilities to plan operations which minimize cost while satisfying regulatory agencies. Applications at Southwest Gas Corporation are presented along with a case study at Questar Pipeline Corporation.“But thou, contracted to thine own bright eyes,Feed'st thy light's flame with self-substantial fuel” William Shakespeare, First Sonnet

Suggested Citation

  • William Avery & Gerald G. Brown & John A. Rosenkranz & R. Kevin Wood, 1992. "Optimization of Purchase, Storage and Transmission Contracts for Natural Gas Utilities," Operations Research, INFORMS, vol. 40(3), pages 446-462, June.
    • Handle: RePEc:inm:oropre:v:40:y:1992:i:3:p:446-462
    DOI: 10.1287/opre.40.3.446
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    Citations

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    Cited by:

    1. David L. Alderson & Gerald G. Brown & W. Matthew Carlyle, 2015. "Operational Models of Infrastructure Resilience," Risk Analysis, John Wiley & Sons, vol. 35(4), pages 562-586, April.
    2. Knudsen, Brage Rugstad & Whitson, Curtis H. & Foss, Bjarne, 2014. "Shale-gas scheduling for natural-gas supply in electric power production," Energy, Elsevier, vol. 78(C), pages 165-182.
    3. Nunes, Juliana Barbosa & Mahmoudi, Nadali & Saha, Tapan Kumar & Chattopadhyay, Debabrata, 2018. "A stochastic integrated planning of electricity and natural gas networks for Queensland, Australia considering high renewable penetration," Energy, Elsevier, vol. 153(C), pages 539-553.
    4. Steven A. Gabriel & Supat Kiet & Jifang Zhuang, 2005. "A Mixed Complementarity-Based Equilibrium Model of Natural Gas Markets," Operations Research, INFORMS, vol. 53(5), pages 799-818, October.
    5. Guldmann, Jean-Michel & Wang, Fahui, 1999. "Optimizing the natural gas supply mix of local distribution utilities," European Journal of Operational Research, Elsevier, vol. 112(3), pages 598-612, February.
    6. Bopp, A. E. & Kannan, V. R. & Palocsay, S. W. & Stevens, S. P., 1996. "An optimization model for planning natural gas purchases, transportation, storage and deliverability," Omega, Elsevier, vol. 24(5), pages 511-522, October.
    7. Kumar Muthuraman & Tarik Aouam & Ronald Rardin, 2008. "Regulation of Natural Gas Distribution Using Policy Benchmarks," Operations Research, INFORMS, vol. 56(5), pages 1131-1145, October.
    8. Xiangling Hu & Charles Munson & Stergios Fotopoulos, 2012. "Purchasing decisions under stochastic prices: Approximate solutions for order time, order quantity and supplier selection," Annals of Operations Research, Springer, vol. 201(1), pages 287-305, December.
    9. Xiao, Ludi & Zhou, Peng & Bai, Yang & Zhang, Kai, 2024. "Modeling the dynamic allocation problem of multi-service storage system with strategy learning," Energy, Elsevier, vol. 302(C).
    10. Psarras, John, 2016. "Multicriteria decision support to evaluate potential long-term natural gas supply alternatives: The case of GreeceAuthor-Name: Androulaki, Stella," European Journal of Operational Research, Elsevier, vol. 253(3), pages 791-810.
    11. von Lanzenauer, Christoph Haehling & James, William G. & Wright, Don D., 1995. "Service level risk in a pipeline system: A stochastic analysis," European Journal of Operational Research, Elsevier, vol. 81(3), pages 489-499, March.
    12. Grossman, Thomas Jr. & Rohleder, Thomas R. & A. Silver, Edward, 2000. "A negotiation aid for fixed-quantity contracts with stochastic demand and production," International Journal of Production Economics, Elsevier, vol. 66(1), pages 67-76, June.
    13. Aouam, Tarik & Rardin, Ronald & Abrache, Jawad, 2010. "Robust strategies for natural gas procurement," European Journal of Operational Research, Elsevier, vol. 205(1), pages 151-158, August.
    14. Ozelkan, Ertunga C. & D'Ambrosio, Alfred & Teng, S. Gary, 2008. "Optimizing liquefied natural gas terminal design for effective supply-chain operations," International Journal of Production Economics, Elsevier, vol. 111(2), pages 529-542, February.

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