International Journal of Oil, Gas and Coal Engineering

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Optimizing Strategies Employed in Natural Gas Utilization

Received: 19 September 2023    Accepted: 25 October 2023    Published: 23 January 2024
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Abstract

Natural gas which is a subcategory of petroleum is a naturally occurring, complex mixture of hydrocarbons with minor amounts of inorganic compounds. Nigeria has a proven gas reserve estimated to be 206.53 Tscf, which is worth over 803.4 trillion dollars as of April 2022. These volumes of gases could be utilized in different ways, and the strategies employed in their utilization can be optimized to yield maximum benefit. The purpose of this study is to critically analyze the strategies employed in natural gas utilization within the Niger Delta region of Nigeria, then use an optimization technique and software to determine the optimum decision strategy. The study was limited to the use of linear optimization software, LINGO. A linear transshipment model was developed based on the gas utilization options that are employed in the Niger Delta. The transshipment model consists of three nodes: source, process, and destination nodes, which represent centers of activity. An objective function enveloping all the optimization nodes considered is defined. A set of constraints was also defined to restrict the model based on some factors such as the gas composition limit, the maximum deliverability at the destination nodes, etc. The necessary data for the study include gas composition data, fixed cost data, variable cost data, and market price data. The solution to the model provided by the software shows that the optimum net income for a period of 20 years is $2.522 trillion. The volume of gas that is required to meet market demand for the gas utilization options denoted G is 41.13264 Tscf. The result also shows that all the utilization options considered in the study are profitable since they all contributed to the optimum value obtained. A sensitivity analysis was carried out to see the effect a 10 to 50% increase or decrease in the fixed cost, variable cost, and market price data will have on the optimum value obtained.

DOI 10.11648/j.ogce.20241201.13
Published in International Journal of Oil, Gas and Coal Engineering (Volume 12, Issue 1, February 2024)
Page(s) 20-30
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Gas, Optimization, Model, Utilization, Node, Transshipment, Linear Programming, Sensitivity Analysis

References
[1] Guo Boyun and Ali Ghalambor (2018). “Introduction to Natural Gas”. A natural gas Handnook. Gulf Professional Publishing, 1-10.
[2] pwc (2019). “Assessing the impact of Gas Flaring on the Nigerian Economy, Information on https://www.pwc.com/ng/en/assets/pdf/gas-flaring-impact1.pdf
[3] Punch Report (2022). “Nigeria’s proven gas reserves”, Information on https://punchng.com/nigerias-proven-gas-reserves-worth-over-803-4tn-fg/?amp
[4] Business DayReport (2022). “Nigeria flares 216.5 bscf of gas 11 months after net zero commitement”, Information on https://businessday.ng/amp/energy/article/nigeria-flares-216-5bscf-of-gas-11-months-after-net-zero-commitement/
[5] Verghese, J (2002). “Options of Exploiting Stranded Gas: An Overview of Issues, Opportunities and Solutions”, SPE Paper 84250.
[6] Oligney, R and M. Economides (2002). “Natural Gas: An excruciating Experience”, SPE Paper 77371.
[7] Chinenye. O, Chukwu. G amd Khataniar (2007). S, ''Economics of GTL Technology for Gas Utilization'', Society for Petroleum Engineers SPE Paper 105654.
[8] Energyconnects (2022). “Nigeria’s gas sector in the balance between growing domestic and lucrative export market”, Information on https://www.energyconnects.com/opinion/features/2022/november/nigeria-s-gas-sector-in-the-balance-between-growing-domestic-and-lucrative-exportmarket/#:~:text=with%20over%20200%20Tcf20of,the%20continent%27s%20biggest%20LNG%20exporter.
[9] Kreyszig (2006). E Advanced Engineering Mathematics, 9th edition, John Wiley and Sons, Inc, New Jersey, pp 936-940.
[10] Rao, Singiresu (2009). Engineering Optimization: Theory and Practice, 4th edition, John Wiley and Sons, Inc, New Jersey, pp 119-125.
[11] The Energy Year Nigeria (2021). “Fixed cost for the Nigerian gas gathering System”, Information on https:0//books.google.com.ng/books?id=ow-HEAAAQBAJ&pg=PA95&dqlpg=PA95&dq=fixed+cost+for+the+Niger ian+gas+gathering+system+accord
[12] SPE NIGERIA (2005), “Economics of Conditioning Nigerian Natural gas for market”, information on https://spenigeria.spe.org
[13] Advanxis (2023). “Nigeria LNG train 7 project”, information on https://advanxis.com/blog-news/nigeria-lng-train-7-project-timeline-and-all-you-need-to-know
[14] Reuters (2022). “EU looks replace gas Russia with Nigerian supplies”, Information on https://www.reuters.com/world/africa/eu-looks-replace-gas-russia-with-nigerian-supplies-2022-07-23/
[15] Oil&Gas Journal (2023). “Nigeria LNG sells first spot cargo to US”, Information on https://www.ogl.com/pipelinestransportation/lng/article/17253048/nigeria-lng-sells-first-spot-cargo-to-us
[16] Wikipedia (2023). “West African gas Pipeline”, Information on https://en.wikipedia.org/wiki/West_African_Gas_Pipeline;
[17] NLNG (2022). “Facts and Figures” information on https://www.nigerianlng.com/media/Publications/2022_Fact_and_figures_on_NLNG
[18] Wood Mackenzie (2019). “Upstream oil and gas Nigeria oil supply Summary”, Information on https://www.woodmac.com/reports/upstream-oil-and-gas-nigeria-oil-supply-summary-16884744
[19] IEA (2021). “Executive summary”, Information on https://www.iea.org/reports/world-energy-outlook-2021/executive-summary
[20] NLNG (2022), “Nigerian LNG” information on https://www.nigerianlng.com/operations-strategies/Pages/Marketing.aspx
[21] NNPC, “Nigerian National Petroleum Corporation Annual Reports and financial Statements” (2019-2022); Information on https://www.nnpcgroup.com/
[22] IEA (2019). “Executive summary”, information on https://www.iea.org/reports/world-energy-outlook-2019/executive-summary
[23] Baker Hughes (2023). “Commodities”, Information on https://www.nasdaq.com/market-activity/commodities/ng:nmx
Cite This Article
  • APA Style

    Uwaezuoke, N., Tochi, A., Duru, U. (2024). Optimizing Strategies Employed in Natural Gas Utilization. International Journal of Oil, Gas and Coal Engineering, 12(1), 20-30. https://doi.org/10.11648/j.ogce.20241201.13

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    ACS Style

    Uwaezuoke, N.; Tochi, A.; Duru, U. Optimizing Strategies Employed in Natural Gas Utilization. Int. J. Oil Gas Coal Eng. 2024, 12(1), 20-30. doi: 10.11648/j.ogce.20241201.13

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    AMA Style

    Uwaezuoke N, Tochi A, Duru U. Optimizing Strategies Employed in Natural Gas Utilization. Int J Oil Gas Coal Eng. 2024;12(1):20-30. doi: 10.11648/j.ogce.20241201.13

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  • @article{10.11648/j.ogce.20241201.13,
      author = {Nnaemeka Uwaezuoke and Anene Tochi and Ugochukwu Duru},
      title = {Optimizing Strategies Employed in Natural Gas Utilization},
      journal = {International Journal of Oil, Gas and Coal Engineering},
      volume = {12},
      number = {1},
      pages = {20-30},
      doi = {10.11648/j.ogce.20241201.13},
      url = {https://doi.org/10.11648/j.ogce.20241201.13},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ogce.20241201.13},
      abstract = {Natural gas which is a subcategory of petroleum is a naturally occurring, complex mixture of hydrocarbons with minor amounts of inorganic compounds. Nigeria has a proven gas reserve estimated to be 206.53 Tscf, which is worth over 803.4 trillion dollars as of April 2022. These volumes of gases could be utilized in different ways, and the strategies employed in their utilization can be optimized to yield maximum benefit. The purpose of this study is to critically analyze the strategies employed in natural gas utilization within the Niger Delta region of Nigeria, then use an optimization technique and software to determine the optimum decision strategy. The study was limited to the use of linear optimization software, LINGO. A linear transshipment model was developed based on the gas utilization options that are employed in the Niger Delta. The transshipment model consists of three nodes: source, process, and destination nodes, which represent centers of activity. An objective function enveloping all the optimization nodes considered is defined. A set of constraints was also defined to restrict the model based on some factors such as the gas composition limit, the maximum deliverability at the destination nodes, etc. The necessary data for the study include gas composition data, fixed cost data, variable cost data, and market price data. The solution to the model provided by the software shows that the optimum net income for a period of 20 years is $2.522 trillion. The volume of gas that is required to meet market demand for the gas utilization options denoted G is 41.13264 Tscf. The result also shows that all the utilization options considered in the study are profitable since they all contributed to the optimum value obtained. A sensitivity analysis was carried out to see the effect a 10 to 50% increase or decrease in the fixed cost, variable cost, and market price data will have on the optimum value obtained.
    },
     year = {2024}
    }
    

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  • TY  - JOUR
    T1  - Optimizing Strategies Employed in Natural Gas Utilization
    AU  - Nnaemeka Uwaezuoke
    AU  - Anene Tochi
    AU  - Ugochukwu Duru
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    DO  - 10.11648/j.ogce.20241201.13
    T2  - International Journal of Oil, Gas and Coal Engineering
    JF  - International Journal of Oil, Gas and Coal Engineering
    JO  - International Journal of Oil, Gas and Coal Engineering
    SP  - 20
    EP  - 30
    PB  - Science Publishing Group
    SN  - 2376-7677
    UR  - https://doi.org/10.11648/j.ogce.20241201.13
    AB  - Natural gas which is a subcategory of petroleum is a naturally occurring, complex mixture of hydrocarbons with minor amounts of inorganic compounds. Nigeria has a proven gas reserve estimated to be 206.53 Tscf, which is worth over 803.4 trillion dollars as of April 2022. These volumes of gases could be utilized in different ways, and the strategies employed in their utilization can be optimized to yield maximum benefit. The purpose of this study is to critically analyze the strategies employed in natural gas utilization within the Niger Delta region of Nigeria, then use an optimization technique and software to determine the optimum decision strategy. The study was limited to the use of linear optimization software, LINGO. A linear transshipment model was developed based on the gas utilization options that are employed in the Niger Delta. The transshipment model consists of three nodes: source, process, and destination nodes, which represent centers of activity. An objective function enveloping all the optimization nodes considered is defined. A set of constraints was also defined to restrict the model based on some factors such as the gas composition limit, the maximum deliverability at the destination nodes, etc. The necessary data for the study include gas composition data, fixed cost data, variable cost data, and market price data. The solution to the model provided by the software shows that the optimum net income for a period of 20 years is $2.522 trillion. The volume of gas that is required to meet market demand for the gas utilization options denoted G is 41.13264 Tscf. The result also shows that all the utilization options considered in the study are profitable since they all contributed to the optimum value obtained. A sensitivity analysis was carried out to see the effect a 10 to 50% increase or decrease in the fixed cost, variable cost, and market price data will have on the optimum value obtained.
    
    VL  - 12
    IS  - 1
    ER  - 

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Author Information
  • Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria

  • Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria

  • Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria

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