A Planning Model for Evaluating Effect of Storage on Natural Gas Transmission Systems
Authors: Harnden Boyd M. , Witherspoon Paul A. 
Published: December 2007

This paper was prepared for the 44th Annual Fall Meeting of the of the Society of Petroleum Engineers of AIME, to be held in Denver, Colo., Sept. 28-Oct. 1, 1969. Permission to copy is restricted to an abstract of not more than 300 words. Illustrations may not be copied. The abstract should contain conspicuous acknowledgment of where and by whom the paper is presented. Publication elsewhere after publication in the JOURNAL OF PETROLEUM TECHNOLOGY or the SOCIETY OF PETROLEUM ENGINEERS JOURNAL is usually granted upon request to the Editor of the appropriate journal, provided agreement to give proper credit is made.

Discussion of this paper is invited. Three copies of any discussion should be sent to the Society of Petroleum Engineers office. Such discussion may be presented at the above meeting and, with the paper, may be considered for publication in one of the two SPE magazines.

A dynamic-deterministic planning model has been developed to evaluate the effect of storage of various kinds on a natural gas transmission system. The model consists of a computer program written in Fortran IV language and is program written in Fortran IV language and is useful to top management as a decision making tool. Economics of various storage alternatives can be investigated and the relationship between model parameter sensitivity and alternative storage decisions can be established. A hypothetical transmission pipeline is analyzed and the effects of gas storage in depleted gas fields, aquifers, chambers created by nuclear explosions, and LNG systems are considered. The model is useful in that one can discern the real effect of each storage alternative on the whole system, and the relationship between storage, life index, and the prepayment problem.

Introduction

The utility of natural gas storage facilities located close to the market area is well known. The natural gas industry uses such storage for a variety of reasons which include:

the ability to level out cyclic fluctuations in the demand for gas caused by temperature variations; achievement of high load factor operation; improved service to both jurisdictional and industrial customers; and the maintenance of market share with respect to competition from other energy sources.

When considering the investment of capital in storage facilities, the management of a natural gas transmission system has to investigate the complex interrelationships and resulting economic consequences of various aspects of the problem. These considerations include: (1) the problem. These considerations include:

the choice of the best storage combination from the alternatives available, the function of storage in the maintenance of life index, the effect of contracts negotiated with suppliers of natural gas on the company prepayment position, and the appropriate level to be position, and the appropriate level to be maintained in developing company-owned gas reserves.

Management Science can be defined as the application of the scientific method to bring about measurable improvement in human social systems.