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B a c k t o M e n u IPA09-E-131 PROCEEDINGS, INDONESIAN PETROLEUM ASSOCIATION

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IPA09-E-131

PROCEEDINGS, INDONESIAN PETROLEUM ASSOCIATION Thirty-Third Annual Convention & Exhibition, May 2009

DYNAMIC OPTIMIZATION MODEL AND ECONOMIC ANALYSIS FOR GAS PIPELINE: CASE STUDY OF MATINDOK BLOCK

Arsegianto * Evi Wahyuningsih * Kunarto * Widia Kusumastuti * Suprapto Sumardan **

ABSTRACT

The design of gas pipeline requires information of gas rate and pressure of gas to be delivered. Investment for pipeline and compressor are not inexpensive, therefore economic study through optimization process is required to minimize the cost.

In reality, gas demand increases over time so “static” optimization of pipe size to deliver the gas will not fit to the condition. New pipeline might be installed to serve the increased demand in the future if the existing pipe size is designed just to serve the current demand, while oversized pipe diameter would be wasteful to serve the current demand. An optimization using dynamic model, then, would suit for the problem raised.

This paper explains how dynamic model can assist gas pipeline design for increasing demand. This model wraps up the long term period of fulfilling gas demand with an optimum strategy of pipeline development.

A case study presented in this paper outlines the

dynamic model to optimize gas pipeline in Matindok Block, in Sulawesi. The economic aspect

is also discussed as objective parameter in the

optimization model. The study gives recommendation of constructed pipeline and compressor design based on technical aspect and economic analysis which satisfies all design constrains.

INTRODUCTION

Recently, natural gas demands have been increasing significantly as the government lunched the policy of diversifying energy sources. Lower price and environmentally more benign makes gas become more competitive and ready to substitute for oil fuel. This situation has driven the energy management planner as well as oil and gas contractors to conceive more progressive plan and strategy to supply natural gas with abundant demand.

Pipeline is still the best production facility to transmit gas for long distance consumers. Pipeline construction is depending on the quantity of gas, the condition of produced fluid, topography, and distances from produced field to gas buyers. The gas transmission network system includes source of gas, delivery point and compressor station used to reach the desire pressure to deliver the gas.

The development of gas transmission pipeline network consumes a huge investment cost. Two main components of cost are the cost related to pipeline system and the cost related to compressor system. The cost of pipeline depends on its diameter, which increases with respect to the diameter of pipe. The cost of compressor depends on its power. The use of small pipe will increase the pressure drop and consequently will need compressor with high power, which then increases the compressor cost. In order to minimize the total cost, we have to find the proper balance between pipeline cost and the compressor cost.

Keywords:

gas

transmission

pipeline,

dynamic

optimization

Somehow, the design of pipeline network should also satisfy some constraints. The constraints are pipeline flow equation and allowed maximum pressure related to the pipe strength.

*

Institute of Technology Bandung

**

PT. Pertamin EP

Back to Menu By using pipeline optimization result the operator can set the size of

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By using pipeline optimization result the operator can set the size of pipeline and compressor to anticipate increasing demand along the life cycle of the project. This method is also able to handle future problem when gas demand and new consumers join the pipeline network.

Gas demanded by consumers must be considered the reservoir capacity to produce gas.

Important components that must be considered before flowing the gas to consumers as follows:

1. Gas quantity (MMSCFD) and yearly gas quantity (BSCFY)

2. Contract period ( 15, 20, 0r 25 years)

3. Gross Heating Value (GHV) and Net Heating Value( NHV)

4. Gas composition interval (C1,C2,….,C5+)

5. Pressure and temperature at gas sale gate

6. Minimum and maximum allowable gas flow rate

7. Location and distance from gas source

METHOD

Minimization in gas transmission pipeline is one of problems faced by several gas industries in Indonesia. The features needed in gas transmission system including;

1. The optimal diameter sizes.

2. The minimum recommended diameter size and thickness of the pipeline.

3. The operating pressure of the compressor and the gas in pipeline.

4. The maximum number of compressor and horsepower required.

The parameters to be considered for network optimization are initial investment cost, operating and maintenance cost of pipeline and compressor, as well as other cost included in this system. The variables that associate with gas transmission system are:

1. Gas flow rate (Qg)

2. Inlet pressure (Pinlet)

3. Outlet Pressure (Poutlet)

4. Pipe diameter (ID, OD)

5. Pipeline segment

6. Suction pressure of compressor (Ps)

7. Discharge pressure of compressor (Pd)

The method used is a non linier programming called double heuristic method, which is a modification of

the least difference heuristic algorithm. Using this method, the solutions can be used to give alternatives pipe sizes which close to possible optimum answer. In this case, the pipe sizes (diameter and wall thickness) are available in data base and pipe design is determined based on API classification.

Generally, investment in pipe gas transmission comprises of investment cost for pipe and investment cost for compressor. Investment cost for pipe depends on the line and terrain as well as its location. Cost generally increases with size and is much higher in densely populated areas. The optimum diameter of pipe can be determined based on economic and technical consideration. Economic pipe diameter can minimize capital cost and operational cost. Larger the size of pipe diameter will increase the capital cost, but will minimize operational cost since the pressure drop is lower.

Cost formulas used in this paper as follows:

1. The annual capital cost for pipeline depends on

its diameter and wall thickness.

CI P = 15,894 C

p

L

(

OD- t

)

t

(1)

2. Total operating cost is linear function of

compressor horse power and pipeline maintenance cost.

OC

comp

=0.74569885 (1+C

h

p

OCpipe = Cfp×CIP

) ghp Ce Hy

(2)

(3)

3. Total Cost is calculated as follows.

TotalCost =CIP +CIC +OC

pipe

Case Study

+OC

comp

+ ROW + Labor + Misc

(4)

Figure 1 gives an illustration of Matindok Block gas pipeline development. Topography data shows that Donggi Field is the furthest field from consumer with 60.5 km of distance followed by Minahaki with 48. 3 km. The gas rate demand at first year is set to 45 MMSCF sent from Donggi Field and 46 MMSCF of gas delivered from Matindok Field. For the next five years it is predicted that gas production from Donggi Field will be increased to 60 MMSCFD to satisfy gas demand. Gas composition for each field is shown in Table 1. Pipeline design and cost properties are shown in Table 2 and 3 respectively.

Using Transgas method, gas pipeline is optimized to obtain the optimum diameter and compressor size.

Back to Menu Since gas rate design is not constant due to increasing gas demand

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Since gas rate design is not constant due to increasing gas demand in future, a dynamic programming is applied to solve the optimization problem.

Each pipe is optimized using pertinent data and pipe constraints. To find optimum diameter API 56 XL data base is used with range of 10 in – 40 in of diameter. Applying dynamic optimization method the optimum diameter result for each pipe segment is the available diameter and thickness that exist in pipeline industry. Using gas rate design for each field as shown in Table 4 and also considering the increase of gas production at year 5, the method gives pipeline optimal design as shown in Table 5. TransGas program shows that the constructed pipeline for each segment is 12.75 inch. It means the only variable that will be changed due to changes in gas rate is the compressor size for each gas source which gives different compressor sizes for year 1, 5 and 20 as shown in Table 6

The case also presents the economic calculation for pipe and compressor investment and operating cost as its objective function as shown in Table 7.

CONCLUSION

Pipeline optimization is a method to minimize total cost (all cost incurred) along the project life cycle. For the dynamic case represented by the increasing demand of gas delivery through the pipeline, information of future value this parameter has to be carefully predetermined since this parameter determines the optimum value of pipe diameter and compressor size and location.

REFERENCES

Arsegianto, 2000, Diktat Kuliah: Ekonomi Minyak dan Gas Bumi, p.2-8 – 2-9; 2-19 Departemen Energi dan Sumber Daya Mineral., 2004, Kebijakan Energi Nasional 2003-2020, p.3;43

McAllister, E.W., 2002, Pipeline Rules of Thumb Handbook, 5 th edition, p.575-576

Steiner,

Principles, 2 nd edition, p.143-162; 239-241; 267.

H.M.,

1996,

Engineering

Economic

American Petroleum Institute., 1980, API Specification for Line Pipe,p.15

Nomenclature

Ce

Cfp

= electricity price (US$/Kwh) = fraction of pipe operating cost to annual investment cost of pipeline = compressor price (US$/hp) = Pipe installation cost (US$/inch/m) = pipe unit price (US$/ton)

Chp

Cins

Cp

d = pipe inside diameter (in)

D = pipe outside diameter (in)

E = join factor

F = design factor

ghp = compressor horsepower (hp)

h = elevation (ft)

Hy = operating hours compressor in a year (hour)

k = adiabatic (isentropic) exponent

L = pipe length (mile)

M = non-linear constant between pipe’s price and pipe diameter

n

p

p

p

= life time of the equipment = compressor discharge pressure (psia) = compressor suction pressure (psia) = base pressure (psia)

d

s

b

Qg = gas flow rate (MMSCFD)

r = discount rate

S = yield strength pipe (psia)

t = wall thickness (inch)

T

Tb

T d

Z = gas deviation factor

= temperature of gas ( o R) = base temperature ( o R) = temperature derating factor

Back to Menu TABLE 1 - GAS COMPOSITION   Donggi Field gas composition (% mole)

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TABLE 1 - GAS COMPOSITION

 

Donggi Field gas composition (% mole)

Matindok Field gas composition (% mole)

Gas mixture

Component

composition

(%mole )

Hydrogen Sulfide

0.1391

0.384

0.22910

Carbondioxide

3.18

2.23043

2.83104

Nitrogen

1.14213

3.03

1.83591

Methane

91.22076

80.97919

87.45706

Ethane

1.5158

6.49778

3.34664

Propane

1.20215

3.06306

1.88602

i-Butane

0.34065

0.7275

0.48281

n-Butane

0.33898

0.94917

0.56322

i-Pentane

0.18483

0.65306

0.35690

n-Pentane

0.1087

0.39829

0.21512

Hexanes

0.08113

0.34852

0.17939

Heptane plus

0.54367

0.73681

0.61465

TABLE 2 - COMPRESSOR PROPERTIES

Maximum HP

20,000 hp

Ep

0.85

k

1.4

Hy

8,670 hours

Pb

14.7 psia

Tb

520 Rankine

Back to Menu TABLE 3 - COST PROPERTIES Allowed IRR 12% r 10% n 20

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TABLE 3 - COST PROPERTIES

Allowed IRR

12%

r

10%

n

20 years

Cfp

4%

Ce

0.1 US$/Kwh

Cp

5,000 US$/ton

Chp

1,000 US$/hp

ROW

10 US$/m

CIns

20 US$/inch/m

TABLE 4 - GAS PRODUCTION YEAR 1-20

Year

Qg Donggi ((MMSCFD)

Qg Matindok (MMSCFD)

0

45

46

5

45

60

20

60

60

TABLE 5 - PIPE OPTIMUM DIAMETER

Pipe Segment

Optimum Diameter (inch)

Donggi - Junction

12.75

Matindok Junction

12.75

Junction - LNG

12.75

Back to Menu TABLE 6 - COMPRESSOR OPTIMUM SIZE Year Donggi Matindok Pd hp Pd

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TABLE 6 - COMPRESSOR OPTIMUM SIZE

Year

Donggi

Matindok

Pd

hp

Pd

hp

1

976

2704

841

1900

5

1056

3846

879

2256

20

1056

3846

917

2256

TABLE7 - PIPELINE CONSTRUCTION TOTAL COST

Pipe Cost

92

(Million US$)

Pipe Installation Cost

15.6

(Million US$)

Pipe Investment Cost

76.4

(Million US$)

Pipe Operation Cost

3.05

(Million US$)

Compressor Investment Cost

3.1

(Million US$)

Compressor Operation Cost

2.4

(Million US$)

Back to Menu Compressor Design   A1= 0.31506237 A2= -1.04670990 A3= -0.57832729   A4= 0.53530771

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Compressor Design

 
 
A1= 0.31506237

A1= 0.31506237

A2= -1.04670990

A3= -0.57832729

 

A4= 0.53530771

A5= -0.61232032

A6= -0.10488813

A7= 0.68157001

A8= 0.68446549

Gas Flow Equation

  A4= 0.53530771 A5= -0.61232032 A6= -0.10488813 A7= 0.68157001 A8= 0.68446549 Gas Flow Equation
Back to Menu BS Matindok Ps= 400 psia 4.763 km LNG plant 15.07 km 45.4

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BS Matindok

Ps= 400 psia 4.763 km LNG plant 15.07 km 45.4 km Pout= 700 psia BS
Ps= 400 psia
4.763 km
LNG plant
15.07 km
45.4 km
Pout= 700 psia
BS Donggi
Ps= 500 psia

Figure 1 - Matindok Block Gas Pipeline Plan