Optimisation modelling for gas supply in Eastern Australia

Abstract

The security of gas supply is a crucially important question for economic of any country. Southeastern Australia has a sophisticated network of gas pipelines which connect the productions sites in the ocean shelf and in the inner part of the continent with major consumers which are capital cities (Adelaide, Melbourne, Hobart, Sydney and Brisbane) and major seaport of Gladstone in Queensland where gas is liquefied and then shipped to the Asian market. Two optimisation models were developed in order to test the satisfied demand security of the gas supply system to the possible global impacts which affect the demand for natural gas. The modelling research in the present work was focused on the simulation of delivery when demands reach their peak values. The first model minimises shortfalls in major supply nodes. As major constrains models used the production levels, supply capacities and mass balance in pipe junctions. The second model minimises the total cost of the gas delivery, which is a sum of production and transportation costs, whereas the constraints mostly stay the same. Both models were run for a series of the plausible economic scenarios which generated the future values of demands. The potential “bottle necks” in the system components were identified. It was found that the first constraint which became scarce is the pipe providing gas to the port of Gladstone. The capacity of this pipe should be increased in order to facilitate the increase of export from Gladstone, but will reduce supply to other consumption nodes. The first model focused on the shortfall minimisation can be considered as a decision support tool for gas delivery reallocation. It can help relevant authorities to obtain maximum security (or minimal risk) in the gas delivery network system, which is treated as elimination of problem related to the gas supply shortfalls for the time when demand level reach their peak values. Despite of simplifications admitted in this model it should be noted that it is a first step in the direction of risk management for the gas supply in South-eastern Australia. In present formulation the equal penalties are assigned to shortfalls in all demand nodes. This is the major problem associated to the shortfall minimisation model. At present there is no information available which would make possible the differentiated approach to the shortfalls in different demand nodes. This could be one of potential directions of future research work. The second model formulated in the present work minimises the cost of supplying gas to consumers. The model includes both the cost of production and the cost of transportation. Much of the research on gas transportation focuses solely on transportation costs and neglects the cost of production. However, the cost of production is highly variable across gas basins, and even across fields within the same basin. Natural gas is often found with heavier hydrocarbons such as propane or butane, and with liquid hydrocarbons like crude oil, with the gas often being the least valuable product. This can mean that natural gas is essentially a byproduct of production with little value. Therefore the variability of production costs is of interest to owners of transmission pipelines, who may see the volume transported through their pipes decline if production costs rise and large gas users find alternative sources of supply. It is also of interest to industries that may be appraising different regions for the construction of new plants, factories, or gas generators. The sensitivity analysis was implemented for both formulations of the model. The objective was to examine how the key indicators of system security and pipelines' flow were impacted by the changes (increase and decrease) in peak demands. For this sensitivity test the predicted annual scenarios for peak demand increase for four states (ACT was treated as part of NSW in present work) were used. For the analysis of the decrease of demands the equal proportional changes in demand were used for all demand nodes. It can be concluded that under current infrastructure the most vulnerable components of the system are industrial gas users in Galdstone and Mt. Isa (both in Queensland), whereas amongst the domestic consumers it is Brisbane. This conclusion can be utilised in further decision on the pipeline infrastructure upgrade.