LNG Distribution Optimization using Set Partitioning Problem Method

Abstract

The Indonesian government's commitment to increase the use of gas for domestic demand, by issuing the Decree of the Minister of Energy and Mineral Resources Number 13K/13/MEM/2020 concerning the Assignment of the Implementation of the Supply and Development of LNG Infrastructure and the Gasification 52 power plants in Indonesia. Therefore, a study on the supply chain design that can support the gasification process of the 52 power plants is crucial. Power plant data is imperative to identify receiving terminals which are then grouped into 8 clusters using the K-Means method. The design will use operating LNG refineries, which will then go to the hub for each cluster. Considering the feasibility factor of the receiving terminal and using the center of gravity method carries the determination of the hub. Considering the investment and operational costs form the feasible route as the most optimal by using the Set Partitioning Problem (SPP) method. The optimization considers several types of ships with six different sizes. The total investment cost required was $107,815,749.11, and the operational cost was $68,993,709.11. The results of the economic analysis indicate the distribution will reach a payback period within 10 years if gas sales use a margin of 1,75 USD.