Optimal Dynamic Allocation of Mobile Plants to Monetize Associated or Stranded Natural Gas, Part II: Dealing with Uncertainty

Title

Optimal Dynamic Allocation of Mobile Plants to Monetize Associated or Stranded Natural Gas, Part II: Dealing with Uncertainty

Publication Type
Journal Article
Year of Publication
2016
Journal
Energy
Volume
96
Pagination
461-467
Date Published
02/2016
Abstract

Using the Bakken shale play as a case study, the previous part of this two-part series demonstrated how small-scale mobile plants could be used to monetize associated or stranded gas effectively. Here, we address the issue of uncertainty in future supply, demand and price conditions. To this end, we modified our multi-period optimization framework to a stochastic programming framework to account for various scenarios with different parameter realizations in the future. The maximum ENPV (expected net present value) obtained was $2.01 billion, higher than the NPV obtained in the previous part. In addition, the value of the stochastic solution was 0.11% of the optimal ENPV, indicating that the flexible nature of mobile plants affords them a great advantage when dealing with uncertainty.