A multi-period optimization model for the design of new LNG supply chains

This paper presents a mathematical model developed to aid decision making in the design of a supply chain for liquefied natural gas (LNG). The supply problem considers the delivery of LNG from a number of supply ports to a set of consumers by maritime transportation to satellite terminals and by land-based truck transports from the terminals to consumers on or off the coast. The model addresses both tactical and strategic aspects in the design of a new supply chain, optimizing maritime routing of a heterogeneous fleet, truck connections and the strategic locations of the satellite terminals. The objective is to minimize the overall cost for the selected time horizon, considering both operation and investment costs. By contrast to an earlier effort by the authors, the present work also addresses storage sizes and inventory at the satellite terminals by applying a multi-period formulation. The performance of the model is illustrated by a case study, where the optimal LNG supply chain for a coastal region at a gulf was designed. The model was found to be a flexible tool for an initial design and feasibility analysis of small-scale LNG supply chains.