What's Best!

by Lindo Systems

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Natural Gas Distribution

Stone & Webster Management Consultants, Inc. has developed a Gas Nominations Model, a new optimisation model for use in the natural gas industry. Now that distributors are required to transport their own gas through pipelines, rather than purchase it at their city gate as they have for decades, a host of new obligations are thrust upon them. The model helps gas distribution companies to perform the intricate pipeline balancing required on a daily basis in the developing deregulation environment.

The model first forecasts daily gas requirements for each of the demand centres. Next, it analyses all of the distributor's supplies. It then selects the best mix of pipeline receipt and delivery points which will ensure meeting demand centre requirements at minimum supply and transportation cost, with minimum risk of imbalance and penalties.

The heart of the optimisation model is LINDO Systems' What'sBest! software. The model is based in a Windows environment and it's the first time Stone & Webster has introduced Excel into its models. The Excel/What'sBest! combination was chosen for its outstanding user-friendliness in customised input screens, dialogue box selection controls, and advanced optimisation features.

Although the package is well suited to the newly deregulated market in the U.S., it was originally developed for the largest gas distribution company in Argentina. "The model is readily applicable to any country with deregulated industry structure, with the US and Argentina being ideal candidates. To appreciate the type of assistance the model lends to the Argentinean distributor, just consider the magnitude of the effort that was formerly performed manually," says Ed McGee, Stone & Webster's project leader.

Over two hundred receipt and delivery points on two pipelines are used each day. Any pipeline imbalances are subject to penalties which increase geometrically with the size of the imbalance. "This kind of numerical task is ready-made for computer assistance, and in particular, for formal optimisation procedures," says Mr. McGee.

Stone & Webster has been supplying optimisation models for gas distribution companies in the US, Canada, Brazil, Oman, and Europe for over ten years. These models have advanced with technology. They started with the first version of Lotus and LINDO Systems' VINO solver, and have now arrived at the Excel/What'sBest! combination.