A mathematical model on liquefied natural gas supply chain with uncertain demand

This study focuses on the optimization of transportation and the storage of a Liquefied Natural Gas (LNG) supply chain. Liquefaction of the natural gas enables the suppliers to carry the gas by different modes of transportation to the customers by changing its state from gaseous state to liquid while decreasing its volume by 600 times. We consider the liquefaction, transportation, and re-gasification costs for the LNG supply chain and, propose a new model for the LNG supply chain, which minimizes the costs that may incur in the LNG supply chain. In the proposed model, sea, road, and pipeline transportation modes are taken into consideration. Unlike other models, in addition to the on-shore/stationary storage facilities at the storage sites, off-shore/ rented vessels (or floating holding tanks), are used to mitigate the demand uncertainty regarding the unexpected increase and decrease in customer demand. The LNG Supply Chain Model is first tested by 57 alternative test problems with randomly generated hypothetic data for each case and solved. Then the developed model is extended with normally distributed demand data which is generated through a Cycle Service Level (CSL) of 0.90 and solved by using GAMS CPLEX 24.1.3.