LNGScheduler: a rich model for coordinating vessel routing, inventories and trade in the liquefied natural gas supply chain

Marte Fodstad, Kristin Tolstad Uggen, Frode Rømo, Arnt-Gunnar Lium, Geert Stremersch

Abstract

ABSTRACT

Natural gas is one of the fastest growing energy sources in the world and, due to liquefaction of natural gas, natural gas markets are becoming global and involve moving liquefied natural gas over large distances by vessel. We present an optimization model that provides decision support for the liquefied natural gas supply chain by coordinating vessel routing, inventory management (upstream, onboard and downstream), trading and contract obligations. The model maximizes profit by utilizing different trading contracts, seasonal variations in pricing, price differences between different markets and inventory routing. We look into how the model may change some of the business practices in the industry.