Optimal Design of a Small-Scale LNG Supply Chain Combining Sea and Land Transports

A mixed-integer linear programming (MILP) model for optimal design of smallscale supply chains of liquefied natural gas (LNG) is presented. LNG is delivered from supply terminals to receiving (satellite) terminals by ship transportation and by land-based truck transportation to customers on or off the coast. The objective is to minimize the overall cost, considering fuel price, investment, and operational costs. Demands not satisfied by LNG are taken to be satisfied by an alternative fuel. The results of the optimization provide information about the location of the satellite terminals, their capacity, the optimal maritime- and land-based fleets, the traveling routes, and the amount of LNG to be supplied to the demand sites. The model is illustrated by a case study in the region around the Gulf of Bothnia. The short computational time required to find the optimal solution makes the model ideal for use in studies of potential future scenarios.