Planning model for natural gas commercialization with legal and operational constraints

Abstract

This paper presents a mathematical model for planning optimization of the gas supply chain of a company that is a producer, trader, and gas consumer for its operations, but does not transport it, according to the guidelines of the Colombian government. The model optimizes the profit of the modeled company based on (i) the availability and demand of the modeled company, (ii) public information from other gas-producing and consuming companies, and (iii) demand-serving priorities. The model is formulated as a single-period non-linear programming (NLP) model that optimizes the natural gas allocations and the total profit of the company considering production, transportation, prioritization, and economic constraints. Due to prioritization constraints, the model is formulated as a optimization problem that is solved with the lexicographical method. The proposed model stands out for its ability to be used as a decision support tool for natural gas supply planners in Colombia due to its considerations of the technical, legal, contractual, and regulatory aspects of natural gas production in the country.