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A hub-location periodic vehicle routing problem in offshore oil and gas logistics

Author

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  • A. M. P. Santos

    (Universidade de Lisboa)

  • C. Guedes Soares

    (Universidade de Lisboa)

Abstract

This paper attempts to identify the optimal location of an intermediate offshore hub, where cargo could be transported from an onshore depot and subsequently distributed among neighboring offshore oil and gas production platforms. Such a hub would offer economies of scale, deriving from bigger offshore supply vessels, thereby decreasing overall logistics costs. Given the difficulty in obtaining an exact solution for the underlying hub-location periodic vehicle routing problem, an efficient genetic search-based procedure is used instead for the solution method. For the first time, both a mathematical formulation and a solution method are proposed, obtaining solutions for problem instances of the size faced in practice. An example application is presented for Santos Basin, in Brazil, where offshore installations are located at more than 100 nautical miles from shore. Additionally, the impact of uncertain demand and weather conditions on the hub-location decision is also investigated through the use of a two-phased optimization-simulation method. While a hub solution has been considered by the offshore oil and gas industry, to contain operating costs, results suggest that a hub solution is unlikely to provide any cost savings, vis à vis servicing the platforms directly from the shore depot.

Suggested Citation

  • A. M. P. Santos & C. Guedes Soares, 2024. "A hub-location periodic vehicle routing problem in offshore oil and gas logistics," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 26(4), pages 685-709, December.
    • Handle: RePEc:pal:marecl:v:26:y:2024:i:4:d:10.1057_s41278-022-00244-8
    DOI: 10.1057/s41278-022-00244-8
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    References listed on IDEAS

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