The time needed for evaluating alternative plans to meet fluctuating market demand for gas has been slashed from weeks to hours by an innovative AIMMS-based decision-support tool. The tool has helped to identify reductions in development costs of over $137 million for Nederlandse Aardolie Maatschappij (NAM) and its customer, Gasunie, for gas production and transport projects in The Netherlands.

The Gas Capacity Planning Optimizer decision-support tool – developed by Shell Global Solutions in close cooperation with NAM – evaluates options for yearly gas-capacity planning and long-term investment. NAM is the first company to utilize the tool. “Gas-capacity planning has been converted from a laborious, annual planning routine into an exciting, strategic exercise, whereby development planning staff recognize their contributions to the bottom line,” says Eelco von Meyenfeldt, head of gas capacity and business planning in NAM–Groningen.

“Since the implementation of the optimizer, reductions in development costs amounting to $137 million have been identified. The next planned exercise has a similar savings target.” There are daily and seasonal fluctuations in the demand for gas as for many commodities. The most effective strategy for meeting gas demand is to provide cheap, onshore balancing capacity, close to the market, that allows small, peripheral fields to have uninterrupted production at maximum capacity.

Options available to generate such balancing capacity include compression on the large, onshore Groningen field, infill drilling, facility de-bottlenecking or seasonal gas storage projects such as underground stores, liquefied gas storage, or salt caverns. Finding the right mix of options is a complex task particularly because of the varying costs, production capacities and gas volume limitations of the different projects.

This is where the optimizer comes into play. It rapidly assesses different scenarios to find the optimum solution. The tool can typically evaluate a set of capacity measures for any new scenario within 8–15 hours, using a standard PC. Previously this took a month of engineering time – a very time-consuming task as there may be 5 to 10 possible scenarios and a multiplicity of different capacity measures, resulting in thousands of decision variables.

“The new optimization routine has allowed us to shift the focus from the time-consuming optimization process itself towards tailoring capacity measures to meet expected market demand,” says von Meyenfeldt.

“We can now study the impact of various ‘what-if’ scenarios, and build-in development flexibility accordingly. This will allow us to cope with demand uncertainties following liberalization of the European energy market.”

Contact: Nort Thijssen
Source: Shell Global Solutions International