The congestion cost of pipeline networks under third-party access in China's natural gas market

Qi Wei, Peng Zhou and Xunpeng Shi

Energy, 2023, vol. 284, issue C

Abstract: The consolidation of natural gas pipelines and the implementation of Third-Party Access (TPA) are two critical conditions of gas market liberalization that are being implemented in China, but their full impacts are insufficiently understood. This study employs a natural gas market equilibrium model to explore the utilization rate and congestion cost of China's long-distance pipelines, considering the economic properties of the pipelines. Except for the producer and the ending consumer, we envision the trader as a new agent based on the implementation of the TPA and improve the marketing behaviors of independent pipeline and storage operator agents covered in previous studies by adding independent transportation service and seasonal arbitrage. The results show that while the total utilization rate of long-distance pipelines is 87%, many pipeline segments are congested, which suggests that China's long-distance pipeline network has the potential for optimization. By introducing the congestion fee, this study identifies the pipelines that need structural optimization and capacity expansion. The results of this paper suggest that optimizing existing pipeline networks, deepening market liberalization, and developing a functional storage sector should be prioritized in China's gas market development.

Keywords: Natural gas market; Long-distance pipeline; Market liberalization; Mixed complementarity problem model; Third-party access (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544223019151
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:284:y:2023:i:c:s0360544223019151

DOI: 10.1016/j.energy.2023.128521

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().