Development of a Commercial Cost-Benefit Optimisation Approach for Gas Supply Reliability Planning
Robert Baker BEng (Chem) (Hons), BBus (Dist)
Project submitted in partial fulfilment
of the requirements for the degree of MSc (Energy and Resources), UCL School
of Energy and Resources, Australia
Grote Medal Winner - UCL 2011
The objective of the research was to establish whether it was possible to develop an optimisation model to determine the reliability level at which gas can be supplied at minimum cost. The scope of this study was limited to Santos gas operations in the Cooper Basin; namely Moomba and Ballera gas fields, processing and storage facilities. Despite extensive availability of research in the gas sector on the subject of reliability, the majority of the research was focussed on the methods of optimising reliability as a deterministic criterion, i.e., improving engineering and system design to maximise reliability, as opposed to applying the concept of reliability as an input variable for least-cost optimisation. Very limited research had actually been conducted for the gas industry in context of the latter concept as described. It was necessary to look towards research in the electricity sector, where practices of optimising reliability; whilst considering (1) cost of supply and (2) cost of supply interruption during periods of peak demand loads, are regarded to be accepted norms as part of system expansion planning. The principle challenge of this research was to present an alternative approach for cost optimisation for the gas industry; one that involved challenging accepted capacity planning norms and the notion that aiming for 100 per cent supply reliability would result in the most cost efficient operational condition. Based on the results of the study, it was shown that accepted principles and practices as applied in the electricity sector do apply very well to the gas industry, despite some inherent differences. Expected cost efficiency gains can be achieved by lowering the level of supply reliability, taking into consideration the costs of supply and non-supply of gas to customers.