Strategic planning optimization for natural gas to liquid transportation fuel (GTL) systems

A strategic planning optimization model is proposed for a network of natural gas to liquids (GTL) systems, and it is solved using a rolling horizon strategy. The model formulation determines the strategic and tactical decisions of the GTL supply chain over a long time horizon. The decisions to build new GTL refineries may be made over the span of 30 years and their operations cover the span of 60 years. Multiple capacities of GTL refineries (i.e., 1, 5, 10, 50, and 200 thousand barrels per day) that produce gasoline, diesel, and kerosene commensurate to the United States demand ratio may exist in the network. The parameter inputs include the locations, availabilities, and prices of natural gas in the United States discretized by county, the delivery locations of fuel products, and the transportation costs of every input and output of the refinery, defined for each time period. Formulated as a large-scale mixed-integer linear optimization (MILP) model, the problem is solved using a rolling horizon strategy for tractability. Case studies on the state of Pennsylvania are presented for different planning schemes and their impact on the economic performance of the GTL network is discussed. (C) 2014 Elsevier Ltd. All rights reserved.