_{B}_{a}_{c}_{k} _{t}_{o} _{M}_{e}_{n}_{u}
IPA09E131
PROCEEDINGS, INDONESIAN PETROLEUM ASSOCIATION ThirtyThird 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 
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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.
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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.28 – 29; 219 Departemen Energi dan Sumber Daya Mineral., 2004, Kebijakan Energi Nasional 20032020, p.3;43
McAllister, E.W., 2002, Pipeline Rules of Thumb Handbook, 5 ^{t}^{h} edition, p.575576
Steiner,
Principles, 2 ^{n}^{d} edition, p.143162; 239241; 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 = nonlinear 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
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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 
iButane 
0.34065 
0.7275 
0.48281 
nButane 
0.33898 
0.94917 
0.56322 
iPentane 
0.18483 
0.65306 
0.35690 
nPentane 
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 
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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 120
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 
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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$) 
Compressor Operation Cost 
2.4 
(Million US$) 
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Compressor Design



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
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BS Matindok
Figure 1  Matindok Block Gas Pipeline Plan
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