Optimal LNG (liquefied natural gas) regasification scheduling for import terminals with storage

Ian Trotter (), Marília Fernandes Maciel Gomes, Marcelo Braga, Bjørn Brochmann and Ole Nikolai Lie

Energy, 2016, vol. 105, issue C, 80-88

Abstract: We describe a stochastic dynamic programming model for maximising the revenue generated by regasification of LNG (liquefied natural gas) from storage tanks at importation terminals in relation to a natural gas spot market. We present three numerical resolution strategies: a posterior optimal strategy, a rolling intrinsic strategy and a full option strategy based on a least-squares Monte Carlo algorithm. We then compare model simulation results to the observed behaviour of three LNG importation terminals in the UK for the period April 2011 to April 2012, and find that there was low correlation between the observed regasification decisions of the operators and those suggested by the three simulated strategies. However, the actions suggested by the model simulations would have generated significantly higher revenues, suggesting that the facilities might have been operated sub-optimally. A further numerical experiment shows that increasing the storage and regasification capacities of a facility can significantly increase the achievable revenue, even without altering the amount of LNG received, by allowing operators more flexibility to defer regasification.

Keywords: LNG; Optimisation techniques; Empirical analysis (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544215011901
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:105:y:2016:i:c:p:80-88

DOI: 10.1016/j.energy.2015.09.004

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 ().