Use of mathematical decomposition to optimize investments in gas production and distribution
This paper presents an analytical approach based upon the decomposition method of mathematical programming for determining the optimal investment sequence in each year of a planning horizon for a group of reservoirs that produce gas and gas liquids through a trunk-line network and a gas processing plant. The paper describes the development of the simulation and investment planning system (SIPS) to perform the required calculations. Net present value (NPV) is maximized with the requirement that the incremental present value ratio (PWPI) of any investment in any reservoir be greater than a specified minimum value. A unique feature is a gas reservoir simulation model that aids SIPS in evaluating field development investments. The optimal solution supplies specified dry gas offtake requirements through time until the remaining reserves are insufficient to meet requirements economically. The sales value of recovered liquids contributes significantly to NPV, while the required spare gas-producing capacity reduces NPV. Sips was used successfully for 4 years to generate annual investment plans and operating budgets, and to perform many special studies for a producing complex containing over 50 reservoirs. This experience is reviewed. In considering this large problem, SIPS converges to the optimal solution in 10 to 20 iterations. The primary factor that determines this number is how good the starting guess is. Although sips can generate a starting guess, beginning with a previous optimal solution ordinarily results in faster convergence. Computing time increases in proportion to the number of reservoirs because more than 90% of computing time is spent solving the, reservoir, subproblems.
- Research Organization:
- Univ. of Southern California
- OSTI ID:
- 5914327
- Journal Information:
- J. Pet. Technol.; (United States), Vol. 38:1
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
POLICY AND ECONOMY
03 NATURAL GAS
NATURAL GAS DISTRIBUTION SYSTEMS
ECONOMIC ANALYSIS
INVESTMENT
NATURAL GAS PROCESSING PLANTS
NATURAL GAS WELLS
BUDGETS
COMPUTERIZED SIMULATION
MATHEMATICAL MODELS
NATURAL GAS LIQUIDS
PIPELINES
PLANNING
PRESENT WORTH METHOD
RESERVES
ECONOMICS
ENERGY SYSTEMS
FLUIDS
INDUSTRIAL PLANTS
LIQUIDS
RESOURCES
SIMULATION
WELLS
294003* - Energy Planning & Policy- Natural Gas
030600 - Natural Gas- Economic
Industrial
& Business Aspects